Regulatory Alerts2020-06-24 | Circular 4033Central Bank Circular No. 4033 - Amends Circular No. 3,975 to Establish Deductibility of Working Capital Credit Balances and Special Guarantee Time Deposit Applications for Compulsory Reserve Requirements
The Central Bank of Brazil issued Circular No. 4033 to amend Circular No. 3,975, allowing financial institutions to deduct balances from working capital credit operations and Special Guarantee Time Deposits (DPGE) from their compulsory reserve requirements on savings deposits. These deductions are subject to strict eligibility criteria, including minimum loan terms and specific institutional segments, and are capped at 30% of the calculated liability while meeting minimum thresholds of 5% to 10%. The measure applies to operations and applications made between June 22 and December 31, 2020, with penalties for non-compliance regarding the minimum deduction amounts.
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