Carta-Circular nº 1.472, de 16.09.86.

CARTA-CIRCULAR Nº 1.472

In accordance with the provisions of Resolution No. 1,054, of October 30, 1985, Circulars No. 900, of November 30, 1984, and No. 968, of October 31, 1985, and Decree-Law No. 2,284, of March 10, 1986, sections 13-11-1 and 16-10- of the Manual of Norms and Instructions (MNI) are amended.

2. Furthermore, aiming to resolve doubts regarding the interpretation of the norms embodied in MNI 16-10-3-8, we communicate that clause "b" of the aforementioned item shall now be in effect with the wording of clause "b" of item IV of Circular No. 29, of March 28, 1966, hereby revoking Carta-Circular No. 1,131, of November 26, 1984.

3. Consequently, the necessary sheets for updating the aforementioned Manual are attached.

Brasília (DF), September 16, 1986.

DEPARTMENT OF ORGANIZATION
AND BANKING AUTHORIZATIONS

Sebastião Honorato de Araújo
SUBSTITUTE HEAD

This text does not replace the published version in the DOU and Sisbacen.

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MANUAL OF NORMS AND INSTRUCTIONS

Development Banks – 13

Index of Chapters and Sections

Update MNI n. 937, of July 8, 1986

1 - CHARACTERISTICS AND CONSTITUTION
1 - Formation
2 - (to be used)
3 - Capital Increase
4 - General Rules
Documents
1 - Capital Composition

4 - ADMINISTRATION
Documents
1 - Information on Act of Election or Appointment

5 - DEPENDENCIES
1 - General Provisions
2 - Security Requirements
3 - Operating Hours

6 - OPERATIONAL NORMS
1 - Preliminary Provisions
2 - Active Operations
3 - Passive Operations
4 - Limits
5 - Fixed Assets
6 - Non-Self-Use Goods
7 - (to be used)
8 - Credits in Liquidation
9 - Banking Secrecy
10 - (reserved)
11 - Availability
12 - Mandatory Deposits
Documents
1 - Statement of Required Balance - Time Deposits 2 - Debt Limit

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MANUAL OF NORMS AND INSTRUCTIONS

Development Banks – 13

Index of Chapters and Sections

Update MNI n. 937, of July 8, 1986

3 - Statement of Fixed Asset Index

7 - ACTIVE AND PASSIVE OPERATIONS
1 - Loans and Financing
2 - Loans to States, Municipalities, and Their Autonomous Agencies 3 - Investments 4 - Leasing 5 - Re-lending of External Loans 6 - Special Obligations - Refinancing and Re-lending 7 - Time Deposits 8 - (to be used) 9 - Export Production Financing Program 10 - (to be used) 11 - Issuance or Endorsement of Mortgage Debentures 12 - Operations with EXIMBANK resources Documents 1 - Budget and Debt Position 2 to 5 (to be used) 6 - Report on Re-lending of External Resources

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MANUAL OF NORMS AND INSTRUCTIONS

Development Banks – 13

Index of Chapters and Sections

Update MNI n. 937, of July 8, 1986

8 - OPERATIONAL INSTRUMENTS
1 - Bank Deposit Certificate
2 - Mortgage Debenture
Documents
1 - Model of Full Mortgage Debenture
2 - Model of Fractional Mortgage Debenture
3 - Model of Endorsement-Cession
4 - Model of Endorsement-Mandate

9 - GENERAL ACCOUNTING AND AUDIT NORMS
1 - Preliminary Provisions
2 - (reserved)
3 - External Audit

10 - PROCESS INSTRUCTIONS
1 - Preliminary Provisions
2 - Authorization to Operate
3 - Election of Members of Statutory Bodies
4 - Capital Increase in Current Currency
5 - Capital Increase by Incorporation of Profits and Reserves 6 - Statute Reform 7 - Bank Guarantees 8 - Re-lending of External Loans 9 - Extension of Deadline for Alienation of Non-Self-Use Goods 10 - Lease of Real Estate Occasionally Idle 11 - Relocation of Services Documents 1 - Registration Form - Personal Data 2 - List of Share Subscription - Constitution or Capital Increase 3 - Deposit Receipt for Constitution or Capital Increase

11 - ACCESSORY OPERATIONS
1 - Provision of Guarantees

12 - (to be used)

13 - FINAL PROVISIONS

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MANUAL OF NORMS AND INSTRUCTIONS

Development Banks – 13

Index of Chapters and Sections

Update MNI n. 937, of July 8, 1986

1 - Development Portfolios
2 - Cessation of Activities (to be disclosed)
14 to 19 (to be used)
20 - NATIONAL BANK FOR ECONOMIC AND SOCIAL DEVELOPMENT (BNDES)

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TITLE: DEVELOPMENT BANKS – 13

CHAPTER: Accessory Operations – 11

SECTION: Provision of Guarantees - 1

Update MNI n. 937, of July 8, 1986

1 - The development bank may provide the following types of guarantees, provided they are related to the undertaking object of its action:
a) guarantee of loans in national or foreign currency; b) guarantee in bidding processes (public tenders, price quotations, and invitations); c) guarantee of appeal in tax proceedings; d) guarantee of tax execution; e) joint obligation in the issuance of debentures; f) subscription guarantees.

2 - The operations mentioned in the previous item must be backed by counter-guarantees that ensure full liquidation of the principal and financial charges.

3 - Guarantees in bidding processes, appeals in tax proceedings, and tax executions can only be contracted with companies that are clients of the bank.

4 - It is not permitted for the development bank to grant suretyship or aval on credit instruments whose purpose is to facilitate loan operations between individuals or non-financial legal entities, nor to assume any other form of joint obligation or intermediation in operations of this nature. (Circ. 900-1)

5 - The detection of the practice contained in the previous item will be considered a serious offense by the Central Bank (*), entailing for the offender the penalties provided for in art. 44 of Law No. 4,595, of December 31, 1964. (Circ. 900-2)

6 - It is forbidden for the development bank to provide interbank guarantees, unless towards another financial development institution.

7 - Financial development institutions are considered as:
a) National Bank for Economic and Social Development (BNDES); b) state development banks; c) private investment banks; d) mixed banks controlled by the Federal Government and aimed at regional development (Amazonia S.A. Bank, Brazil Northeast Bank S.A.); e) federal nature funds supporting economic development (Special Industrial Financing Agency - FINAME, Small and Medium Enterprise Financing Fund - FIPEME, Economic Rearrangement Fund - FRE, Industrial Modernization and Reorganization Fund - FRI); f) other federal institutions that, although not typical of development, participate in the subsystem in promoting economic or social development (Brazil Bank S.A., National Housing Bank, Federal Savings Bank).

8 - The Central Bank must be heard previously in each case, for the granting of guarantees on external financing, conditioning the authorization to the fact that the undertaking to be guaranteed:
a) is within the context of activities financeable by the development bank itself; b) is backed by a study and project previously examined by the development bank in light of what is contained in this title, in items 13-6-2-3 and 13-6-2-4.

9 - The development bank may grant suretyships, for guaranteeing the filing of tax appeals and for guaranteeing tax execution, for an indefinite term, in which cases it is incumbent upon it, at least once per semester, to request from the favored Tax Department, competent instances or courts clarifications on the progress of the process.

10 - The suretyship granted for the purpose of guaranteeing tax execution must contain, necessarily and expressly:
a) clause of solidarity, with waiver of the benefit of order; b) declaration that the extent of the guarantee will cover the value of the original debt, interest (*) and other due charges as indicated in the Active Debt Certificate. (Res. 724-IIb; Dec.-Law 2,284/86 - art. 7º.)

11 - In cases of granting guarantees in foreign currencies (operations linked to foreign trade (*)), it is mandatory to include a contractual clause providing for the update of the value in national currency of the received counter-guarantees. (Res. 394 - art. 20-annex)

12 - The update of the value of the counter-guarantees, provided for in the previous item, must be automatic and concomitant with the update, if any, of the value of the suretyship or aval granted, as a result of any implicit or explicit condition in the mechanics of the contracted operation.

13 - The granting of aval or suretyship, on instruments or contracts of any nature, of responsibility of states, municipalities, and their respective autonomous agencies, is subject to prior approval by the National Monetary Council.

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MANUAL OF NORMS AND INSTRUCTIONS

Commercial Banks - 16

Index of Chapters and Sections

Update MNI n. 937, of July 8, 1986

1 - CHARACTERISTICS AND CONSTITUTION
2 - OBJECTIVE
3 - CAPITAL
1 - Formation
2 - (to be used)
3 - Capital Increase
4 - Minimum Levels
5 - General Rules
Documents
1 - Capital Composition’

4 - ADMINISTRATION
Documents
1 - Information on Act of Election or Appointment

5 - DEPENDENCIES
1 - Security Requirements
2 - Branches
3 - Special Service Provision Post (PEPS)
4 - Manual Exchange Post
5 - Transitional Dependencies – “stands”
6 - Operating Hours
7 - Advanced Cashiers (CAVS)
8 - Advanced Rural Credit Post
9 - Dependencies Abroad

6 - EXCHANGE PORTFOLIO
1 - Preliminary Provisions

7 - OPERATIONAL NORMS
1 - Preliminary Provisions
2 - Active Operations
3 - Passive Operations
4 - Accessory Operations
5 - Service Provision
6 - Bank Tariffs
7 - Limits

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MANUAL OF NORMS AND INSTRUCTIONS

Commercial Banks - 16

Index of Chapters and Sections

Update MNI n. 937, of July 8, 1986

8 - Guarantees
9 - Fixed Assets
10 - Equity Participations with Own Resources
11 - Non-Self-Use Goods
12 - Assignment and Acquisition of Credits
13 - Credits in Liquidation
14 - Banking Secrecy
15 - (reserved)
16 - Availability
Documents
1 - Statement of Fixed Asset Index (Commercial Bank) 2 - Debt Limit

8 - OPERATIONAL INSTRUMENTS
1 - Checks
2 - Collection Block
3 - Credit Document - DCC
Documents
1 - Standard Check Model
2 - Collection Block
3 - Credit Document - DCC

9 - ACTIVE AND PASSIVE OPERATIONS
1 - Priority Applications
2 - Overdraft Loans
3 - Loans to Microenterprises and Small and Medium Enterprises 4 - Loans to States, Municipalities, and Indirect Administration Entities - Federal, State, and Municipal 5 - Real Estate Credit 6 - Rural Credit 7 - Advances to Depositors 8 - External Loans 9 - Re-lending of External Loans 10 - Discounts 11 - Investments in Securities 12 - Demand Deposits 13 - Time Deposits 14 - Notice Deposits 15 - Deposits of Residents Abroad Documents

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MANUAL OF NORMS AND INSTRUCTIONS

Commercial Banks - 16

Index of Chapters and Sections

Update MNI n. 937, of July 8, 1986

1 - Statement of Working Capital Financing Operations for Microenterprises and Small and Medium Enterprises 2 - Service Provision Agreement 3 - Report on Re-lending of External Resources 4 - Characteristics of External Loan Operation 5 - Budget and Debt Position

10 - ACCESSORY OPERATIONS
1 - Payment Orders
2 - Collection
3 - Provision of Guarantees
4 - Collection and Delivery of Cash to Home
5 - Sanitation of the Circulating Medium
6 - Intermediation in the Purchase of Treasury Bills 7 - Deposit of Titles and Values in Custody 8 - Receipt of Compensable Collection 9 - Transfer of Credits in General Documents 1 - Straps and Labels - Specifications 2 - Duplicate - Mercantile Sale 3 - Duplicate - Service Provision 4 - Duplicate - Mercantile Sale with Installment Payment 5 - Duplicate - Service Provision with Installment Payment 6 - Duplicate - Mercantile Sale with Installment Payment 7 - Duplicate - Service Provision with Installment Payment

11 - SERVICE PROVISION
1 - Fiduciary Agent -
2 - (to be used)
3 - Collection of Federal Taxes
4 - Receipt on Behalf of Third Parties
5 - Receipt of Insurance Premiums
6 - Collection and Payments for the National System of Social Security and Assistance - SINPAS 7 - Collection and Payments for FGTS 8 - Collection and Payments for PIS 9 - (to be used) 10 - Placement of Securities

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TITLE: COMMERCIAL BANKS – 16

CHAPTER: Accessory Operations – 10

SECTION: Provision of Guarantees - 3

Update MNI n. 937, of July 8, 1986

1 - The commercial bank may grant suretyships since the values in national currency and their maturity are perfectly characterized.

2 - The bank granting the suretyship must require from the surety counter-guarantees compatible with the values and maturities of the guarantees granted.

3 - The value of contracted suretyships is included in the debt limits referred to in section 16-7-7.

4 - The commercial bank may grant suretyships for guaranteeing the filing of tax appeals and for guaranteeing tax execution, in which cases it must observe:
a) the conditions mentioned in items 2, 3, and 16-7-7-11; b) the adjustment with the surety of certain responsibility for each suretyship; c) the value of each suretyship cannot be lower than that corresponding to the respective claim before the favored Tax Department; d) the suretyship contract cannot contain a monetary correction clause for the fiscal debt, - except if it is linked to the variation index of Treasury National Obligations (OTN) and for a term equal to or greater than 12 (twelve) months. (Circ. 42-11; rec.-Law 2,284/86-art. 7o.)

5 - The commercial bank may grant suretyships, for guaranteeing the filing of tax appeals and for guaranteeing tax execution, for an indefinite term, in which cases it is incumbent upon it, at least once per semester, to request from the favored Tax Department, competent instances or courts clarifications on the progress of the process.

6 - The suretyship granted for the purpose of guaranteeing tax execution must contain, necessarily and expressly:
a) clause of solidarity, with waiver of the benefit of order; b) declaration that the extent of the guarantee will cover the value of the original debt, interest and (*) other due charges as indicated in the Active Debt Certificate. (Res. 724-II-b); Dec.-Law 2,284/86-art. 7º.)

7 - Observing the provision in item 4, the commercial bank may also grant suretyship for an indefinite term, to produce effects before official bodies or entities controlled by them, destined to ensure compliance, with them, of obligations assumed by the surety such as qualification in bids, contracting and execution of public works, as well as other commitments whose time limit determination is impracticable.

8 - The following are forbidden to the commercial bank:
a) the assumption of responsibilities by aval or granting of acceptance;

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TITLE: COMMERCIAL BANKS – 16

CHAPTER: Accessory Operations – 10

SECTION: Provision of Guarantees - 3

Update MNI n. 937, of July 8, 1986

b) the granting of suretyship or any other guarantee that could, directly or indirectly, enable the beneficiaries to obtain loans in general or withdraw resources from the public; (Circ. 29-XV-b) c) the granting of aval or suretyship in foreign currency or involving risk of exchange rate variation, except when it concerns operations linked to foreign trade; d) the provision of suretyship to its directors and members of advisory or () administrative councils, auditors and similar, as well as to their respective spouses; (Res. 1,054-I-a) e) the provision of suretyship to relatives, up to the 2nd (second) degree, of the persons referred to in () the previous clause; (Res. 1,054-I-b) f) the provision of suretyship to individuals or legal entities that participate in its capital, () with more than 10% (ten percent), unless specific authorization of the Central Bank in this case, when it concerns operations backed by commercial effects resulting from purchase and sale transactions or pledge of goods, within limits that will be fixed by the National Monetary Council, in a general manner; (Res. 1,054-I-c) g) the provision of suretyship to legal entities whose capital is participated in by more than 10%,() (ten percent); (Res. 1,054-I-d) h) the provision of suretyship to legal entities whose capital is participated in by more than 10% (*) (ten percent) any of the directors and administrators of the bank itself, as well as their spouses and respective relatives, up to the 2nd (second) degree. (Res. 1,054-1-e)

9 - The provision in clause “g” of the previous item does not apply:
a) to public financial institutions; (Res. 1,054-II) b) to the provision of guarantee to leasing companies. (Res. 1,054-IV)

10 - The suretyships possibly granted to the persons mentioned in clauses “d” to “h” of item 8, (*) on a date prior to October 31, 1955, may be subject to renewal only with prior authorization of the Central Bank, upon presentation of justification supported by a registration form and description of the counter-guarantees presented by the beneficiary. (Circ. 968-I-b)

11 - The requests referred to in the previous item must be addressed to the Department of (*) Organization and Banking Authorizations (DEORB). (Circ.968-2)

12 - It is not permitted for the commercial bank to grant suretyship or aval on credit instruments (*) whose purpose is to facilitate loan operations between individuals or non-financial legal entities, nor to assume any other form of joint obligation or intermediation in operations of this nature. (Circ. 900-1)

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TITLE: COMMERCIAL BANKS – 16

CHAPTER: Accessory Operations – 10

SECTION: Provision of Guarantees - 3

Update MNI n. 937, of July 8, 1986

13 - The detection of the practice contained in the previous item will be considered a serious offense by the bank (*) Central, entailing for the offender the penalties provided for in art. 44 of Law No. 4,595, of December 31, 1964. (Circ. 900-2)

14 - The granting of aval or (*) suretyship by a Commercial Bank on instruments or contracts of any nature, of responsibility of states, municipalities, and their respective autarchic entities, is subject to prior approval by the National Monetary Council. (Res. 1,054-III; Res. 346-VI)

15 - In permitted cases of granting guarantees in foreign currencies (operations linked to foreign trade (*)), it is mandatory to include a contractual clause providing for the update of the value in national currency of the received counter-guarantees. (Circ. 29-III)

16 - The update of the value of the counter-guarantees, provided for in the previous item, must be automatic and concomitant with the update, if any, of the value of the suretyship or aval granted, as a result of any implicit or explicit condition in the mechanics of the contracted operation.

17 - In the granting of guarantees linked to real estate credit, the commercial bank must pay attention to the provision in items 16-9-5-6 and 16-9-5-7.