CMN Resolution No. 4798 - Establishes Special Credit Line with Constitutional Financing Fund Resources for Covid-19 Calamity

The Central Bank of Brazil, in accordance with Article 9 of Law No. 4.595 of December 31, 1964, makes public that the National Monetary Council, in an extraordinary session held on April 6, 2020, based on the provisions of Article 4, item VI, of the aforementioned Law, Article 15, item VI, § 1, of Law No. 7.827 of September 27, 1989, and Article 8-A of Law No. 10.177 of January 12, 2001, with wording given by Law No. 12.716 of September 21, 2012,

RESOLVES:

Article 1. A special credit line is established using resources from the Constitutional Financing Funds for the North (FNO), the Northeast (FNE), and the Center-West (FCO), intended to meet the needs of the productive, industrial, commercial, and service sectors of Municipalities with a state of public calamity recognized by an act of the Federal Executive Branch resulting from the public health emergency of international concern related to the new Coronavirus (Covid-19), observing the provisions applicable to operations of these Funds that do not conflict with the following special conditions:

I - objectives: to promote the recovery or preservation of the productive activities of the beneficiaries referred to in this Resolution, affected by the state of calamity referred to in the caput of this article, in the area of operation of the FNO, FNE, and FCO;

II - beneficiaries: natural persons and legal entities, including cooperatives that, according to the priorities established in regional development plans, develop non-rural productive activities, especially those linked to the sectors of commercial and service enterprises in the Center-West, Northeast, and North Regions;

III - purposes:

a) isolated working capital;

b) investments, including working capital associated with investment;

IV - financeable items:

a) working capital: all operating expenses, maintenance, and stock formation expenses, including salary and contribution expenses and other expenses at risk of not being honored due to the reduction or suspension of productive activity;

b) investments: those authorized by Law No. 7.827 of September 27, 1989, intended to address the context of calamity generated by the spread of Covid-19;

V - financing limits:

a) isolated working capital: up to R$100,000.00 (one hundred thousand reais) per beneficiary;

b) investments, including working capital associated with investment limited to one-third of the operation: up to R$200,000.00 (two hundred thousand reais) per beneficiary;

VI - financial charges: effective interest rate of 2.5% p.a. (two and five-tenths percent per year);

VII - repayment: established based on the physical-financial schedule of the project or the simplified proposal, as applicable, and on the beneficiary's payment capacity, respecting the following term:

a) working capital: 24 (twenty-four) months, with a maximum grace period until December 31, 2020;

b) investments: those established by the norms and guidelines fixed by the Deliberative Councils of the Constitutional Financing Funds, with a maximum grace period until December 31, 2020;

VIII - contracting period: while the state of public calamity recognized by an act of the Executive Power persists, limited to December 31, 2020;

IX - guarantees: at the free discretion of the financed party and the financier.

§ 1. The banks administering the resources of the Constitutional Financing Funds must prioritize digital service in the contracting of the operations referred to in this article, seeking, if necessary, the provisions contained in Article 9 of Law No. 7.827 of 1989, to allow greater agility and compliance with the provisions of this Resolution.

§ 2. For the purposes of granting credit referred to in item "b", item IV, of this article, the administering banks must certify whether the proposed investment is intended to address the context of calamity generated by the spread of Covid-19.

Article 2. Installments due and payable until December 31, 2020, are suspended for up to 12 (twelve) months, with possible extension to the final maturity of the operation, for non-rural operations, whether current or with a delay of up to 90 (ninety) days on the date of publication of this Resolution, attributable to the beneficiaries of the Constitutional Financing Funds who are impacted due to the state of public calamity recognized by an act of the Executive Power.

Article 3. In the collection of defaulted credit, backed by resources from the Constitutional Funds, the administering banks shall not adopt a credit recovery procedure less rigorous than those they usually employ in their own credit operations.

Article 4. Within 60 (sixty) days after the end of the validity of the credit lines referred to in this Resolution, the administering banks of the Constitutional Financing Funds must report the total volume of credit granted, segregated by purpose referred to in item III of the caput of Article 1 of this Resolution, as well as the volume of operations that ceased to be received, in accordance with Article 2 of this Resolution.

Article 5. This Resolution enters into force on the date of its publication.

Roberto de Oliveira Campos Neto President of the Central Bank of Brazil