President Hugo Chavez's government assumed control of Venezuela's third-largest bank on Friday, making the state the largest player in the nation's banking system. The purchase of the Spanish-owned Banco de Venezuela gives Chavez's government control over more than one-fifth of bank deposits as he tightens his grip over the economy.
The acquisition will "strengthen the public banking system," which favors sectors including agriculture, energy, housing and tourism, Finance Minister Ali Rodriguez said in a statement. In May, the Venezuelan government agreed to pay Spain's Grupo Santander $1.05 billion for the bank, ending months of stalled negotiations.
The deal went into effect on Friday with an initial payment of $630 million. The rest will be paid in two equal installments in October and December.
Under Chavez, Venezuela has nationalized major players in the steel, electricity and telecommunications sectors, as well as four major oil projects, since 2007.