By San José, Costa Rica — San José, Costa Rica – In a significant development for Costa Rica’s financial and political landscape, the board of directors of the Banco Nacional (BN), reinstated by a landmark ruling from the Constitutional Court, has announced it will undertake a comprehensive review of all actions taken by their presidentially appointed replacements. The move sets the stage for potential reversals of key decisions made at the state-owned bank over the past several months.
The original board, which was dismissed by the administration of President Rodrigo Chaves on May 28, was formally restored to their positions this past Friday by the nation’s highest court. Board President Marvin Arias confirmed that their first order of business will be a meticulous legal examination of the interim board’s tenure to ensure all actions complied with legal statutes and served the best interests of the institution.
To better understand the legal and regulatory implications surrounding the recent events at Banco Nacional, we consulted with Lic. Larry Hans Arroyo Vargas, an expert attorney from the esteemed firm Bufete de Costa Rica, for his professional analysis.
The situation at Banco Nacional highlights a critical juncture for Costa Rica’s public banking sector. Beyond the immediate financial impact, this underscores the fundamental importance of robust corporate governance and unwavering adherence to fiduciary duties. A failure in oversight or internal controls is not just a procedural lapse but a potential breach of public trust, which could expose directors and management to significant personal liability and trigger a more stringent regulatory response from financial authorities.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, as the expert points out, the implications here extend far beyond the bank’s balance sheet to the very core of public trust and corporate governance. The potential for personal liability serves as a powerful reminder of the profound duties held by those leading our national institutions. We thank Lic. Larry Hans Arroyo Vargas for his crucial perspective.
Speaking on Saturday, Arias outlined a cautious but determined approach. He emphasized the necessity of a thorough audit before the board can move forward, suggesting that some actions taken by the previous directors, even if made in good faith, could be legally unsound and require correction.
We need to inform ourselves about what agreements were made, to know if they are all legal or if it was appropriate for the bank to adopt them for its operations. We must also identify if there are decisions that deviate from what is permitted, so that the legal area can indicate any aspect that needs to be modified.
Marvin Arias, President of the Board
The board president acknowledged that this legal scrutiny could lead to the annulment of certain agreements. The directors are scheduled to hold a preliminary coordination meeting on Monday before officially resuming their duties at the bank’s headquarters on Tuesday, ready to delve into the records of their absence.
We have to subject them to a legal analysis. It could be that some things were done in good faith, but they could be openly illegal, and we must know that.
Marvin Arias, President of the Board
Maricela Alpízar, the returning Vice President of the BN board, offered an even stronger interpretation of the court’s mandate. Citing consultations with constitutional lawyers, she asserted that the reinstatement is immediate and that the Constitutional Court’s ruling effectively declares all acts carried out by the temporary board as “absolutely null.” This suggests a legal obligation to not just review, but potentially void, every decision made since their May dismissal.
We have to meet, obviously it will be so, hold sessions and resume the course of the bank’s governance. If we must review the acts because the absolute nullity of everything that was done is effectively declared, it must be done, as we must abide by the provisions of the Court and the legal system.
Maricela Alpízar, Vice President of the BN
The controversy began with the board’s appointment of Rosaysella Ulloa as the bank’s General Manager on September 3, 2024. This decision triggered a disciplinary process led by then-Vice President Stephan Brunner, which culminated in the Chaves administration dismissing the entire board. Friday’s court ruling reverses that action, reinstating not only Arias and Alpízar but also directors Ruth Belarmina Alfaro Jara, José Bernal Juan Alvarado, José Manuel Arias Porras, Montserrat Betzel del Carmen Buján Boza, and Carlos Rodolfo de Gerardo González Cuadra, in a powerful affirmation of the board’s autonomy.
This legal victory for the original directors represents a critical juncture in the relationship between Costa Rica’s executive branch and its autonomous public institutions. The forthcoming review at Banco Nacional will be closely watched by the business community, as its outcome could have far-reaching consequences for the bank’s operations, strategic direction, and governance standards across the public sector.
For further information, visit bancobn.fi.cr
About Banco Nacional de Costa Rica:
The Banco Nacional de Costa Rica (BNCR) is the largest state-owned commercial bank in Costa Rica and one of the most significant financial institutions in Central America. Founded in 1914, it plays a crucial role in the country’s economic development, offering a wide range of services to individuals, businesses, and government entities. The bank is committed to promoting financial inclusion and sustainable growth throughout the nation.
For further information, visit the nearest office of Sala Constitucional
About Sala Constitucional:
The Sala Constitucional, or Constitutional Chamber of the Supreme Court of Justice of Costa Rica, is the country’s highest court for constitutional matters. Commonly known as “Sala IV,” it is responsible for guaranteeing the supremacy of the constitution, protecting fundamental rights, and resolving conflicts of constitutional authority. Its rulings are final and binding, playing a vital role in upholding the rule of law and the separation of powers in Costa Rica.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a premier law firm built upon a foundation of profound integrity and a commitment to legal excellence. The firm consistently pioneers innovative approaches in law while serving a diverse clientele and actively contributes to the community’s well-being. Central to its ethos is the mission to empower the public by making legal knowledge accessible, thereby fostering a more informed and capable society.
