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The world's biggest banking scandal comes from Banco do Brasil and causes losses of MORE than 800 BILLION, says association

Written by Alisson Ficher
Published 25/01/2025 às 18:07
Tied sales at Banco do Brasil divert billions in rural credit. R$841 billion lawsuit led by ABDAGRO exposes historic scheme.
Tied sales at Banco do Brasil divert billions in rural credit. R$841 billion lawsuit led by ABDAGRO exposes historic scheme.

A landmark lawsuit against Banco do Brasil exposes decades of illegal tied-selling practices in rural credit. Led by ABDAGRO, the lawsuit is seeking R$841 billion in compensation, revealing how billions were embezzled from rural producers. This case, bigger than Lava Jato, could change the rules of the Brazilian financial system.

An unprecedented scandal threatens to shake the foundations of the Brazilian financial system.

A monumental lawsuit exposes illegal tied-selling practices carried out by Bank of Brazil, revealing a scheme that diverted billions earmarked for rural credit.

The numbers are impressive: more than R$841 billion are being claimed in a legal battle that could redefine agribusiness in the country.

But how did this practice, which was supposed to boost development in the countryside, turn into one of the biggest scandals in history?

Tied selling: the epicenter of the scandal

At the center of the controversy is the practice of tied selling, in which access to rural credit is conditional on the acquisition of financial products such as insurance, capitalization bonds and consortia.

According to Brazilian Association for the Defense of Agribusiness (ABDAGRO), who leads the collective action, this practice has been going on for decades, directly harming thousands of rural producers.

Since the 1960s, rural credit has been a fundamental public policy for Brazilian agribusiness, offering subsidized interest rates and promoting agricultural production.

However, the systematic diversions operated by Banco do Brasil – which controls 60% of the rural credit market – diverted billions of reais from their original purpose.

Astronomical financial impacts

The lawsuit, led by the João Domingos Advogados law firm, calls for the return of embezzled funds and the application of colossal compensation:

  • $ 360 billion as a double repetition of the undue payment, referring to money diverted from loans.
  • $ 150 billion for individual moral damages caused to producers.
  • $ 179,9 billion for social damage, reflecting the negative impact on society.
  • $ 50 billion for collective moral damages, which weakened confidence in the system.
  • $ 70 billion by reversing the penalty clause, penalizing the bank for abusive practices.

These values ​​total impressive $ 841 billion, making this action the largest ever recorded in Brazil and in the world.

Cases of abuse in rural credit

The reports from rural producers such as Naiton and Sebastião de Moura illustrate the damage caused by tied selling.

In 2021, Naiton took out a R$3 million loan and had R$500 diverted to a private pension plan imposed by Banco do Brasil.

This practice led him to debt and judicial recovery.

Sebastião, in turn, reports decades of coercion by bank managers, who conditioned the release of credit on the acquisition of unnecessary financial products.

He often discovered these products only when the amounts were debited from his account, compromising his ability to invest in agricultural production.

These cases, which are repeated throughout Brazil, show how tied selling has become an endemic practice, transforming rural credit into a financial trap for thousands of producers.

Organized structure for bank profit

Former managers at Banco do Brasil confirmed that tied selling was encouraged by the institution's senior management.

Fernando Marques, who worked at the bank for 16 years, revealed that sales targets for these products were established by the superintendence, benefiting the bank to the detriment of rural producers.

Comparison with other scandals

To get an idea of ​​the impact, the case surpasses the Lava Jato scandal, which involved losses of R$153 billion.

The amount of R$841 billion places this scheme at the top of the list of the biggest financial embezzlement in Brazilian history, highlighting a systemic crime that lasted decades.

Reactions and the role of regulatory bodies

The seriousness of the case has already mobilized several institutions, including the Federal Public Ministry (MPF), the Central Bank (BC) and the Administrative Council for Economic Defense (CADE).

The connivance of regulatory bodies is highlighted as one of the factors that allowed the practice to persist for so long, harming not only rural producers, but also the national economy.

The fight for the survival of agribusiness

The action led by ABDAGRO seeks not only to recover the misappropriated amounts, but also to reformulate the sector's regulations.

The objective is to ensure that rural credit returns to fulfilling its original function: supporting agricultural production and strengthening the countryside.

According to ABDAGRO, this is a battle for the dignity of producers and the survival of agribusiness.

The association highlights that tied selling not only increases operating costs, but also puts the continuity of activities in the field, damaging a sector that is vital to the Brazilian economy.

A system that needs urgent changes

With compelling evidence and reports from producers from all regions of the country, the action highlights the need for structural reforms in the financial system.

For experts, this case could mark the end of abusive practices and pave the way for fairer and more efficient rural credit.

Now, the question remains: will this monumental scandal finally result in justice for rural producers, or will the banking system once again get away with it?

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Sebastian Viana
Sebastian Viana
25/01/2025 20:22

I have been saying for a long time that Brazil is not a country!
And yes, it's a **** system where we become hostages.
Where every 4 years the mafia is reversed in power.

Augusto
Augusto
25/01/2025 21:37

Well, we know that you have to do your “advertising”… but with some exaggerations it can turn against you… and give you a bad reputation… let’s see…
*What you need to know about the scandal involving HSBC and other global banks*
But yes. If it is true, it is a serious problem… which has been practiced by many banks and companies for a long time… and which must be changed… but it is that business… the inspection, the judiciary… will go after the offender and he will always try to escape… or evade taxes…

Joseilza Santana Satos
Joseilza Santana Satos
25/01/2025 21:38

WHAT THE BANK OF BRAZIL DID WITH THOUSANDS OF PUBLIC SERVANTS BY NOT DEPOSITING PASEP MONEY, TRANSFERRED BY THE AGENCIES; FROM 70 TO 1988 IS SHAMEFUL AND IRRITATING.

Alisson Ficher

Journalist graduated in 2017 and working in the field since 2015, with six years of experience in print magazines, stints on broadcast TV channels and over 12 online publications. Specialist in politics, jobs, economics, courses, among other topics. Professional registration: 0087134/SP. If you have any questions, want to report an error or suggest a topic on the topics covered on the site, please contact us by email: alisson.hficher@outlook.com. We do not accept resumes!

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