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President Suspends Bank Takeover, Rebels Bomb Citibank

August 8, 1987

LIMA, Peru (AP) _ President Alan Garcia suspended a state takeover of the nation’s private banks but said efforts to approve legislation to nationalize the banks would continue.

A bomb believed planted by leftist guerrillas heavily damaged a Citibank branch office about three miles southwest of downtown Lima and seriously injured a woman, police said.

They did not say if the Friday night attack was believed linked to Garcia’s announcement, also made late Friday. The rebels frequently plan attacks to coincide with major speeches and other activities of the president.

Police identified the victim as a 33-year-old woman suspected of being a member of a pro-Cuba rebel group.

Garcia announced on July 28 his plan to nationalize Peru’s 10 private banks, six finance companies and 17 insurance companies on the grounds that they were not making adequate investments in the impoverished countryside, were speculating in dollars and the stock market, and contributing to capital flight.

He issued a temporary takeover order pending congressional approval of a bill that would nationalize the affected banks and companies.

At a rally Friday night of his center-left Aprista Party, Garcia said he was suspending the takeover order because a judge had issued a restraining order.

His action will not affect the ongoing debate in Congress over nationalizatio n. The bill could be approved as early as next week.

Garcia assured the approximately 30,000 people at the rally in central Lima that the nationalization plan would continue. But they booed his decision to suspend the temporary takeover order.

The president has said that Citibank and five other foreign banks with branch offices in Peru will not be affected by the nationalization.

Bankers have called the nationalization plan unconstitutional and an attack against private property and charge that Garcia and his powerful party are seeking total control over the economy.

Most labor groups and left-leaning politicians have expressed support for the nationalization plan, while nearly the entire business community and conservative political parties have opposed it.

Early polls indicated that the general population is slightly opposed to the measure.

A steel guard door protecting the front of the Citibank office was destroyed by Friday’s bomb, said an Associated Press photographer on the scene. The interior was a jumble of toppled furniture and broken lights, and large chunks of the ceiling caved in, he said.

Police said they found fliers of the Tupac Amaru Revolutionary Movement, which endorses a Cuban-style Marxism.

Also Friday night, rebels blew up four power pylons in the mountains above the city, causing a blackout in two outlying section of the metropolitian region, a police spokesman told The Associated Press.

A bomb squad defused three explosive found at a department store in the same block as Citibank, according to the official, who spoke on condition of anonymity.

Tupac Amaru was blamed for a mortar attack Wednesday on Garcia’s residence that caused damage but no injuries. On Thursday, Garcia’s key economic aide, Daniel Carbonetto, who is considered a planner of the bank expropriation, was attacked by gunmen but escaped injury.

Tupac Amaru has conducted guerrilla attacks in Lima for more than three years, usually at hours when people are unlikely to be seriously injured. Its targets frequently are banks and offices of multi-national corporations and foreign agencies.

The group is much smaller and considered less violent the the Shining Path, a Mao-inspired guerrilla band that has been fighting for seven years to topple the government.

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