Banking in Nicaragua, prior to 1978, consisted of the Central Bank of Nicaragua and several domestic- and foreign-owned commercial banks. One of the first acts of the Sandinista government in 1979 was to nationalize the country’s banking system in an attempt to promote community banking and support the rural poor. Foreign banks were allowed to continue their operations but could no longer accept local deposits. Private banks in Nicaragua were by law abolished in the 1980s and cooperatives were considered too politicized and dependent on subsidies. In 1985 a new degree loosened state control of the banking system by allowing the establishment of privately owned local exchange houses.
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