Chavez warns Venezuela banks

President Chavez: "We are soldiers"

Venezuelan President Hugo Chavez has threatened to nationalise banks which resist controversial financial and legal reforms introduced last month.

The president also threatened to imprison bankers who failed to observe the new legislation which requires banks to lend at least 15% of their loan portfolio to small farmers.

For the constitution not to be fulfilled, they will have to pass over my dead body

President Chavez

Banks and businesses say the new laws will threaten investment, but the government says they are aimed at helping the poor and aiding development.

Last week, the country was brought to a standstill by a nationwide strike called by Fedecamaras, the country's leading association of businesses to protest against the legislation.

'Over my dead body'

Mr Chavez has accused his opponents of being "predatory oligarchs", and says they are trying to blackmail a democratically-elected government.

"If any banker, the president of a foreign or domestic bank, refuses to comply with the constitution or our laws, not only could we nationalise the bank but that banker could be imprisoned for breaking the law," President Chavez warned.

Banks could face nationalisation

"There is no going back from here," he told the National Assembly.

"For the constitution not to be fulfilled, they will have to pass over my dead body.

"This revolution is peaceful, and I wish it to remain so, but it is not unarmed. We are soldiers, and we come armed just in case anyone makes an error of judgement," said Mr Chavez, who rose to fame in a botched coup in 1992.

Land redistribution

Last month, the Venezuelan Government used fast track legislative powers to decree 49 laws covering areas ranging from fishing to financial services.

Under the new laws, banks are obliged to lend 15%, nearly double the previous amount, of their portfolios to small farmers.

Some bankers have said they would rather pay a fine for disregarding the law than provide more loans.

Other controversial reforms, include laws to redistribute "idle land" and increase state control over the oil industry, Venezuela's major source of revenue.

Business leaders have appealed to the Supreme Court to overturn the rules and threatened to call further protests if the reforms are not suspended.