Deal goes ahead with an initial payment of $630m

President Hugo Chavez continued his nationalisation drive by seizing control of Venezuela’s third largest bank, according to reports.

The move by the Venezuelan president makes the state the largest player in the nation’s banking system and gives the socialist government access to more than one-fifth of bank deposits.

The acquisition will ‘strengthen the public banking system’ said the Finance Minister Ali Rodriguez.

In May, the Venezuelan government agreed to pay Spain's Grupo Santander $1.05 billion for the bank, ending months of stalled negotiations, reported the Associated Press.

The deal went into effect with an initial payment of $630 million. The rest will be paid in two equal installments in October and December, said the news agency.

Venezuela has nationalised several key steel, electricity and infrastructure companies since 2007.