Circular A 3918: Modifications to Rules on Debtor Classification, Minimum Provisions for Credit Risk, Guarantees, Credit Graduation, Credit Management, Immobilized Assets, and Minimum Capital

BANCO CENTRAL DE LA REPÚBLICA ARGENTINA
COMUNICACIÓN “A“ 3918 04/04/2003
TO FINANCIAL ENTITIES:
Ref.: Circular
LISOL 1 - 395
OPRAC 1 - 555
Rules on “Debtor Classification”, “Minimum Provisions for Credit Risk”, “Guarantees”, “Credit Graduation”, “Credit Management”, “Ratio for Immobilized Assets and Other Concepts”, and “Minimum Capital of Financial Entities”. Modifications. ____________________________________________________________ We address you to inform you that this Institution has adopted the following resolution:

“1. Incorporate into point 6.2. of Section 6. of the rules on “Debtor Classification” the following paragraph:
“In this analysis, emphasis will be placed on measuring the degree of exposure registered in foreign currency based on its indebtedness and income generation in that currency.”

Establish that, for the purpose of classifying commercial portfolio debtors, the restructuring of debts due to the application of Reference Stabilization Coefficients (“CER”) and Salary Variation Coefficients (“CVS”) in the terms established in Communication “A” 3507 and complementary communications (updated text according to the Annex to Communication “A” 3806), will not be considered refinancing nor will it imply a reclassification of the debtor as long as they comply with the provisions established in the aforementioned communications.
Refinancing will also not be considered the waiting period until the effective application of the aforementioned coefficients provided for in the current regulations on the matter.
Replace points 1.1.1., 1.1.2., 1.1.3., 1.1.6., 1.1.18., 1.2.2., 1.2.3., second paragraph of point 1.1.14. of Section 1. and first paragraph of point 1.1.17.2. of the rules on “Guarantees”, with the following:
“1.1.1. Guarantees constituted in cash, in pesos or in the following foreign currencies: US dollars, Swiss francs, British pounds, yen, and euros, taking into account their quotation value permanently.” “1.1.2. Guarantees constituted in gold, taking into account their quotation value permanently.” “1.1.3. Sureties of fixed-term deposit certificates issued by the financial entity itself, constituted in the currencies referred to in point 1.1.1.” “1.1.6. Guarantees and letters of credit issued by foreign banks with international risk rating “A” or higher, granted by one of the rating agencies admitted by the rules on “Evaluation of Financial Entities”, which is not the head office or the controlling or controlled entity of the local entity, and to the extent that they are unrestricted and that the accreditation of funds is made immediately upon simple request by the beneficiary entity.” “1.1.18. Guarantees or sureties granted by reciprocal guarantee societies registered in the Registry enabled at the Central Bank of the Republic of Argentina or by provincial funds constituted with the same object as those societies, admitted by this Institution, regardless of the term of the operation, provided that they effective the non-cancelled credits within 30 calendar days of their maturity.” “1.2.2. Fixed pledge with first-degree registration or displacement to the entity on motor vehicles and agricultural, road, and industrial machinery (to the extent that they are registered in the pertinent national registry of motor vehicle ownership and have a market that allows obtaining a reference value).” “1.2.3. Guarantees or sureties granted by reciprocal guarantee societies registered in the Registry enabled at the Central Bank of the Republic of Argentina or by provincial funds constituted with the same object as those societies, admitted by this Institution, regardless of the term of the operation, to the extent that the requirement mentioned in point 1.1.18. is not met.”

Second paragraph of point 1.1.14.:
“Local issuing companies must maintain outstanding debt papers that have a local risk rating “A” or higher, granted by one of the rating agencies admitted by the rules on “Evaluation of Financial Entities”.”
First paragraph of point 1.1.17.2.:
“Maintain outstanding debentures or other debt instruments in the local market that have a local risk rating and all of them are, at minimum, “A” or higher, for a sum no less than $ 15,000,000.” These modifications will apply to operations entered into from the day following the date of dissemination of this communication, maintaining the validity of the replaced provisions for operations entered into prior to this.

Replace points 3.1.1., 3.1.3., 3.1.5., 3.1.6., 3.1.12., 3.1.17., 3.1.18., 3.1.19., 3.1.21.1., 3.1.21.2. and 3.2. of Section 3. of the rules on “Guarantees”, with the following:
“3.1.1. Cash (point 1.1.1.):
3.1.1.1. In pesos:
i) For coverage of an operation in pesos: 100%. ii) For coverage of an operation in foreign currency: 80% of the quotation value.
3.1.1.2. In foreign currency:
i) For coverage of an operation in pesos: 80% of the quotation value. ii) For coverage of an operation in the same foreign currency: 100%. iii) For coverage of an operation in a different foreign currency: 80% of the quotation value.” “3.1.3. Fixed-term deposit certificates (point 1.1.3.):
3.1.3.1. In pesos:
i) For coverage of an operation in pesos: 100%. ii) For coverage of an operation in foreign currency: 80% of the quotation value, calculated on the invested capital.
3.1.3.2. In foreign currency:
i) For coverage of an operation in pesos: 80% of the quotation value, calculated on the invested capital. ii) For coverage of an operation in the same foreign currency: 100%. iii) For coverage of an operation in a different foreign currency: 80% of the quotation value, calculated on the invested capital.” “3.1.5. National public securities (point 1.1.5.): 75% of their quotation value.” “3.1.6. Guarantees and letters of credit from foreign banks (point 1.1.6.): 100%” “3.1.12. Direct guarantees from foreign governments (point 1.1.12.): 100%.” “3.1.17. First-degree mortgage on real estate, regardless of its degree of priority as long as the entity is the creditor in all degrees (point 1.2.1.):
3.1.17.1. On real estate for own housing that is subject to the encumbrance: 75% of the appraised value of the property.
3.1.17.2. On real estate for uses other than own housing: 50% of the appraised value of the property.”
“3.1.18. Fixed pledge with first-degree registration or displacement to the entity (point 1.2.2.):
3.1.18.1. Motor vehicles and agricultural machinery: 75% of the market value.
3.1.18.2. Road and industrial machinery: 60% of the market value.”
“3.1.19. From reciprocal guarantee societies or provincial funds constituted with the same object as those societies (points 1.1.18. and 1.2.3.): 80%.” “3.1.21.1. Real estate for tenant housing: 75% of the appraised value of the property.” “3.1.21.2. Other real estate: 50% of the appraised value of the property.” “3.2. Partial coverage with preferred guarantees. When existing preferred guarantees do not cover the total assistance to the client, the part not reached with that coverage will have the treatment established for debts without preferred guarantees. To this end, the market value of those assets that have a quotation must be taken into account permanently, as contemplated in points 1.1.1., 1.1.2., 1.1.5. and 1.1.14. of Section 1.” These modifications will apply to operations entered into from the day following the date of dissemination of this communication, maintaining the validity of the replaced provisions for operations entered into prior to this.
Incorporate into Sections 1. and 3. of the rules on “Guarantees” the following points:
Section 1:
“1.1...... Sureties of reprogrammed deposit certificates “CEDROS” issued by the financial entity itself, provided that the average life term of the series is up to 6 months.”
Section 3:
“3.1.... .. Reprogrammed deposit certificates “CEDROS” (point 1.1...):
3.1.....1. For coverage of an operation in pesos: 100% of the nominal value computing the Reference Stabilization Coefficient up to the date the guarantee is constituted. 3.1.....2. For coverage of an operation in foreign currency: 80% of the nominal value computing the Reference Stabilization Coefficient up to the date the guarantee is constituted.”
Approve the provisions contained in Section 9. of the rules on “Credit Graduation”, Section 7. of the rules on “Ratio for Immobilized Assets and Other Concepts”, Section 11. of the rules on “Debtor Classification” and Section 4. of the rules on “Guarantees” - the latter will apply in place of the relevant points of Sections 1. and 3., for operations carried out from the day following the date of dissemination of this communication and until 12.31.03-, which are attached.
Replace point 2.2.5. of Section 2. of the rules on “Minimum Provisions for Credit Risk” with the following:
“2.2.5. Additional credit.
Provisions may be made based on the percentage established for clients in normal situation, for new financings that imply fund disbursements for amounts that do not exceed the result of applying the proportions established below to the debt balance -in each entity- on the day prior to its granting. Category % 5 10 4 15 3 20 2 40 The modification to higher levels of the classification assigned to the client will determine the change in the assistance limit as previously provided. Defaults in the payment of services corresponding to the additional assistance will determine the obligation to provision the assistance according to the objective guidelines of delay or legal situation established for the purpose of classifying debtors included in the consumer or housing portfolio, even if they are borrowers included in the commercial portfolio, for which purpose the additional financing will be treated independently of the rest of the client's debt. The additional financing granted is independent of the assistance that may be provided in operations that are fully covered with preferred guarantees “A”, for which there are no other limitations than those provided in the relevant regulation.”
Incorporate into Section 8. of the rules on “Minimum Capital of Financial Entities” the following point:
“8.2.4.16. Shares or participations in the capital of companies received in payment of credits, whose holding exceeds the maximum terms established for their liquidation in points 9.1.1. and 9.1.2. of Section 9. of the rules on “Credit Graduation”. This deduction will be made for the amount exceeding the maximum holding limit admitted.”
Replace point 1.9.1 in Section 1. of the rules on “Credit Management” with the following:
“1.9.1. Financial entities that make use of rediscounts or advances from the Central Bank of the Republic of Argentina for temporary illiquidity situations cannot grant credit assistance in which fixed-term deposit certificates -in pesos, in foreign currency or public securities-, reprogrammed deposit certificates “CEDROS” or debentures issued by them are received as guarantee for the fulfillment of loans, even if the minimum term of 30 days has elapsed since the date of issuance, last negotiation or transfer, while they maintain those facilities in force.”
Repeal points 1.1.7., 1.1.15. and 1.1.16. of Section 1. and 3.1.7., 3.1.15. and 3.1.16. of Section 3. of the rules on “Guarantees” and point 2.2.6. of Section 2. of the rules on “Minimum Provisions for Credit Risk”.

We send you attached the sheets that in place of those previously provided should be incorporated into the following ordered texts:

“Credit Graduation”.
“Ratio for Immobilized Assets and Other Concepts”.
“Debtor Classification”.
“Credit Management”.
“Guarantees”.
“Minimum Capital of Financial Entities”.
“Minimum Provisions for Credit Risk”. In this ordering, the provisions duly adopted and made known through Communications “A” 3314 and “A” 3339 are also included.
We salute you very attentively.
BANCO CENTRAL DE LA REPUBLICA ARGENTINA
Alfredo A. Besio José Rutman
Issuance Manager Principal Manager of Norms of Norms

ANEXO

B.C.R.A.
UPDATED ORDERED TEXT OF THE RULES
ON CREDIT GRADUATION
Version: 2nd. COMMUNICATION “A“ 3918
Validity:
04/04/2003
-IndexSection 8. Credit Management.
8.1. Risk assessment.
8.2. Record of analyses.
8.3. Responsibility of entities.
Section 9. Transitional provisions.
9.1. Shares received in payment of credits.

CREDIT GRADUATION
B.C.R.A.
Section 9. Transitional provisions.
Version: 1st. COMMUNICATION “A“ 3918
Validity:
04/04/2003
9.1. Shares received in payment of credits.
With validity until 12.31.03, financial entities may receive shares or participations in the capital of companies in payment of credits, up to the limit of 20% of social capital, without exceeding 20% of votes, regarding companies that do not provide complementary services to the financial activity, subject to the following conditions.
9.1.1. Holdings that grant control.
When the incorporation of these assets grants control of the company, within 90 days counted from the date of its incorporation, the financial entity must present to the Central Bank of the Republic of Argentina an action plan to liquidate the holding. In the event that the Central Bank formulates observations to the presented plan, the entity must adjust it according to them within 10 calendar days of notification. Failure to present the plan within the established terms, its rejection or non-compliance will give rise to the application of article 41 of Law 21.526. Such assets must be liquidated within 1 year to reach the admitted holding limit of 12.5% of social capital or less that does not grant control, according to what is established in the current regulations on “Credit Graduation”. The aforementioned term may be extended for a maximum of 1 year, provided that prior authorization from the Superintendence of Financial and Exchange Entities is granted, for which the corresponding request must be presented no less than 30 days in advance of the expiration of the term referred to in the preceding paragraph.
9.1.2. Holdings that do not grant control.
They must be liquidated within a maximum term of 1 year to reach the admitted holding limit of 12.5% of social capital or less that corresponds. The incorporation of these assets must be made at the value of the credit (net of provisions for credit risk attributable to it) or, if applicable, the proportional book value resulting from an audited balance with an age not exceeding 60 days, the lesser of both. Positive adjustments made subsequently on the incorporation value of these assets must have the prior opinion of the entity's external auditor. The shares or participations of companies received will be subject to the limit established in Section 7. of the rules on “Ratio for Immobilized Assets and Other Concepts”.

CREDIT GRADUATION
ORDERED TEXT SOURCE OF THE RULE
Section Point Paragraph Com. Annex Point Paragraph Observations
4. 4.1. “A” 467 unique 5.
5. 5.1.1.
except
“A” 467 unique 6.1. 1º
5.1.1.1.i) 2º “B” 1460 2º
5.1.1.2. “A” 490 unique 9.
5. 5.1.2. “A” 467 unique 6.1. 1º
5. 5.2.1.1. “A” 467 unique 6.1. last
“A” 2373 2.
5. 5.2.1.2. “A” 490 unique 8.
5. 5.2.2. “A” 467 unique 6.1. last
5. 5.2.3. Incorporates interpretative criterion.
5. 5.2.4. “B” 5902 7.
6. 6.1. “A” 3002 6.1.1. 2°
6. 6.2. 1° “A” 3161 1. and 2. According to Com. “A” 3171.
6. 6.2. 2° “A” 2019 6. According to Com. “A” 3161 and 3171.
6. 6.3. “A” 2019 5. last
6. 6.4. “A” 3183 1.
7. 7.1. “A” 2227 unique 5.1.
and 5.2.1. last
According to Com. “A” 2649.
7. 7.2.1. “A” 2227 unique 5.1.4. According to Com. “A” 2649.
“A” 2227 unique 5.2.2.
7. 7.2.2. “B” 5902 5. Includes interpretative clarification.
8. 8.1. “A” 467 unique 1. last According to Com. “A” 2373.
8. 8.2. “A” 467 3º
8. 8.3. “A” 490 unique 17.
9. 9.1. “A” 3918

B.C.R.A.
ORDERED TEXT OF THE RULES ON
RATIO FOR IMMobilized ASSETS AND OTHER
CONCEPTS
Version: 2nd. COMMUNICATION “A“ 3918
Validity:
04/04/2003
-IndexSection 1. Immobilized assets.
1.1. Concepts included.
1.2. Exclusions.
Section 2. Other concepts.
2.1. Concepts included.
Section 3. Calculation of concepts.
3.1. Immobilized assets.
3.2. Other concepts.
3.3. Exclusions.
Section 4. Ratio.
4.1. Maximum limit.
Section 5. Non-compliance.
5.1. Charge.
5.2. Other consequences.
5.3. Regularization and sanitation plans.
Section 6. Bases for observance of the rules.
6.1. Individual base.
6.2. Consolidated base.
Section 7. Transitional provisions.
7.1. Shares or participations received in payment of credits.

RATIO FOR IMMobilized ASSETS AND OTHER
CONCEPTS B.C.R.A.
Section 7. Transitional provisions.
Version: 1st. COMMUNICATION “A“ 3918
Validity:
04/04/2003
7.1. Shares or participations received in payment of credits.
The total of shares or participations in the capital of companies received in payment of credits up to the limit of 20% of social capital, without exceeding 20% of votes, regarding companies that do not provide complementary services, according to the conditions established in Section 9. of the rules on “Credit Graduation”, must not exceed 40% of the entity's calculable net worth for the month in question, during the maximum terms established for the liquidation of holdings, in points 9.1.1. and 9.1.2. of the aforementioned Section 9. This without prejudice to their calculation as established in point 1.1. of Section 1. for the purpose of determining the maximum limit referred to in point 4.1. of Section 4. If excesses over the maximum limit of 40% referred to in the preceding paragraph are verified, the financial entity will be subject to the provisions established in Section 2. of the rules on “Non-compliance with minimum capital and technical ratios. Applicable criteria”. In the event of excesses over the limit established in point 4.1. of Section 4. as a consequence of the incorporation of such assets received in payment of credits, they will not be considered as such as long as the immobilized assets and other concepts, calculated according to what is provided in Section 3. and in this section, do not exceed 100% of the entity's calculable net worth. Once the terms for the liquidation of holdings have elapsed, the excesses over the admitted holding percentage referred to in point 3.2. of Section 3. of the rules on “Credit Graduation”, must be deducted from the entity's calculable net worth.

B.C.R.A.
ORIGIN OF THE PROVISIONS INCLUDED IN THE
ORDERED TEXT OF THE RULES ON THE RATIO FOR IMMobilized ASSETS AND OTHER CONCEPTS ORDERED TEXT SOURCE OF THE RULE Observations
Section Point Paragraph Com. Cap./ Point Paragraph
Annex
1. 1.1.1. “A” 2736 unique 1.6.
1. 1.1.2. “A” 2736 unique 1.5. According to Com. “A” 3131
1. 1.1.3.
a
1.1.6.
“A” 2736 unique 1.1. a
1.4.
According to Com. “A” 2753
1. 1.2.1.1. “A” 2736 unique 1.5.3. According to Com. “A” 2753, “A”
3216 and “A” 3558
1. 1.2.1.2. “A” 2753 1. Includes interpretative clarification and modification by Com. “A”
2832 and “A” 3558
2. 2.1. “A” 2736 1. 1º
3. 3.1.1. “A” 2736 unique 1. last According to Com. “A” 2966
3. 3.1.2.1. “A” 2736 unique 3.
and 3.1.2.2. “A” 414
LISOL-1
VII 5.2.2.
3. 3.1.2.3. “A” 2736 unique 3.
3. 3.2. “A” 2736 1. 3º According to Com. “A” 2966. Includes
interpretative clarification
3. 3.3. “A” 2736 1. 2º
4. 4.1. “A” 2736 1. 1º
5. 5.1.1. “A” 2736 1. last
5. 5.1.2. a
5.1.4.
“A” 414
LISOL-1
V 3.2.2. a
3.2.4.
According to Com. “A” 2019
5. 5.1.5. “B” 5159
5. 5.2.1. “A” 2241
CREFI-2
I 3.2.3.
5. 5.2.2. “A” 2241
CREFI-2
II 1.2.
5. 5.2.3. “A” 2241
CREFI-2
III 1.1.
5. 5.2.4. “A” 2241
CREFI-2
IV 1.3.
5. 5.3. “A” 414
LISOL-1
V 4. Modified by Com. “A”
817
6. 6.1. “A” 2227 unique 5.2.1. last According to Com. “A” 2649
6. 6.2. “A” 2227 unique 5.1.8. According to Com. “A” 2736
“A” 2227 unique 5.2.2.
7. 7.1. “A” 3918

B.C.R.A.
ORDERED TEXT OF THE RULES ON
DEBTOR CLASSIFICATION
Validity:
-IndexSection 7. Classification of debtors of the consumer or housing portfolio.
7.1. Classification criterion.
7.2. Classification levels.
7.3. Mandatory recategorization.
Section 8. Information to clients.
8.1. Information to be supplied.
Section 9. Bases for observance of the rules.
9.1. Individual base.
9.2. Consolidated base.
Section 10. Other obliged to observance of the rules on debtor classification.
10.1. Non-financial entities issuing credit cards in the “closed system” modality.
10.2. Trustees of financial trusts included in the financial entities law.
10.3. Reciprocal guarantee societies.
Section 11. Transitional Provisions.

DEBTOR CLASSIFICATION
B.C.R.A.
Section 6. Classification of commercial portfolio debtors.
Validity:
6.1. Basic information.
The review of the commercial portfolio will be carried out based on updated financial information - accounting statements and complementary information, investment projects, etc.- that clients must provide upon request by the entities, applying parameters valid for each sector and considering other circumstances of the economic activity.
6.2. Classification criterion.
The basic evaluation criterion is the debtor's repayment capacity based on the estimated financial flow, and only secondly, based on the liquidation of the client's assets, since the granting of financings must respond to their true credit needs and be carried out under amortization conditions consistent with the real repayment possibilities allowed by their activity and fund generation. In that analysis, emphasis will be placed on measuring the degree of exposure registered in foreign currency based on their indebtedness and income generation in that currency. In the case of financial entities, the analysis must take into account the liquidity of the debtor intermediary and the quality of its portfolio.
6.3. Minimum classification frequency.
The review must be carried out at least with the frequency indicated below, leaving a record of this in the file of the analyzed client:
6.3.1. During each calendar quarter, with respect to individually considered clients whose financings, at some point, are equivalent to 5% or more of the computable equity or of the financial trust asset of the month prior to the end of said period, depending on whether they are entities or financial trusts, respectively. For these purposes, the economic group or set will be treated as a single client.
6.3.2. During each calendar semester, with respect to individually considered clients whose financings, summed at some point, amount to between 1% -or the equivalent to $ 1,000,000, whichever is lower- and less than 5% of the computable equity or of the financial trust asset of the month prior to the end of said period, depending on whether they are entities or financial trusts, respectively. For these purposes, the economic group or set will be treated as a single client.

DEBTOR CLASSIFICATION
B.C.R.A.
Section 11. Transitional provisions.
Version: 1st. COMMUNICATION “A” 3918
Validity:
04/04/2003
11.1. With effect from 3.31.03 to 12.31.03, clients whose level of indebtedness with the financial system is equal to or less than $ 5,000,000 will receive the treatment provided for the consumer or housing portfolio established in Section 7. of the norms on “Debtor Classification”. Notwithstanding this, the debtor may be classified in levels lower than that resulting from the application of the objective guidelines, if the entity -based on the remaining indicators established to evaluate the commercial portfolio- deems it reasonable. The use of this latter criterion must be justified, leaving a record of this in the client's file.
To this effect, the Central Bank of the Argentine Republic will inform the Unique Tax Identification Key (CUIT) of debtors who register a level of indebtedness with the financial system greater than $ 5,000,000.
11.2. For the purposes of classifying the debtors included in the preceding point, one day of default must be computed for every 3 days of delay effectively elapsed during the period 12.1.01/3.31.03, discarding fractions less than one.
This criterion will also be applicable to commercial nature debtors up to $ 200,000 who receive the treatment of consumer or housing loans (point 5.1.1.2. of Section 5). The days of default registered from 4.1.03 will be computed in the usual manner, so the treatment of the first paragraph of this point does not apply to them.
11.3. The derecognition of provisions for credit risk established on 2.28.03, as a consequence of the reclassification of debtors by applying the criteria referred to in points 11.1. and 11.2, considering the result globally (sum of greater and lesser provisions, as appropriate), will be carried out with a counterparty in a specific account of the Item “Provisions” (code 340000).
The balance of said account may be affected by the establishment of new provisions for credit risk, from April 2003, with respect to the credit portfolio -without any distinction-, without prejudice to the special treatment that may be established regarding the balance that may be registered on 3.31.04.
11.4. Until 12.31.03, the mandatory recategorization referred to in points 6.6. of Section 6. and 7.3 of Section 7. will not apply, with respect to debtors corresponding to the commercial portfolio and those of a commercial nature up to $ 200,000 who receive the treatment of consumer or housing loans (point 5.1.1.2. of Section 5.), respectively.

DEBTOR CLASSIFICATION
B.C.R.A.
Section 11. Transitional provisions.
Version: 1st. COMMUNICATION “A” 3918
Validity:
04/04/2003
11.5. Financial entities may agree to refinancings until 12.31.03, to debtors corresponding to the commercial portfolio and those of a commercial nature up to $ 200,000 who receive the treatment of consumer or housing loans, under the following conditions:
11.5.1. General conditions of the refinancing:
11.5.1.1. Included debtors.
Debtors classified in categories 3, 4 and 5.
Persons linked according to the definitions established in this matter cannot be included in this regime.
11.5.1.2. Included debts.
Those that have been registered for financings destined to activities developed by borrowers (natural and legal persons) corresponding to the agricultural, industrial, commercial and service sectors. Personal loans taken by business owners will be admitted to be included in their applications where said destination has been declared or, in default, when they demonstrate, to the satisfaction of the entity, the application of the funds to the aforementioned activities.
11.5.1.3. Excluded debts.
The following financings cannot be the object of refinancing under this regime:
i) personal loans, except as provided in point 11.5.1.2. ii) mortgages for the acquisition, improvement and/or renovation of housing. iii) pledges for the acquisition of vehicles not affected to the activities provided in point 11.5.1.2. iv) credit cards.
11.5.1.4. Term.
Up to 6 years.
11.5.1.5. Amortization systems.
French (constant installments) or German (decreasing installments). Early cancellation of the refinanced capital will be admitted.

DEBTOR CLASSIFICATION
B.C.R.A.
Section 11. Transitional provisions.
Version: 1st. COMMUNICATION “A” 3918
Validity:
04/04/2003
11.5.1.6. Installment frequency.
The installment frequency may be monthly, bimonthly or quarterly.
Semi-annual to annual frequency will be admitted in cases where the economic cycles corresponding to the activity developed by the client justify it.
11.5.1.7. Guarantees (optional).
Preferred guarantees established in the current norms on guarantees.
11.5.1.8. Coverage margins.
The ones established in the current norms on guarantees will be observed.
11.5.1.9. Update coefficient.
The application of the Reference Stabilization Coefficient (“CER”) may be agreed upon.
11.5.2. Reclassification of debtors. General provisions.
11.5.2.1. Debtors may be reclassified into higher level categories when the refinancing agreed under the conditions cited in point 11.5.1. is carried out for the total of the debt they maintain in the entity, without taking into account the classification criteria referred to in points 6.5. and 6.6. of Section 6. and 7.2. and 7.3. of Section 7. of the norms on debtor classification.
Such recategorization will be carried out taking into account the guidelines established in point 11.5.3.
Debtors included in category 6. "Unrecoverable by technical provision" referred to in point 6.5.6. and 7.2.6. of Sections 6. and 7., respectively, of the norms on debtor classification are excluded from recategorization, except as provided in 11.5.5.
11.5.2.2. The circumstance that, subsequent to the recategorization as established in point 11.5.3. -except for the debtor recategorized in normal situation-, delays greater than 62 days in the payment of an installment are verified, will automatically determine the reclassification of the debtor into the category in which they were included the month prior to the granting of the refinancing, in the same month in which the default occurs.

DEBTOR CLASSIFICATION
B.C.R.A.
Section 11. Transitional provisions.
Version: 1st. COMMUNICATION “A” 3918
Validity:
04/04/2003
Debtors recategorized in normal situation who incur subsequent delays will be subject to the norms applicable in this matter on a general basis.
11.5.3. Reclassification of debtors. Particular provisions.
The debtor may be reclassified taking into account the percentage of amortization of the refinanced debt that has been reached or by the passage of the periods established in the tables exposed below, whichever circumstance occurs first. The situations established in the following tables refer both to the initial situation -except category 2.- and to the intermediate ones, indistinctly.
11.5.3.1. Amortization term: up to 3 years.
i) Percentage of capital amortization.
Accumulated Percentage
Recategorization
% of debt cancellation from
Category
5 from
Category
4 from
Category
3 from 5 to 4 4 8 4 from 4 to 3 7 15 11 7 from 3 to 2 4 19 15 11

DEBTOR CLASSIFICATION
B.C.R.A.
Section 11. Transitional provisions.
Version: 1st. COMMUNICATION “A” 3918
Validity:
04/04/2003 ii) Installments paid.
Accumulated Installments
Recategorization
Quantity of installments from
Category
5 from
Category
4 from
Category
3 from 5 to 4 from 4 to 3 4 8 4 from 3 to 2 6 14 10 6 from 2 to 1 4 18 14 10 The incorporation into category 2, with respect to the commercial portfolio, will be carried out at the "under observation" level (point 6.5.2.1. of Section 6.). In the event that the debtor receives additional credit (point 2.2.5. of Section 2. of the norms on “Minimum provisions for credit risk”), they may only be reclassified according to the guidelines established in the measure in which said additional financing has been cancelled.
11.5.4. Debtors included in category 2.
Debtors included in category 2 may be recategorized into normal situation immediately, based on the analysis carried out by the entity. This taking into account that the new refinancing will determine an improvement in future fund flow and will allow the regularization of reduced delays, even if they obtain additional credit or the adjustment of contractual clauses to new conditions is foreseen. Subsequently, what is established in point 11.1. will apply.
11.5.5. Debtors of financial trusts.
The classification criteria established in this Section will also be applicable with respect to the debtors of financial trusts included in the Financial Entities Law, according to the provisions established by the Central Bank of the Argentine Republic (including trusts constituted according to article 35 bis of the Financial Entities Law). This will also cover debtors who are included in the category "Unrecoverable by technical provision", to the extent that their obligations are subject to refinancing under the conditions established in this Section.

DEBTOR CLASSIFICATION
B.C.R.A.
Section 11. Transitional provisions.
Version: 1st. COMMUNICATION “A” 3918
Validity:
04/04/2003
The trustee or administrator must have the prior authorization of the beneficiaries of the trust or administration to grant the refinancing, to the extent that it is exigible according to the provisions of the trust contract or administration regulations.
11.5.6. Provisions.
11.5.6.1. The refinancings granted to the debtors referred to in the last paragraph of point 11.5.2.1. will not be considered as such for the purposes provided in point 2.2.4. of Section 2. of the norms on minimum provisions for credit risk, therefore, instead of the provisions exigible for debtors included in that category, the provisions resulting from their theoretical reclassification considering that they are categorized in "unrecoverable" situation will be established on the balance of the refinanced debts.
11.5.6.2. Derecognition of provisions.
The derecognition of provisions for credit risk as a consequence of the reclassification of the debtor will be carried out with a counterparty in the specific account of the Item “Provisions” referred to in point 11.3.
11.5.6.3. When the reclassification of the debtor into the category in which they were included in the month prior to the granting of the refinancing is appropriate, in terms of provisioning, the norms established on a general basis will apply, admitting that the provisions for credit risk on the balance of the refinanced debt are established with affectation to the account mentioned in point 11.5.6.2. in the portion corresponding to the debtor within their balance. The remaining provision will be established with a counterparty in results according to the current norms in this matter.
11.6. The debtors corresponding to the commercial portfolio and those of a commercial nature up to $ 200,000 who receive the treatment of consumer or housing loans, whose debts have been refinanced from 6.30.02, may be reclassified into higher levels under the terms established in point 11.5., to the extent that the requirements established therein are verified.
11.7. Debtors who maintain payment agreements resulting from homologated judicial or extrajudicial concordats or private arrangements concerted jointly with creditor financial entities may be reclassified into higher levels taking into account the cancellation of the amount involved in the cited agreement based on the amortization percentages established in section ii) of points 11.5.3.1. and 11.5.3.2.

DEBTOR CLASSIFICATION
B.C.R.A.
Section 11. Transitional provisions.
Version: 1st. COMMUNICATION “A” 3918
Validity:
04/04/2003
The circumstance that, subsequent to the recategorization as indicated in the preceding paragraph, delays are verified will determine the application of what is established in point 11.5.2.2. In terms of provisioning, what is provided in points 11.5.6.2. and 11.5.6.3. must be observed.

DEBTOR CLASSIFICATION
ORDERED TEXT ORIGIN NORM Observations
Sec. Point Para. Com. Annex Point Para.
5. 5.1.1.1. “A” 2216 I I. 1st According to Com. “A” 2410
“A” 2216 I I. 2nd Modif. by Com. “A” 2410
“A” 2216 I II. 4th Modif. by Com. “A” 2410
5. 5.1.1.2. 1st “A” 2216 I 6. last According to Com. “A” 2358
5. 5.1.1.2. 2nd “A” 2216 I I. 1st According to Com. “A” 2410
5. 5.1.1.2. last “A” 2216 I 6. last According to Com. “A” 2358
5. 5.1.2.1. “A” 2216 I 6. 1st
5. 5.1.2.2. “A” 2216 I 6. 1st
5. 5.1.2.3. “A” 2216 I II. 3rd According to Com. “A” 2358
6. 6.1. “A” 2216 I I. last
6. 6.2. 1st “A” 2216 I I.a. 1st
6. 6.2. 2nd “A” 3918
6. 6.2. 3rd Incorporates criterion not previously disclosed on a general basis
6. 6.3. “A” 2216 I I.a. 2nd
6. 6.3.1. “A” 2216 I I.a. 2nd, i) Modified by Com. “A” 2223
(point 1.) and “A” 3339
6. 6.3.2. “A” 2216 I I.a. 2nd, ii) Modified by Com. “A” 2223
(point 1.) and “A” 3339
6. 6.3.3. “A” 2216 I I.a. 2nd, iii)
6. 6.4. 1st “A” 2216 I I.b. 1st Modif. by Com. “A” 3339
6. 6.4.1. “A” 2216 I I.b. 1st, i) Modif. by Com. “A” 3339
6. 6.4.2. “A” 2216 I I.b. 1st, ii) Modif. by Com. “A” 3339
6. 6.4.3. "A" 2216 I I.b. 1st, iii)
6. 6.4.4. "A" 2893 4.
6. 6.4.5. “A” 3339 unique
6. 6.4. last “A” 2216 I I.b. last Modified by Com. “A” 2223 (point
1.) and “A” 3339
6. 6.5. 1st “A” 2216 I I.d. 1st Modif. by Com. “A” 2440
6. 6.5. 2nd “A” 2216 I I.d. last Modif. by Com. “A” 3339
6. 6.5. last “A” 2216 I I.d. last Includes. interpretative clarification.
6. 6.5.1. “A” 2216 I I.d.1. According to Com. "A" 2932 (point 16.) and
“A” 3339
6. 6.5.1.1. “A” 2216 I I.d.1.a)
6. 6.5.1.2. “A” 2216 I I.d.1.b) Modif. by Com. “A” 3339
6. 6.5.1.3. “A” 2216 I I.d.1.c)
6. 6.5.1.4. “A” 2216 I I.d.1.d) According to Com. “A” 2932 (point 5.)
6. 6.5.1.5. “A” 2216 I I.d.1.e)
6. 6.5.1.6. “A” 2216 I I.d.1.f) Modif. by Com. “A” 3339
6. 6.5.1. last “A” 2216 I I.d.1. last Modif. by Com. “A” 3339
6. 6.5.2. “A” 2216 I I.d.2. Modif. by Com. “A” 3339
6. 6.5.2.1. “A” 2216 I I.d.2. 1st, 2nd and
3rd
According to Com. “A” 3339 i) “A” 2216 I I.d.2.a) According to Com. “A” 3339 ii) “A” 2216 I.d.2.b) Modif. by Com. “A” 3339 iii) “A” 2216 I I.d.2.c) According to Com. “A” 3339

DEBTOR CLASSIFICATION
ORDERED TEXT ORIGIN NORM Observations
Sec. Point Para. Com. Annex Point Para. ii) “A” 2216 I.d.2.b) Modif. by Com. “A” 3339 iii) “A” 2216 I I.d.2.c) According to Com. “A” 3339
6. 6.5.6.1. last “A” 2440 2. last
6. 6.5.6.2. “A” 2287 2. Modified by Com. “A” 2890
(point 3.) except b), 2nd paragraph
“A” 2287 2.3. Modified by Com. “A” 2497
(point 1.) b), last paragraph
“A” 2287 2.5. Modified by Com. “A” 2497
(point 1.)
6. 6.5.6.3. “A” 2573 1.
6. 6.6. “A” 2216 I I.c. Modified. by Com. "A" 2932
(point 6.) and “A” 3339
7. 7.1. 1st “A” 2216 I II. 1st
7. 7.1 2nd “A” 3142
7. 7.1. last “A” 3142
7. 7.2.1. 1st “A” 2216 I II.1.
7. 7.2.1. last Incorporates criterion not previously disclosed on a general basis
7. 7.2.2. “A” 2216 I II.2.
7. 7.2.3. “A” 2216 I II.3.
7. 7.2.4. “A” 2216 I II.4. Includes interpretative clarification
7. 7.2.5. “A” 2216 I II.5. Includes interpretative clarification
7. 7.2.6. “A” 2216 I II.6. According to Com. “A” 2440
7. 7.3. “A” 2216 I II. 1st and 2nd Modified by Com. "A" 2932
(point 6.) and “A” 3339
8. 8.1. “A” 2216 I 5. Modif. by Com. “A” 2562
9. 9.1. “A” 2227 unique 5.2.1. last According to Com. “A” 2649
9. 9.2. “A” 2227 unique 5.1.5. According to Com. “A” 2649
“A” 2227 unique 5.2.2.
10. 10.1. “A” 2389 2.
10. 10.2.1. “A” 2703 3. According to Com. “A” 3145 (point 1.)
10. 10.2.2. “A” 2703 4.
10. 10.3. “A” 3141 4.
11. “A” 3918

CREDIT MANAGEMENT
B.C.R.A. Section 1. Requirements for the granting of financings.
Version: 3rd. COMMUNICATION “A” 3918
Validity:
04/04/2003
1.8.3. In the case of financings, they must be attended to by local subsidiaries or affiliates only with funds coming from lines assigned to them by the aforementioned intermediaries from abroad.
If assistance is granted in a currency different from that of the foreign resources, the local entity cannot assume the exchange risk between pesos or US dollars and currencies different from them or between the latter when they are not equal.
1.8.4. In the case of guarantees granted locally, there must be counter-guarantees extended by the parent house or its branches in other countries or by an external controlling entity, whose effectiveness operates in an unrestricted manner upon simple request of the local subsidiary or affiliate and in an immediate manner to its eventual execution by the beneficiary.
In addition, the aforementioned operations are not covered by the norms on "Minimum capital of financial entities", "Debtor classification" and "Credit risk fragmentation".
1.9. Prohibitions.
1.9.1. Financial entities that make use of rediscounts or advances from the Central Bank of the Argentine Republic for temporary illiquidity situations cannot grant credit assistance in which time deposit certificates -in pesos, in foreign currency or public securities-, reprogrammed deposit certificates “CEDROS” or negotiable obligations issued by them are received as collateral for the fulfillment of loans, even if the minimum term of 30 days has elapsed from the date of issuance, last negotiation or transfer, while they maintain those facilities in force.
1.9.2. Financial entities issuing subordinated debt titles, admitted to determine computable equity, or convertible into shares of the entity cannot receive such titles as collateral for financings or as counter-guarantee for guarantees granted in favor of third parties or for eventual responsibilities assumed on behalf of third parties.
1.10. Growth of financings.
Entities that maintain financial assistance from the Central Bank of the Argentine Republic to address illiquidity situations cannot register an increase in their total assets, except for the growth that corresponds to items included in the item “Liquidity” and by the capitalization of interest and other accessories and that which is admitted with respect to financings, according to the definition contained in the informational regime “Debtors of the financial system and composition of economic sets” -excluding eventual responsibilities-, to clients of the non-financial private sector not linked to the entity.

CREDIT MANAGEMENT
ORDERED TEXT SOURCE NORM
Sec. Point Para. Com. Annex Cap. Sec. Point Para. OBSERVATIONS
1.5.1. 1° “A” 2373 3. 1°
2° “B” 5902 9.
1.5.2. “A” 2373
“B” 5902
3.
2.
1ºy2º
1° “A” 2373 3. 3° S/Communication “A” 3051
2° “A” 3051
3° “B” 5902 6.
1.5.3.
4° “A” 3051
1° “B” 5902 1. 1°y2°
2° “B” 5902 1. 2°
1.5.4.
3° “B” 5902 1. 3°
1.5.5. “B” 5902 1. 4°
1.5.6.1. “A” 2989 5. 5.1.
1.5.6.2. “A” 2989 5. 5.2.1.5
1.5.7. “A” 2373 3. 4°,5°
y 6°
1.6. 1° “A” 2102 1.
2° “A” 2102 2.
1.7. “A” 2814 3. 3.1. S/Communication “A” 3051
1.8. “A” 2412
1.9.1. “A” 2308 S/Communication “A” 3918
1.9.2. “A” 2177 3.
1.
1.10. “A” 3748 1. S/Communication “A” 3873
2.1 “A” 49 I 3.2.1. 1°
2.2. 1° “A” 49 I 3.2.1. 2°
2° “A” 2729 7. 7.2.1. 2°
2.
2.3. “A” 476 4.
3.1. "A" 1465 I 2.
3.2.1. "A" 1465 I 2. S/Communication "A" 2275,
point 2.3.
3.2.2. "A" 2275 2.3.
3.2.3. "A" 2275 2.1.
3.
3.3. "A" 1465 I 2.2. S/Communication "A" 2275
4. 4.1. “A” 431
4.2. “A” 2322
5.1. “A” 49 I 5.1 S/ Communication “A” 1124
5.2. “A” 3051
5.3. “A” 49 I 5.2. S/ Communication “A” 1124
y “A” 3051
5.4. “A” 3051
5.
5.5 “A” 1165
6.1. “A” 49 I 7.1.
6.2.1. “A” 49 I 7.2. S/Communication “A” 3051
6.2.2. “A” 49 I 7.2.1.
6.2.3. “A” 49 I 7.2.2. S/Communication “A” 3051
6.
6.3. “A” 49 I 7.3.1.

MINIMUM CAPITAL OF FINANCIAL ENTITIES
B.C.R.A. Section 8. Computable Patrimonial Responsibility.
Version: 3rd. COMMUNICATION “A“ 3918
Validity:
04/04/2003 ii) Acquisition with a transitory character of participations in companies to facilitate their development, with the aim of subsequently selling the holdings. Granting financing and advice on planning and direction to those companies. The calculation will be performed net of provisions for depreciation risk.
8.2.4.16. Shares or participations in the capital of companies received in payment of credits, whose holding exceeds the maximum time limits established for their liquidation in points 9.1.1. and 9.1.2. of Section 9. of the norms on “Credit Graduation”.
This deduction will be performed by the amount exceeding the maximum holding limit admitted.
8.3. Capital contributions.
For the purposes of all regulations linked to capital, its integration and increase, including those referred to regularization and health plans, contributions must be made exclusively in cash and/or national public securities, in pesos or in foreign currency. When it concerns national public securities, the contribution must be made in values that have habitual quotation in the stock exchanges and markets in which they trade.

MINIMUM CAPITAL OF FINANCIAL ENTITIES
ORDERED TEXT SOURCE NORM
Section Point Paragraph Com. Cap./
Annex
Point Paragraph Observations
8. 8.2.4.5. “A” 414
LISOL-1
VI 3.2.
“A” 1215 Specifications of the items of participations in financial entities not deductible for determining computable patrimonial responsibility.
8. 8.2.4.6. “A” 414
LISOL-1
VI 3.2.
8. 8.2.4.7. “A” 2863 3.
8. 8.2.4.8. “A” 414
LISOL-1
VI 3.2.
8. 8.2.4.9. “A” 2730 Incorporates interpretative clarification.
8. 8.2.4.10. “A” 2545
8. 8.2.4.11. “A” 414
LISOL-1
VI 3.2. Modified by Com. “A” 986.
8. 8.2.4.12. “A” 414
LISOL-1
VI 3.2.
8. 8.2.4.13. “A” 2287 4.
“A” 2607 1.
8. 8.2.4.14. “A” 2893 1.
8. 8.2.4.15. “A” 3087
8. 8.2.4.16. “A” 3918
8. 8.3. “A” 414
LISOL-1
VI 3.4. According to Com. “A” 1858.
9. 9.1. “A” 2227 unique 5.2.1. last According to Com. “A” 2649.
9. 9.2. 1º “A” 2227 unique 5.1.1. and
5.1.7.
According to Com. “A” 2649.
“A” 2227 unique 5.2.2.
9. 9.2. last “A” 2461 unique V.
10. 10.1 “A” 3278 2. According to Com. “A” 3366.
10.2. “A” 3278 2. According to Com. “A” 3366.

MINIMUM PROVISIONS FOR CREDIT RISK
B.C.R.A.
Section 2. Minimum Guidelines.
Version: 4th. COMMUNICATION “A“ 3918
Validity:
04/04/2003
2.1. Basic Guidelines.
2.1.1. General Criterion.
On the total of client debts, according to the classification that corresponds assign to them, the following minimum provisioning guidelines must be applied:
“Category With preferred guarantees
Without preferred guarantees

In normal situation and compliance 1% 1%
a) In observation and inadequate compliance
b) In negotiation or with refinancing agreements 3% 6% 5% 12%
With problems and deficient compliance 12% 25%
With high risk of insolvency and difficult recovery 25% 50%
Unrecoverable 50% 100%
Unrecoverable by technical disposition 100% 100%”
2.1.2. Special Criteria.
2.1.2.1. Participation certificates or debt titles guaranteed with assets of
trusts included in the financial entities law must be provisioned according to the percentage that fiduciaries indicate monthly with adjustment to the corresponding appropriation model.
2.1.2.2. When the classification in the "unrecoverable" category corresponds to the situation provided in the last paragraph of point 6.5.5. of Section 6. of the norms on debtor classification, the entire debt must be provisioned at 100%, except if it has preferred guarantees "A".
2.1.2.3. For the purposes of determining provisions, it will be considered that financings are covered with preferred guarantees up to the amount resulting
from the application of the coverage margins established in the norms on guarantees.

MINIMUM PROVISIONS FOR CREDIT RISK
B.C.R.A.
Section 2. Minimum Guidelines.
Version: 6th. COMMUNICATION “A“ 3918
Validity:
04/04/2003
Financings that exceed the respective coverage margins will be subject to the constitution of provisions for the percentages established for operations that do not have the aforementioned guarantees.
2.1.2.4. Financings fully covered with preferred guarantees "A" will be
subject to the constitution of the provision established with general character for the normal portfolio.
2.1.2.5. Financings -without responsibility for the assignor- backed by export credit insurance for commercial risk and with credit risk insurance "with the reach of public buyer" will be subject to the constitution
of the following provisions:
a) for the case that, once the loss has occurred, the financial entity has not made the claim in the terms fixed in the policy: the percentages established will be taken into account based on the delinquency according to the criteria applicable for the consumer portfolio, from the date of the first matured unpaid obligation, for the outstanding balance. Same criterion will be applied when it concerns operations considered as preferred guarantee "B". b) for the case that, once the loss has occurred, the financial entity has made the claim within the terms fixed in the policy:

if the insurance company does not reject the claim in the established terms and does not cancel the loss: the percentages established -without preferred guarantees- based on the delinquency according to the criteria
applicable for the consumer portfolio from the date of the first matured unpaid obligation, for the outstanding balance will be taken into account. In addition, the insurance company must be informed in the "Central of Debtors of the Financial System" in the category that corresponds according to the criteria applicable for the consumer portfolio.
if the insurance company rejects the claim, whether for formal or litigious reasons, the percentages established based on the delinquency according to the criteria
applicable for the consumer portfolio from the date of the first matured unpaid obligation, for the outstanding balance will be attributed.

MINIMUM PROVISIONS FOR CREDIT RISK
B.C.R.A.
Section 2. Minimum Guidelines.
Version: 5th. COMMUNICATION “A“ 3918
Validity:
04/04/2003
2.2. Complementary Guidelines.
2.2.1.Partial coverage with preferred guarantees "A".
The financings included that are covered with the preferred guarantees or counter-guarantees "A", will be separated from the remaining financings included, and the provision established with general character for the normal portfolio must be observed on the fraction of disbursed credits. On the remaining financings included, the minimum provisions resulting from these norms will be applied.
2.2.2. Treatment of accrued interest.
2.2.2.1. Debtors classified in category “in negotiation or with refinancing agreements”.
Provisions must be constituted for 100% of interest and similar accessories regarding client debts classified “in negotiation or with refinancing agreements” when defaults exceeding 90 days in the payment of obligations are registered. The entity may opt directly to interrupt the accrual of interest. It will be necessary to release provisions once the refinancing agreement of debts is reached.
2.2.2.2. Debtors classified in categories 3, 4 or 5.
Provisions must be constituted for 100% of interest and similar accessories corresponding to client debts classified “with problems” or “deficient compliance”, “with high risk of insolvency” or “difficult recovery”, or “unrecoverable”, accrued from the moment they are classified in any of those categories. The entity may opt, directly, to interrupt the accrual of those concepts. The amount of interest and similar accessories accrued that are collected, corresponding to client debts included in the categories “with problems” or “deficient compliance”, “with high risk of insolvency” or “difficult recovery”, with or without preferred guarantees, or “unrecoverable”, with preferred guarantees, will not generate the release of provisions constituted, unless the 100% of the recorded claims by capital and accessories and by other computable concepts (contingent obligations) is covered, all considered per client. The collection of the aforementioned concepts that had not been accrued accounting-wise, having opted to interrupt their accrual, will not generate profits, unless the indicated coverage is met by constituting the pertinent provisions. The greater coverage with provisions originating from the preceding requirements will not determine the obligation to reclassify the client in lower categories

MINIMUM PROVISIONS FOR CREDIT RISK
B.C.R.A.
Section 2. Minimum Guidelines.
Version: 4th. COMMUNICATION “A“ 3918
Validity:
04/04/2003
2.2.3. Permanence in categories 4 and/or 5, regarding assistance with preferred guarantees.
2.2.3.1. General Criterion.
The permanence in the categories "with high risk of insolvency", "difficult recovery" and/or "unrecoverable" for a period of 24 consecutive months will determine that, from the twenty-fifth month, the minimum provision corresponding to operations without preferred guarantees must be applied, unless the entity opts for the situations mentioned in points 2.2.3.2. to 2.2.3.4.
2.2.3.2. Financings with mortgage guarantee on housing or rural real estate destined for agricultural or forestry exploitation.
To exercise this option, the favorable opinion of a lawyer on the recovery of the credit must be obtained, observing the following procedure:
a) The lawyer's report will refer, at minimum, to the aspects that are listed:
i) Quality of instrumentality of the loan and of the title of the property offered as collateral and validity of the latter. ii) Actions taken to collect the credit, justifying the use of the judicial or extrajudicial path. If the judicial execution is in progress, it will also inform:
iii) Reasons eventually opposed by the defendant in the lawsuit and their consistency with what is required in
section i).
iv) Description of the reasons that have caused delays in the course of the case. v) Status of the lawsuit at the time of the report. vi) Estimation of the time required to obtain a final resolution and the amounts that would be recognized. Infractions in this matter are subject to the sanctions referred to in article 41 of the Financial Entities Law, according to what is established in its article 42, last paragraph. b) An appraisal of the mortgaged real estate will be performed with adjustment, in case it refers to housing, to the criteria established in the Appraisal Manual.

MINIMUM PROVISIONS FOR CREDIT RISK
B.C.R.A.
Section 2. Minimum Guidelines.
Version: 4th. COMMUNICATION “A“ 3918
Validity:
04/04/2003
Infractions in this matter are subject to the sanctions referred to in article 41 of the Financial Entities Law, according to what is established in its article 42, last paragraph. c) A coverage margin of 80% will be applied to the obtained appraisal value, and then, expenses of any nature derived from the execution process, if any, will be deducted. d) The previously calculated remaining amount will be compared with the book value of the claim, net of the provisions already constituted. When the remaining amount is superior to the net claim of provisions, it will not be necessary to increase the provisioning. In the case that the remaining amount does not reach the claim, the provisions must be increased, at minimum, so that the book value net of provisions is equal to or inferior to the remaining appraisal value. Similarly, the procedure will be followed when the recovery value, according to the lawyer's report, is inferior to the registered claim even when the remaining appraisal value exceeds it. e) The procedure must be repeated, at least, annually and for 3 years as maximum. After five years (60 consecutive months) of permanence in the categories 4 and/or 5, the financings must be provisioned considering them operations without preferred guarantees. 2.2.3.3.Financings with mortgage guarantee on other real estate. The procedure established in point 2.2.3.2. may be applied, with the exception that the coverage margin will be 50%. 2.2.3.4.Collective payment agreements. The general criterion may exclude situations where there are judicial or extrajudicial homologated agreements or private arrangements negotiated jointly with creditor financial entities and do not register defaults.

MINIMUM PROVISIONS FOR CREDIT RISK
B.C.R.A.
Section 2. Minimum Guidelines.
Version: 4th. COMMUNICATION “A“ 3918
Validity:
04/04/2003
2.2.4. Debtors in category 6.
The inclusion of debtors in this category will determine the obligation to provision 100% of the financings, including renewals, extensions, deferrals - express or tacit-, etc., that are granted after that inclusion, once 90 or 180 days have elapsed counted from the day on which the first of those financings was agreed, depending on whether they concern debtors included in point
6.5.6.1. sections ii) to iv) or section i), respectively, of Section 6. of the
norms on “Debtor Classification”.
In the remaining situations provided for this category, 100% provision will be applied to the total debt.
2.2.5. Additional Credit
Additional financings implying fund disbursements for amounts that do not exceed the result of applying on the debt balance -in each entity- on the day prior to its granting, the proportions established below may be provisioned based on the percentage established for clients in normal situation Category % 5 10 4 15 3 20 2 40 The modification towards higher levels of the classification assigned to the client will determine the change of the assistance limit according to what was previously provided. Defaults in the payment of services corresponding to the additional assistance will determine the obligation to provision the assistance according to the objective guidelines of delay or legal situation established for the purposes of the classification of debtors included in the consumer or housing portfolio, even when it concerns borrowers included in the commercial portfolio, for which effect the additional financing will be treated independently of the rest of the client's debt. The additional financing granted is independent of the assistance that may be provided in operations that are fully covered with preferred guarantees “A”, for which there are no other limitations than those provided in the relevant norm.

MINIMUM PROVISIONS FOR CREDIT RISK
B.C.R.A.
Section 2. Minimum Guidelines.
Version: 4th. COMMUNICATION “A“ 3918
Validity:
04/04/2003
2.3. Provisions higher than the minimums.
Entities may make provisions for amounts higher than the minimums established, if they deem it reasonable, but in such cases it must be kept in mind that the application of percentages corresponding to other subsequent levels will determine the automatic reclassification of the client by assimilation to the quality grade associated with the minimum provision, except in the cases referred to in point 2.2.2.
2.4. Character of the provisions.
The provision on the normal portfolio will be of a global character, while those corresponding to the other categories will have individual imputation.
2.5. Totally provisioned debts of debtors in category “unrecoverable”.
The debts of clients classified in category “unrecoverable” and totally provisioned for credit risk must be eliminated from the assets from the seventh month following that in which those circumstances are verified and accounted for in off-balance sheet accounts as long as the entity continues the collection actions of its claim. This will also apply to the debts of clients classified in category “unrecoverable by technical disposition”, in case that by their situation they correspond to be located in category “unrecoverable” and those are totally provisioned.
2.6. Requirements of the Superintendence of Financial and Exchange Entities.
Upon request made by the Superintendence of Financial and Exchange Entities, financial entities must constitute provisions for credit risk at the percentages that are established when:
2.6.1. from the analysis of the credit portfolio to verify the correct application of the
provisions on debtor classification results, in the judgment of that Superintendence, that the constituted provisions are insufficient, according to the procedure provided in point 2.7. of this Section, or
2.6.2. from the elements made available to the acting inspectors it results that the
accounting registrations made by the entities do not accurately reflect the economic and legal reality of the operations or that actions or tricks have been carried out to distort or disguise the true character or scope of the operations, with effectiveness on the date indicated in each case.

MINIMUM PROVISIONS FOR CREDIT RISK
B.C.R.A.
Section 2. Minimum Guidelines.
Version: 3rd. COMMUNICATION “A“ 3918
Validity:
04/04/2003
2.7. Procedure to account for provisions at the request of the Superintendence of Financial and Exchange Entities.
For the purposes provided in point 2.6.1. of this Section, the Superintendence of Financial and Exchange Entities will communicate to the entity the amount of the adjustments to be accounted for, which will have a term of 30 calendar days, counted from the day following the date of the relevant notification, to formulate the considerations that, in its judgment, justify maintaining the criteria applied by it to constitute the observed provisions. Upon expiration of said term without the entity making such a presentation, the regularization of the insufficient provisions must be reflected accounting-wise in the month in which this circumstance is verified. In case that the entity makes that presentation, the Superintendence of Financial and Exchange Entities will issue a ruling within 20 calendar days following the date of its receipt. The accounting of the provisions resulting from that final determination must be performed in the month of the relevant notification.
2.8. Defaults in the accounting of provisions required by the Superintendence of
Financial and Exchange Entities.
The default in the accounting of provisions in the terms provided in points 2.6.1. and 2.6.2. of this Section, will have the following consequences, for the purposes of the application of article 41 of the Financial Entities Law and its regulation:

it will be considered a serious offense.
it will determine a minimum fine equivalent to 1% of the amount of the unaccounted provisions.
This without prejudice to the other sanctions that might result from the respective summary.
Such sanctions will fall on the entity and the natural persons who by their functions are responsible for the defaults and on the trustee or members of the supervisory council and external auditor for the responsibilities inherent to their role. The entity and the aforementioned persons will be jointly responsible for the payment of the imposed fines. The sanctions will have immediate execution, without prejudice to the right to appeal granted by article 42 of the Financial Entities Law and its regulation.

B.C.R.A.
ORIGIN OF THE PROVISIONS INCLUDED IN THE
ORDERED TEXT OF THE NORMS ON
MINIMUM PROVISIONS FOR CREDIT RISK
ORDERED TEXT SOURCE NORM
Section Point Para. Com. Annex Point Para. Observations
1. 1.1. “A” 2216 2. 1º
1. 1.2.1. “A” 2216 2. 1º
1. 1.2.2. “A” 2216 II 2º Includes interpretative clarification
1. 1.2.3. “A” 2216 II 2º
1. 1.2.4. “A” 2216 II 3º According to Com. “A” 3040 (point
3.)
1. 1.2.5. “A” 3040
1.2.6. "A"3064
2. 2.1.1. 1°y
table
“A” 2216 II 1° Modified by Com. “A” 2440,
“A” 3339.
2. 2.1.2.1. “B” 6331 6.
2. 2.1.2.2. “A” 2826 2°
2. 2.1.2.3.
2. 2.1.2.4.
“A” 2932 7° Includes interpretative clarification.
2. 2.1.2.5. “A” 3314
2. 2.2.1. “A” 2216 II 6º According to Com. "A" 2932 (point
15.)
2. 2.2.2. “A” 2216 II 9ºy
last
According to Com. “A” 3040 (point
5.) Includes interpretative clarification, “A” 3339.
2. 2.2.3.1. “A” 2216 II 8° According to Com. “A” 2442, 3091.
2. 2.2.3.2. “A” 3091
2. 2.2.3.3. “A” 3091
2. 2.2.3.4. “A” 2216 II 8° According to Com. “A” 2442, 3091.
2. 2.2.4. “A” 2440 2. 1º Modified by the Com. "A"
2890 (point 2.) and “A” 3157
(point 1.) and 3339
2. 2.2.5. “A” 3157 2. According to Com. “A” 3918
2. 2.3. “A” 2216 II 7º
2. 2.4. “A” 2216 II 4º
2. 2.5. 1º “A” 2357 1.
2. 2.5. last Incorporates criterion not given
general character previously.
2. 2.6. “A” 2287 4. Modified by the Com. "A"
2893 (point 2.).
2. 2.6.1. “A” 2287 4. Idem previous
2. 2.6.2. “A” 2287 4. Idem previous
“A” 2607 1.
2. 2.7. “A” 2893 3.
2.8. “A” 2893 3.
3. 3.1. 1º “A” 2373 8. and 3. Includes interpretative clarification
3. 3.1. 2º “A” 2373 8.
3. 3.1. last “B” 5902 3. Includes interpretative clarification
4. 4.1. “A” 2227 unique 5.2.1. last According to Com. “A” 2649
4. 4.2. “A” 2227 unique 5.1.5. According to Com. “A” 2649
“A” 2227 unique 5.2.2.

B.C.R.A. UPDATED TEXT OF THE RULES ON GUARANTEES Version: 3rd. COMMUNICATION “A” 3918 Validity:
04/04/2003

-Index
Section 1. Classes.
1.1. Preferred “A”.
1.2. Preferred “B”.
1.3. Remaining guarantees.
Section 2. Conditions.
2.1. Consideration of preferred guarantees.
2.2. Supporting documentation.
Section 3. Computation.
3.1. Coverage margins.
3.2. Partial coverage with preferred guarantees.
Section 4. Transitional provisions.

GUARANTEES
B.C.R.A.
Section 1. Classes.
Version: 3rd. COMMUNICATION “A” 3918
Validity:
04/04/2003

1.1. Preferred “A”.
These are constituted by the assignment or pledge of rights regarding titles or documents of any nature that, effectively instrumented, ensure that the entity can dispose of funds for the cancellation of the obligation contracted by the client, without the need to previously request payment from the debtor, since the realization depends on solvent third parties or the existence of markets in which the aforementioned titles or documents, or the effects they represent, can be liquidated directly, whether their maturity coincides with or is subsequent to the maturity of the loan or the periodic payments committed, or if the proceeds are applied to the cancellation of the debt or transferred directly to the entity for that purpose, provided that the credit operations do not exceed, measured residually, a term of 6 months.

The following are included in this category, with the character of a taxative enumeration:

1.1.1. Guarantees constituted in cash, in pesos, or in the following foreign currencies: US dollars, Swiss francs, British pounds, yen, and euros, taking into account their quotation value permanently.

1.1.2. Guarantees constituted in gold, taking into account their quotation value permanently.

1.1.3. Pledges of fixed-term deposit certificates issued by the financial entity itself, constituted in the currencies referred to in point 1.1.1.

1.1.4. Automatic reimbursement in export operations, at the expense of the Central Bank of the Argentine Republic, in accordance with the respective bilateral or multilateral agreement regimes.

1.1.5. Guarantees or pledges of national public securities, taking into account their permanent market value, which must respond to a normal and habitual quotation, in the country or abroad, of wide dissemination and easy access to public knowledge.

1.1.6. Guarantees and letters of credit issued by foreign banks with international risk rating “A” or higher, granted by any of the rating agencies admitted by the rules on “Evaluation of financial entities”, which is not the parent company or the controlling or controlled entity of the local entity, and to the extent that they are unrestricted and that the accreditation of funds is made immediately upon simple request of the beneficiary entity.

GUARANTEES
B.C.R.A.
Section 1. Classes.
Version: 4th. COMMUNICATION “A” 3918
Validity:
04/04/2003

1.1.7. “Warrants” on fungible goods that have normal and habitual quotation in local or international markets, of wide dissemination and easy access to public knowledge.

1.1.8. Guarantees constituted by the assignment of collection rights on invoices to consumers for services already provided, issued by service provider companies (companies that supply electricity, gas, telephone, water, etc.), provided that it concerns a set of invoices representing a quantity of no less than 1,000 clients.

1.1.9. Guarantees constituted by the assignment of collection rights regarding credit card coupons.

1.1.10. Credit titles (deferred payment checks, promissory notes, bills of exchange, and credit invoices) discounted with responsibility for the assignor, to the extent that the following conditions are observed:

1.1.10.1. In the set of operations carried out with each assignor, it must be verified regarding any of the subjects legally obligated to pay other than the assignor:
a) That at least 85%, measured in relation to the nominal value of the documents, are classified in “normal situation” (category 1) according to the latest information available in the “Central of debtors of the financial system”. b) That, as a maximum, 15%, measured in relation to the nominal value of the documents, are classified in category 2 or are persons not informed in said central. c) That, as a maximum, 20% of the nominal value of the documents corresponds to the same subject obligated to pay. This limitation will not be applicable when it concerns documents up to $ 5,000.

These requirements must be observed considering the nominal value of the documents still pending maturity and the new documents to be discounted, when carrying out each discount operation.

GUARANTEES
B.C.R.A.
Section 1. Classes.
Version: 4th. COMMUNICATION “A” 3918
Validity:
04/04/2003

1.1.10.2. Regarding the assigned documents, it must be verified:
a) That, in addition to the pertinent endorsement, there is a record of the transfer formulated by the assignor. b) That they are appraised according to the category assigned in the “Central of debtors of the financial system”, considering the following percentages in relation to their nominal value:

Assignor Category	Subjects Obligated to Pay
	(A)	(B)
Category 1	90%	80%
Category 2 and unclassified	80%	70%

(A): 1 or 2
(B): 3, 4, 5 or unclassified c) That they originate from sales operations or service provision corresponding to the assignor's activity. This condition can be verified through a sworn statement made by the client or by any other means that the entity deems convenient. d) That they are not replaced at maturity, and must be presented for collection. Nevertheless, their replacement is admitted - before maturity - when regarding the subjects obligated to pay, any of the following circumstances are verified:
i) That they have requested preventive bankruptcy or their bankruptcy has been requested. ii) That they are incorporated into the “Central of rejected checks” or complaints of loss or theft have been filed in judicial proceedings, relating to other deferred payment checks from this portfolio. iii) That they register the non-payment of other credit titles - other than the deferred payment check - confirmed by protest, which are part of this portfolio.

GUARANTEES
B.C.R.A.
Section 1. Classes.
Version: 4th. COMMUNICATION “A” 3918
Validity:
04/04/2003

1.1.10.3. The set of operations carried out with different clients must constitute a portfolio that adjusts to the following guidelines:
a) Maximum limit of the total nominal value of documents corresponding to the same subject obligated to pay: 2.5% regarding the calculable equity responsibility of the entity for the month prior to the one in question. b) Maximum limit of the total nominal value of the documents corresponding to subjects obligated to pay that, individually considered, are equivalent to 1.5% or more of the calculable responsibility of the entity for the month prior to the one in question: 25% of this portfolio measured by the monthly average of daily balances of the month prior to the one in question. c) Maximum limit of the nominal value of the documents corresponding to the same subject obligated to pay: 5% of this portfolio measured by the monthly average of daily balances of the month prior to the one in question. d) Global limit of the portfolio in nominal value: 100% of the calculable equity responsibility of the entity for the month prior to the one in question.

When the subjects obligated to pay are clients of the financial entity, the amount of assistance granted under this modality will be imputed to their credit margins, not being computed for the purposes of the limits established previously.

Within each period, the limits must be observed daily.

1.1.10.4. In the portfolio discounted by a specific client, the amount not cancelled by the client of the unpaid documents and of the checks whose registration has been rejected, may not exceed the equivalent to 100% of the remaining appraisal margin. In case of exceeding that value, the assignor will not be able to access new credit title discount operations under this modality, except to the extent necessary to replenish the amount of those unpaid documents. Once the total cancellation of the client's portfolio is achieved, the entity may grant them financing adjusted to this regime.

GUARANTEES
B.C.R.A.
Section 1. Classes.
Version: 4th. COMMUNICATION “A” 3918
Validity:
04/04/2003

In all cases where this point mentions “subject/s obligated/s to pay”, it refers to any of the signatories of the documents that hold that condition as issuer, endorser, acceptor, or guarantor.

1.1.11. Direct guarantees issued by central governments, agencies, or dependencies of central governments of countries members of the Organization for Economic Co-operation and Development (O.E.C.D.) that have an international risk rating “A” or higher granted by any of the rating agencies admitted by the rules on “Evaluation of financial entities”.

1.1.12. Guarantees constituted by the assignment of rights over the collection of tariffs and taxes in public works concessions, provided that it does not exceed 50% of the projected income.

1.1.13. Guarantees or pledges of private securities (shares or bonds) issued by national or foreign companies, taking into account their permanent market value, which must respond to a normal and habitual quotation in local or international markets, of wide dissemination and easy access to public knowledge.

Local issuing companies must maintain valid debt papers that have a local risk rating “A” or higher, granted by any of the rating agencies admitted by the rules on “Evaluation of financial entities”.

Foreign titles must correspond to companies whose debt papers have an international risk rating “A” or higher granted by any of those rating agencies.

1.1.14. Credit titles (deferred payment checks, promissory notes, bills of exchange, and credit invoices), discounted with responsibility for the assignor, in which any of the subjects legally obligated to pay, holding that condition as issuer, endorser, acceptor, or guarantor, meets at least one of the following conditions:

1.1.14.1. Register a level of indebtedness with the system equal to or greater than $ 5,000,000, according to the latest information available in the “Central of debtors of the financial system” and being informed by at least five financial entities in which the indebtedness - in each of them - is at least $ 1,000,000.

GUARANTEES
B.C.R.A.
Section 1. Classes.
Version: 3rd. COMMUNICATION “A” 3918
Validity:
04/04/2003

It must be classified, in said central, “in normal situation” by all financial entities, and in the case of maintaining valid debentures or other debt titles, these must have a rating at the levels established in point 1.1.14.2.

The total financing granted to different assignors and assigned by the entity under this modality to the same legally obligated subject, may not exceed 10% of the debts of the latter with the financial system, reported in the “Central of debtors of the financial system”, nor 5% of the calculable equity responsibility of the entity for the month prior to the one in question, whichever is lower. This last limit will not be observed in case the entity has a credit file of said obligated subject, so the operations will be computed within the assistance margins provided by the applicable rules in the matter.

1.1.14.2. Maintain valid debentures or other debt titles in the local market that have local risk rating and all of them are, at minimum, “A” or higher, for a sum of no less than $ 15,000,000.

The total financing granted to different assignors and assigned by the entity under this modality to the same legally obligated subject, may not exceed 5% of the calculable equity responsibility of the entity for the month prior to the one in question. This limit will not be observed in case the entity has a credit file of said obligated subject, so the operations will be computed within the assistance margins provided by the applicable rules in the matter.

1.1.15. Guarantees or guarantees granted by reciprocal guarantee societies registered in the Registry enabled at the Central Bank of the Argentine Republic or by provincial funds constituted with the same object as those societies, admitted by this Institution, regardless of the term of the operation, provided that they realize the uncanceled credits within 30 calendar days of their maturity.

GUARANTEES
B.C.R.A.
Section 1. Classes.
Version: 6th. COMMUNICATION “A” 3918
Validity:
04/04/2003

1.1.16. Export credit insurance - operations without responsibility for the assignor - that cover commercial risk and, if applicable, extraordinary risks (at the expense of the National State, Law 20.299), including credit risk insurance “with the reach of public buyer”, regardless of the term of the operation. The policy covering commercial risk must contemplate the realization of credits within 90 calendar days of their maturity and be issued by:
a) Local insurance companies that have:

“AA” rating or higher granted by any of the risk assessment companies registered in the registry of the National Securities Commission and
Reinsurance in insurance companies:
i) Local that have “AA” rating or higher assigned by a national risk assessment company, or ii) Foreign that have international risk rating “A” or higher.

The amount of reinsurance must be adjusted to the regulations issued by the Superintendence of Insurance of the Nation. b) Local branches of foreign insurance companies that have international risk rating “A” or higher. c) Local subsidiaries of foreign insurance companies to the extent that regarding the controlling company, the following conditions are verified:

Have the rating cited in the previous section b) and
Have explicitly guaranteed the obligations of the subsidiary.

1.1.17. Pledges of reprogrammed deposit certificates “CEDROS” issued by the financial entity itself, provided that the average life term of the series is up to 6 months.”

1.2. Preferred “B”.
These are constituted by real rights over goods or third-party commitments that, effectively instrumented, ensure that the entity can dispose of funds for the cancellation of the obligation contracted by the client, having previously complied with the procedures established for the execution of the guarantees, and by the guarantees defined in point 1.1, with the exception of those included in point 1.1.10., as long as the residual term of the operations exceeds the term of 6 months.

GUARANTEES
B.C.R.A.
Section 1. Classes.
Version: 3rd. COMMUNICATION “A” 3918
Validity:
04/04/2003

The following are included in this category, with the character of a taxative enumeration:

1.2.1. First-degree mortgage on real estate, and regardless of its degree of prelation as long as the entity is the creditor in all degrees.

1.2.2. Fixed pledge with first-degree registration or with displacement to the entity regarding motor vehicles and agricultural, road, and industrial machinery (to the extent that they are registered in the pertinent national motor vehicle property registry and have a market that allows obtaining a reference value).

1.2.3. Guarantees or guarantees granted by reciprocal guarantee societies registered in the Registry enabled at the Central Bank of the Argentine Republic or by provincial funds constituted with the same object as those societies, admitted by this Institution, regardless of the term of the operation, to the extent that the requirement mentioned in point 1.1.15 is not met.

1.2.4. Goods in financial leasing that had been agreed upon in accordance with the provisions of Law 25.248 on real estate and on motor vehicles and agricultural, road, and industrial machinery (to the extent that they are registered in the pertinent national motor vehicle property registry and have a market that allows obtaining a reference value).

1.2.5. Export credit insurance, to the extent that the realization terms of claims for commercial risk exceed 90 days without exceeding 180 days counted continuously from the maturity of the credits, regardless of the term of the operation, and the other safeguards provided in point 1.1.16 are observed.

1.2.6. Preferred “A”, in operations with a residual term superior to 6 months., with the exception of those included in point 1.1.10.

1.3. Remaining guarantees.
Guarantees not explicitly included in the preceding points, such as mortgages in a degree other than first and pledge or pledge of shares or commercial documents and encumbrances constituted abroad adjusted to legislations different from the local one - except for the cases expressly provided - will be considered non-preferred.

GUARANTEES
B.C.R.A.
Section 3. Computation.
Version: 3rd. COMMUNICATION “A” 3918
Validity:
04/04/2003

3.1. Coverage margins.
For their determination in operations covered with preferred “A” guarantees contracted under figures other than discount, the amount of capital and interest will be taken into account.

Preferred guarantees will be computed by the following percentages:

3.1.1. Cash (point 1.1.1.).

3.1.1.1.: In pesos:
i) For coverage of an operation in pesos: 100%. ii) For coverage of an operation in foreign currency: 80% of the quotation value.

3.1.1.2.: In foreign currency:
i) For coverage of an operation in pesos: 80% of the quotation value. ii) For coverage of an operation in the same foreign currency: 100%. iii) For coverage of an operation in a different foreign currency: 80% of the quotation value.

3.1.2. Gold (point 1.1.2.): 90% of the realization value.

3.1.3. Fixed-term deposit certificates (point 1.1.3.).

3.1.3.1. In pesos :
i) For coverage of an operation in pesos: 100%. ii) For coverage of an operation in foreign currency: 80% of the quotation value, calculated on the invested capital.

3.1.3.2. In foreign currency:
i) For coverage of an operation in pesos: 80% of the quotation value, calculated on the invested capital. ii) For coverage of an operation in the same foreign currency: 100%.

GUARANTEES
B.C.R.A.
Section 3. Computation.
Version: 5th. COMMUNICATION “A” 3918
Validity:
04/04/2003

iii) For coverage of an operation in a different foreign currency: 80% of the quotation value, calculated on the invested capital.

3.1.4. Reimbursement of export operations (point 1.1.4.): 100%.

3.1.5. National public securities (point 1.1.5.): 75% of their quotation value.

3.1.6. Guarantees and letters of credit from foreign banks (point 1.1.6): 100%.

3.1.7. “Warrants” (point 1.1.7.): 80% of the market value of the goods.

3.1.8. Invoices to consumers for services already provided, issued by service provider companies (point 1.1.8.): 80% of the nominal value of the documents.

3.1.9. Credit card coupons (point 1.1.9.):

3.1.9.1. Issued by financial entities: 90% of the nominal value of the documents.

3.1.9.2. Issued by companies that are not financial entities that meet the conditions required to be a subject of credit: 80% of the nominal value of the documents.

3.1.9.3. Issued by the remaining non-financial companies: 50% of the nominal value of the documents.

3.1.10. Credit titles (point 1.1.10.).

3.1.10.1. Documents corresponding to subjects obligated to pay classified in category 1 and in cases where the assignors are classified in categories 1 or 2, in the “Central of debtors of the financial system”: 90%.

3.1.10.2. Documents corresponding to subjects obligated to pay classified in category 2 or that have not been classified and in cases where the assignors are classified in categories 1 or 2, in the “Central of debtors of the financial system”: 80%.

3.1.10.3. Documents corresponding to subjects obligated to pay classified in category 1 and in cases where the assignors are classified in categories 3, 4, 5 or that have not been classified, in the “Central of debtors of the financial system”: 80%.

GUARANTEES
B.C.R.A.
Section 3. Computation.
Version: 6th. COMMUNICATION “A” 3918
Validity:
04/04/2003

3.1.10.4. Documents corresponding to subjects obligated to pay classified in category 2 or that have not been classified and in cases where the assignors are classified in categories 3, 4, 5 or that have not been classified, in the “Central of debtors of the financial system”: 70%.

3.1.11. Direct guarantees from foreign governments (point 1.1.11.): 100%.

3.1.12. Assignment of rights over the collection of tariffs and taxes in public works concessions (point 1.1.12.): 80%.

3.1.13. Private securities (point 1.1.13.): 70% of their quotation value.

3.1.14. First-degree mortgage on real estate, and regardless of its degree of prelation as long as the entity is the creditor in all degrees (point 1.2.1.):

3.1.14.1. On real estate for own housing that are the object of the encumbrance: 75% of the appraised value of the property.

3.1.14.2. On real estate for uses other than own housing: 50% of the appraised value of the property.

3.1.15. Fixed pledge with first-degree registration or with displacement to the entity (point 1.2.2.):.

3.1.15.1. Motor vehicles and agricultural machinery: 75% of the market value.

3.1.15.2. Road and industrial machinery: 60% of the market value.

3.1.16. From reciprocal guarantee societies or provincial funds constituted with the same object as those societies (points 1.1.15. and 1.2.3.): 80%.

3.1.17. Credit titles (point 1.1.14.): 85% of the nominal value of the documents.

3.1.18. Goods in financial leasing (point 1.2.4.):

3.1.18.1. Real estate for the tenant's housing: 75% of the appraised value of the property.

3.1.18.2. Other real estate: 50% of the appraised value of the property.

3.1.18.3. Motor vehicles and agricultural machinery: 75% of the appraised value of the property.

GUARANTEES
B.C.R.A.
Section 3. Computation.
Version: 2nd. COMMUNICATION “A” 3918
Validity:
04/04/2003

3.1.18.4. Road and industrial machinery: 60% of the appraised value of the asset.
3.1.19. Export credit insurance (points 1.1.16. and 1.2.5.): 100% of the nominal value of the documents.
3.1.20. Reprogrammed deposit certificates “CEDROS” (point 1.1.17.):
3.1.20.1. For coverage of an operation in pesos: 100% of the nominal value, computing the Reference Stabilization Coefficient up to the date the guarantee is constituted.
3.1.20.2. For coverage of an operation in foreign currency: 80% of the nominal value, computing the Reference Stabilization Coefficient up to the date the guarantee is constituted.

3.2. Partial coverage with preferred guarantees.
When existing preferred guarantees do not cover the total assistance to the client, the portion not reached with that coverage will have the treatment established for debts without preferred guarantees. To this effect, the market value of those assets that have a quotation must be taken into account permanently, as contemplated in points 1.1.1., 1.1.2., 1.1.5. and 1.1.13. of Section 1.

GUARANTEES
B.C.R.A.
Section 4. Transitional provisions.
Version: 1st. COMMUNICATION “A” 3918
Validity:
04/04/2003

4.1. With validity until 12.31.03, the provisions established in the first paragraph of point 1.1. of Section 1 shall apply, provided that credit operations do not exceed, measured residually, a term of 6 months, with the exception of those included in points 1.1.10. and 1.1.14., under the conditions established below:
Credit titles (deferred payment checks, promissory notes, bills of exchange, and credit invoices) with a residual term not exceeding 60 days shall be considered as preferred guarantees “A”, provided that the remaining conditions established in points 1.1.10. and 1.1.14. are met, as applicable. Preferred guarantees “B” shall be considered as preferred guarantees “A”, in operations with a residual term greater than 6 months or greater than 60 days with respect to those included in point 1.1.14., with the exception of those included in point 1.1.10.

4.2. With validity until 12.31.03, the coverage margins established below for certain instruments shall apply:
4.2.1. Invoices to consumers for services already rendered, issued by service provider companies to the public (point 1.1.8.): 70% of the nominal value of the documents.
4.2.2. Credit card coupons (point 1.1.9.):
4.2.2.1. Issued by financial entities: 80% of the nominal value of the documents.
4.2.2.2. Issued by companies that are not financial entities but meet the conditions required to be a credit subject: 70% of the nominal value of the documents.
4.2.2.3. Issued by the remaining non-financial companies: 30% of the nominal value of the documents.
4.2.3. Credit titles (point 1.1.10.).
4.2.3.1. Documents corresponding to obligors classified in category 1 and in cases where the assignors are classified in categories 1 or 2, in the "Central of debtors of the financial system": 80%.
4.2.3.2. Documents corresponding to obligors classified in category 2 or not classified and in cases where the assignors are classified in categories 1 or 2, in the "Central of debtors of the financial system": 70%.
4.2.3.3. Documents corresponding to obligors classified in category 1 and in cases where the assignors are classified in categories 3, 4, 5 or not classified, in the "Central of debtors of the financial system": 70%.

GUARANTEES
B.C.R.A.
Section 4. Transitional provisions.
Version: 1st. COMMUNICATION “A” 3918
Validity:
04/04/2003

4.2.3.4. Documents corresponding to obligors classified in category 2 or not classified and in cases where the assignors are classified in categories 3, 4, 5 or not classified, in the "Central of debtors of the financial system": 60%.
4.2.4. Credit titles (point 1.1.14.): 80% of the nominal value of the documents.

B.C.R.A.
ORIGIN OF THE PROVISIONS INCLUDED IN THE ORDERED TEXT OF THE RULES ON GUARANTEES

ORDERED TEXT	ORIGIN NORM
Section	Point	Paragraph	Comm.	Annex	Point	Paragraph	Observations
1.	1.1.	“A” 2932	Único	1.1.
1.	1.1.1.	“A” 2216	I	1.	3º, a)		According to Com. “A” 2443, “A” 2932 and “A” 3918.
1.	1.1.2.	“A” 2216	I	1.	3º, a)		According to Com. “A” 2443, “A” 2932 and “A” 3918.
1.	1.1.3.	“A” 2216	I	1.	3º, b)		According to Com. “A” 2932 and “A” 3918.
1.	1.1.4.	“A” 2216	I	1.	3º, c)		According to Com. “A” 2932.
1.	1.1.5.	“A” 2216	I	1.	3º, d)		According to Com. “A” 2932.
1.	1.1.6.	“A” 2216	I	1.	3º, e)		According to Com. “A” and “A” 3918.
1.	1.1.7.	“A” 2216	I	1.	3º, g)		According to Com. “A” 2932.
1.	1.1.8.	“A” 2216	I	1.	3º, h)		According to Com. “A” 2932.
1.	1.1.9.	“A” 2216	I	1.	3º, i)		According to Com. “A” 2932.
1.	1.1.10.	“A” 2932	único	1.1.11.			According to Com. “A” 3104.
1.	1.1.11.	“A” 2932	único	1.1.12.
1.	1.1.12.	“A” 2932	único	1.1.13.
1.	1.1.13.	1.1.13.	2°	“A” 2932	único	1.1.14.	According to Com. “A” 3918
1.	1.1.14.	“A” 3114	1.
1.	1.1.14.2.	“A” 3114	1.				According to Com. “A” 3918
1.	1.1.15.	“A” 3141					According to Com. “A” 3307 and “A” 3918.
1.	1.1.16.	“A” 3314
1.	1.1.17.	“A” 3918	5.
1.	1.2.	“A” 2932	único	1.2.			According to Com. “A” 3104.
1.	1.2.1.	“A” 2419	1.	1º			According to Com. “A” 2563 (points 1. and 2.), “A” 2932 and “A” 3314.
1.	1.2.2.	“A” 2448					Debtor status statement (point 6.1.2.2.2.), Com. “A” 2932 and “A” 3918.
1.	1.2.3.	“A” 2448					Debtor status statement (point 6.1.2.2.2.), Com. “A” 2932 and “A” 3918.
1.	1.2.4.	“A” 2410	7.				According to Com. “A” 3141.
1.	1.2.5.	“A” 3259	1.				According to Com. “A” 3314.
1.	1.2.6.	“A” 3314
1.	1.3.	“A” 2932	único	1.2.4.
2.	2.1.	“A” 7					Specifications of the "other received guarantees" items, modified by Com. “A” 2932.
2.	2.1.	1º	“A” 2448				Debtor status statement (point 6.1.2.2.2.).
2.	2.1.	2º	“A” 2932	único	2.1. 2º
2.	2.2.	“A” 2216	I	1.	4º

GUARANTEES

ORDERED TEXT	ORIGIN NORM
Section	Point	Paragraph	Comm.	Annex	Point	Paragraph	Observations
3.	3.1.	“A” 2932	único	3.1.
3.	3.1.1.	“A” 2932	único	3.1.1.			According to Com “A” 3918.
3.	3.1.2.	“A” 2932	único	3.1.2.
3.	3.1.3.	“A” 2932	único	3.1.3.			According to Com “A” 3918.
3.	3.1.4.	“A” 2932	único	3.1.4.
3.	3.1.5.	“A” 2932	único	3.1.5.			According to Com. “A” 3918.
3.	3.1.6.	“A” 2932	único	3.1.6.			According to Com. “A” 3918.
3.	3.1.7.	“A” 2216	I	1.	3º, g)		According to Com. “A” 2932.
3.	3.1.8.	“A” 2216	I	1.	3º, h)		According to Com. “A” 2932.
3.	3.1.9.	“A” 2216	I	1.	3º, i)		According to Com. “A” 2932.
3.	3.1.10.	“A” 2932	único	3.1.11.			According to Com. “A” 3104.
3.	3.1.11.	“A” 2932	único	3.1.12.			According to Com “A” 3918.
3.	3.1.12.	“A” 2932	único	3.1.13.
3.	3.1.13.	“A” 2932	único	3.1.14.
3.	3.1.14.	“A” 2419	1.	1º, ii)			According to Com. “A” 2932, “A” 3314 and “A” According to Com “A” 3918.
3.	3.1.15.	“A” 2932	único	3.1.18.			According to Com “A” According to Com “A” 3918.
3.	3.1.16.	“A” 2932	único	3.1.19.			According to Com. “A” 3141 and “A” According to Com “A” 3918.
3.	3.1.17.	“A” 3114	2.
3.	3.1.18.	“A” 3259	2.				According to Com. “A” 3314.
3.	3.1.18.1.	“A” 3259	2				According to Com. “A” 3314 and “A” 3918.
3.	3.1.18.2.	“A” 3259	2				According to Com. “A” 3314 and “A” 3918.
3.	3.1.19.	“A” 3314
3.	3.1.20.	“A” 3918	5°
3.	3.2.	“A” 2216	II	5º			According to Com “A” 3918.
4.		“A” 3918.

Lineage: Amended

Timeline