What the Koriun case reveals about Honduran banking

The recent disclosure of the lack of action by the National Banking and Insurance Commission (CNBS) regarding reports of issues at the Koriun financial institution has ignited significant public discourse in Honduras. The acknowledgment by CNBS President Marcio Sierra of the absence of institutional response to formal warnings has provoked anger among the impacted individuals and raised doubts about the efficiency of the country’s financial regulatory systems.

The Koriun case, which involves more than 35,000 people affected, has highlighted the need to strengthen regulatory controls and hold the competent authorities accountable. The situation has mobilized social sectors, civil society organizations, and representatives of the banking system, who are seeking to clarify the facts and prevent similar situations from recurring in the future.

Lack of institutional response and requests from impacted individuals

During a public appearance, the head of the CNBS acknowledged that the agency received at least two formal complaints about Koriun, but did not act in a timely manner to investigate or prevent the risks. This statement sparked a wave of reactions on social media and citizen forums, where victims denounced the state’s indifference and demanded clear answers. Those affected, many of whom lost their savings and assets, accuse the CNBS of gross negligence and dereliction of institutional duties, pointing out that warnings were deliberately ignored.

The controversy has sparked renewed discussions about the efficiency of early alert systems and financial oversight in Honduras, as well as concerns over potential political involvement or apprehensions that might have hindered prompt action. Consumer advocacy groups and experts have raised questions about how an organization recognized as a pyramid operation could function for such an extended period without adequate monitoring, even in the presence of formal grievances.

In reaction, opposition legislators declared their intent to submit a proposal to examine the involvement of the CNBS in the Koriun affair and to call its president for an official inquiry. Experts in constitutional law have cautioned that acknowledging a lack of action might amount to an omission offense in the performance of public duties, considering the statutory requirement to address indications of fraudulent financial conduct.

Several civil society groups have urged the Public Prosecutor’s Office to intervene without delay, demanded an independent review of the CNBS’s conduct, and proposed establishing a special fund to reimburse those who suffered losses, using funds confiscated from those accountable for the fraud. They have additionally sought assistance from global organizations to uphold the rights of the impacted individuals and to avert impunity.

Stance of the banking industry and appeal for precautionary measures

In reaction to increasing public apprehension, the Honduran Association of Banking Institutions (AHIBA) along with the banks operating lawfully in the nation have made it clear that they have no connections to the Koriun financial institution. As stated by the banking sector, Koriun has not been regulated by the CNBS and does not belong to the official banking system, thus banks did not handle funds or maintain any business dealings with that entity.

Koriun presented itself on social media as an investment platform offering high returns, without any legal backing or supervisory mechanisms. It is currently being described as a pyramid scheme that has illegally attracted millions of lempiras, affecting tens of thousands of Hondurans.

The banking sector in Honduras has reaffirmed its dedication to openness, legal compliance, and safeguarding citizens’ deposits. Additionally, it has urged the community to ensure financial entities are duly regulated by the CNBS prior to investing and to steer clear of enticing but unsupported promises of rapid wealth.

Ultimately, both AHIBA and its member banks have called upon the relevant authorities to conduct a comprehensive investigation into the case, hold the culprits accountable, and launch awareness campaigns to prevent future scams, highlighting the resilience and trustworthiness of the official Honduran banking system.