Interesting article from Reuters. Makes it easier to understand why a gun and body armor isn't a bad idea if you have to get large sums of cash out of the bank in Argentina.
Doorstep bank raids plague cash-loving Argentina
Thu Jun 3, 2010 11:35am EDT
BUENOS AIRES (Reuters) - In a country where cash is king, a trip to the bank can be fraught with danger.
Tax evasion and low rates of banking use mean many Argentines prefer cash to checks or direct debits, making the country fertile ground for gangs of thieves who strike after customers leave the bank carrying wads of cash.
A surge in such crimes is fueling demands for a crackdown. Lawmakers say banks should be forced to shield counters from view and get insurance against the so-called "leaving the bank" raids.
Buenos Aires Mayor Mauricio Macri wants to ban passengers riding on the back of motorbikes to fight drive-by robberies in the capital's financial district.
Thieves are often armed and shootings are common, but many people still run the risk of withdrawing large quantities of cash. Small businesses and charities, many of which pay suppliers with wads of bank notes, are particularly vulnerable.
Lucia Gimenez, treasurer for a shelter for domestic violence victims, insists on paying suppliers inside the bank since robbers smashed her car window and grabbed 14,000 pesos ($3,500) withdrawn to pay the center's food bills in April.
"I was so angry, I couldn't even cry," said Gimenez, who was not hurt in the robbery in the northern city of Resistencia. "You put so much time and effort into these kinds of institutions and this seemed so unfair, I felt abandoned."
Similar crimes are common in other parts of Latin America, but an increase in the robberies is making headlines in the region's third-biggest economy.
"More than being aware of the problem, people are scared, they're very frightened but there aren't a lot of alternatives if you have to go to the bank," said Gerardo Milman, a lawmaker who is pressing for tighter bank security.
"It has a lot to do with the lack of banking penetration in Argentina," he added, saying bank use was far lower than in neighboring Brazil and other countries in the region.
Argentines remain wary of sharp devaluations and freezes on bank withdrawals less than a decade after the country's worst economic crisis, and many prefer to stash their savings in cash under the mattress or in safe-deposit boxes.
When buying a house, the deal is often sealed when stacks of dollars change hands in the bank or a notary's office, and many people pay everything from gas bills to new cars and employees' wages with stacks of notes.
Surgeons at the best private hospitals demand their fees in cash, greenbacks preferably, and many stores give you a sizable discount if you pay with cash -- saving them a tax bill.
"Compared with other countries, there's no doubt many transactions are done in cash in Argentina," said lawmaker Jorge Mario Alvarez, who has presented a bank security bill. "It's a habit ... maybe people just don't have much faith in electronic transfers."
The number of robberies targeting people as they left banks soared 40 percent in 2009 from the previous year, with about 400 taking place every month, Alvarez said.
Many end in violence and sometimes murder, either on the street close to the bank or in an ambush when victims reach their destination after being followed for miles by car or motorbike.
Banking executives say they have already invested in security cameras and guards to tackle robberies targeting their customers, and some say the problem will only be resolved if the government scraps a controversial levy on financial transactions that was imposed as an emergency measure in 2001.
"When you've got a financial transactions tax as high as we've got in Argentina, the incentive to do business in cash is very high," Mario Vicens, president of the Argentine Banks Association, said in a recent interview.
"If far fewer operations were carried out in cash, like in any country where bank transfers are more developed, this crime would be virtually nonexistent," he added.
In the meantime, more and more people are hiring armed guards to accompany them to the bank or finding other ways to beat the robberies, like the treasurer Lucia Gimenez.
"If (the suppliers) don't open an account, they have to wait for me inside the bank and I give them the money there," she said. "That way, they run the risk and I walk out carrying nothing."
($1 = 3.995 Argentine pesos)
(Additional reporting by Fiona Ortiz and Walter Brandimarte; Editing by Kieran Murray)