MercoPress. South Atlantic News Agency

Judge reverses Milei's decree turning BNA into a corporation

Milei exceeded his authority when deciding on the BNA's fate after the matter had already been debated in Congress, the magistrate found

Argentine Federal Judge Alejo Ramos Padilla issued an injunction against President Javier Milei's decree paving the way for the conversion of the state-owned Banco de la Nación Argentina (BNA or just “Banco Nación”) into a joint stock company because such a measure needed Congressional approval given that the bank's creation and structure fall under legislative authority.

The La Plata magistrate argued that the decree could be a step towards a potential privatization of the bank, which was excluded from the list approved by Congress in 2024. Therefore, the ruling ordered the Executive to “refrain from any action aimed at its implementation.”

Milei's decree sought to “modernize” the BNA and “improve its competitiveness in the financial markets and optimize the allocation of resources.”

The bank workers' labor union La Bancaria celebrated the ruling in the case it filed questioning the constitutionality of a resolution of the bank's board of directors. The judge also interpreted the decree as a possible “previous step” toward its sale.

Founded in 1891, the BNA progressively became the country's leading commercial bank, both in terms of assets, loans, and deposits, with a priority on small and medium-sized enterprises, rural businesses, regional economies, and households. It had been removed from a list of companies up for privatization sent to Congress in the mega Bases Law bill, from where it was removed to expedite approval.

After insisting that “the Executive's decision could contradict the will of Congress,” Ramos Padilla gave the Libertarian administration 5 days to appeal his ruling.

Milei's Government has moved on with other privatizations such as the Belgrano Cargas railway line and the Yacimientos Carboníferos Río Turbio (YCRT) coal mining business in the Patagonian province of Santa Cruz. “Nothing that should not be state-owned will remain in the hands of the state,” Presidential Spokesman Manuel Adorni said this past weekend.

The ruling also mentioned that “Article 1 of the Bank's Charter expressly establishes that the BNA is an autarkic entity with budgetary and administrative autonomy, whose regime is not subject to the general rules of the national public administration.”

“Such provision prevents the Executive from modifying its structure without a specific law of Congress, since the legislative delegation conferred by Law 27,742 is of a general nature, and does not enable a transformation of this magnitude without an express rule,” the magistrate's rationale went.

Created by Congressional law, only the Legislative branch has thus the power to revoke the bank's public entity status “and any decision on the modification of the autarchy status of an entity created by the National Congress must emanate exclusively from the Legislative Power,” Ramos Padilla also argued.

Hence, Milei's Decree 116/2025 would exceed his authority “since the interpretation of the scope of the delegation set forth in Section 3 of the 'Bases Law' must be integrated with the rest of the law, especially with Chapter 'II. Privatization', in which Banco de la Nación Argentina was excluded, as well as with the way it was developed and the consensus reached during the parliamentary debate,” the judge decided.

“It will be the Federal Court of Appeals of La Plata which, in the end, will have to decide whether or not to uphold the decision duly rendered in this case which, in addition to considering the issue as abstract, declared that the modification of the situation of the Bank of the Argentine Nation was not a matter of law, declared that the modification of the legal situation of the banking entity can only be carried out by means of a formal law enacted by the National Congress and promulgated by the National Executive Power and, eventually, analyze how it affects the 'new fact' incorporated by the plaintiff, taking into consideration the allegations made by the parties and what was resolved at the time by this Court,” Ramos Padilla also pointed out.

La Bancaria Secretary-General Sergio Palazzo praised the judge's decision. “We celebrate the ruling of Judge Alejo Ramos Padilla of the Federal Court of La Plata who has just suspended the decree Number 116/25 that transformed Banco Nación into a corporation,” he explained.

(See also: Milei turns Banco Nación into a corporation)