Regulatory Alerts1996-05-01
Directive No. 5/DSB/96 – Commercial Banks
The Banking Supervision Directorate issues Directive No. 5/DSB/96 to mandate commercial banks to record provisions for miscellaneous risks in accounts 609 and 799, aligning with Instruction No. 6/96. The directive specifies that accounting entries for determined losses must debit the provision account and credit account 101, while any excess loss is recorded in account 779. Upon verification of foreign note authenticity and confirmed absence of bank loss, the established provision is reversed through sub-account 849.
DIRECTIVE NO. 5/DSB/96 SUBJECT: COMMERCIAL BANKS Provision for Miscellaneous Risks
Considering the issuance of Instruction No. 6/96, dated July 12, we hereby communicate the following:
- The institution shall record the provision established in accordance with said Instruction in account "609 - Provision for Miscellaneous Risks" as a counterpart to account: "799 – Provision for Miscellaneous Risks".
- The accounting record of the determined losses shall be made by debiting the provision account and crediting account "101 - Foreign Notes and Coins".
- If the losses exceed the value of the established provision, the difference shall be recorded in account "779 - Miscellaneous Costs and Losses", credited to account "101 - Foreign Notes and Coins".
- After verification of the authenticity of the notes, if no loss is proven for the Bank, the established provision shall be reversed by crediting account "84 - Reversals and Cancellations of Provisions", sub-account "849 - Provision for Miscellaneous Risks".
This Directive takes immediate effect. BANKING SUPERVISION DIRECTORATE