Circular 1/1981 of January 9 by the Bank of Spain: Budgets for Charitable-Social Works of Savings Banks

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Circular 1/1981, of January 9, by the Bank of Spain. Budgets for Charitable-Social Works of Savings Banks (BOE of January 20)

In order to expedite the processing of the charitable-social work budgets of savings banks, facilitating their faster submission to the Ministry of Economy and Commerce, through this Bank of Spain, once approved by the corresponding General Assemblies, in accordance with what is provided in Article 5 of the Ministerial Order of June 19, 1979, the Executive Council of this Bank of Spain, in its meeting today, has agreed to issue the following regulations:

First.-

Before February 28 of each year, all savings banks must send information to this Bank of Spain, in accordance with the attached model, regarding the proposed distribution of surpluses and budgets for charitable-social works that their Board of Directors and Social Works Commission have submitted or intend to submit for approval to the corresponding General Assemblies.

Likewise, they must send copies of the documentation that has been presented or will be presented to the Assembly regarding new works, either independent or collaborative, that are intended to be undertaken, and specifically the report justifying the aspects referred to in Article 9 of the Ministerial Order of June 19, 1979.

Second.-

Once the aforementioned proposals for the distribution of the year's surplus and the charitable-social work budget have been approved by the General Assembly, certifications of the adopted agreements will be sent to this Bank of Spain, in accordance with what is provided in the Ministerial Order of June 19, 1979. It will not be necessary to resend the documentation referred to in the aforementioned Ministerial Order if such documentation complies with that sent by the Savings Bank in compliance with the provisions of the previous norm of this circular.

The recommendation formulated in the letter dated February 22, 1980, by the Deputy Governor of this Bank of Spain to the Spanish Confederation of Savings Banks, is reiterated: that the deadline for submission during the first half of the year for the aforementioned proposals, once approved by the corresponding General Assembly, should not be exhausted, and that, if possible, it should be carried out within the first four months of each year. It is warned that, in any case, non-compliance with the deadline set in the Order, which is considered maximum, will lead in the future to the adoption of appropriate disciplinary measures.

Third.-

In order for the aforementioned proposals and budgets to comply with the principles established in Decree 1838/1975, of July 3, and the Ministerial Order of June 19, 1979, savings banks must keep in mind:

1.- That the guarantee coefficient of each savings bank, which in accordance with what is provided in Article 7 of Decree 1838/1975, of July 3, must serve as the basis for the distribution of surpluses and the constitution of reserves, will be the one derived from the institution's balance sheet as of December 31, once the fiscal year is closed, and before having made any provision to own resources from the year's results. [ 1 ]

2.- That new charitable-social works or collaborative works that savings banks intend to undertake, taking into account the recommendations formulated in section 6 of Circular No. 39 of this Bank of Spain, of December 15, 1978, and sections 4 and 5 of the aforementioned letter from the Deputy Governor of this Bank of Spain dated February 22, 1980, must meet the characteristics established in Articles 22 and 23 of Royal Decree 2290/1977, of August 27, and Articles 2 and 3 of the Ministerial Order of June 19, 1979. Works cannot be considered collaborative if they are reduced to mere economic contributions to external works. [ 2 ]

3.- That aid to external charitable works, which Article 7 of the aforementioned Ministerial Order of June 19, 1979, admits on an exceptional and temporary basis, may in no case exceed those granted the previous year to the same works, nor exceed globally 10 percent of the budget for the savings bank's own social work for the corresponding fiscal year, in accordance with the criterion maintained by the Ministry of Economy and Commerce in its authorizations, based on what was established in the Order of the Ministry of Labor of October 26, 1948, which was in force when the possibility of carrying out such aid from their surpluses was suppressed by Article 22 of Royal Decree 2290/1977, of August 27.

[1]

Note that the referenced article was expressly repealed by Royal Decree 502/1983, of March 9, on the distribution of net surpluses of savings banks (BOE of the 15th), which was in turn repealed by Law 13/1985, of May 25, on investment coefficients, own resources, and information obligations of financial intermediaries (BOE of the 28th).

[2]

Section 6 of Circular 39/1978, of December 15, addressed to savings banks, on the income statement, was repealed by Circular 20/1981, of June 30, on the balance sheet and income statement (BOE of August 11).

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