Banks perform financial intermediation activities and related operations (such as foreign exchange, transfers, securities brokerage, credit cards, trust management, etc.). According to the legal framework (Act N° 15.322), only banks and financial intermediation cooperatives can:
A. Receive deposits in checking accounts and authorize their debit by checks;
B. Receive demand deposits;
C. Receive fixed-term deposits from residents.
These entities require authorization to operate for reasons of legality, timeliness and appropriateness by the Executive Power with prior report from the Central Bank of Uruguay. Additionally they require authorization by the Superintendency of Financial Services to start operating in the financial system. See requirements for approval and permission to operate, Art. 14 et seq of the Central Bank of Uruguay Communications Compilation of Financial System Regulation and Control Rules (RNRCSF in Spanish).
Retail banks are entities authorized to operate with some restrictions on placement currencies, lower credit ceilings and some non-permitted operations. These restrictions are set out in Art. 266 of the RNRCSF.
In these cases, supervision is primarily aimed at protecting the stability and solvency of the entities, based on the systematic and regular implementation of different supervisory mechanisms, which seek to promote entities to manage their risks in a professional way (including the risk of being used for money laundering or terrorist financing), to prepare financial reports in a timely and consistent manner, to operate with caution and maintain adequate compliance with regulations (including capital and liquidity requirements). Through these procedures, it is possible to have early warnings of problems and thus company managers can take appropriate measures to solve them in a timely manner.
The role of protecting financial users is also performed by responding to inquiries and denouncements.
See List of Banks authorized to operate in the Uruguayan financial system.