Circular Letter No. 3265 — Defines Operational Procedures of the Circulating Medium System (CIR) within the Brazilian Payments System

CIRCULAR LETTER NO. 003265

Defines operational procedures of the Circulating Medium System - CIR, within the Brazilian Payments System.

In view of the provisions of Articles 1 and 7 of Circular 3,109, of April 10, 2002 and Article 2 of Circular 3,298, of November 1, 2005, we clarify that circulating medium operations performed through the Circulating Medium System - CIR must observe the procedures defined in this circular letter.

OPERATIONS WITH THE CENTRAL BANK OF BRAZIL

2. Commercial banks, multiple banks with commercial portfolios
   and savings banks may register requests for cash withdrawal and deposit in advance or on the day itself, in which last case, the fulfillment is conditioned on the observance of routines defined by the Circulating Medium Department - Mecir.

3. Cash exchange operations are exempt from registration of
   prior request, with fulfillment conditioned on the availability of the Central Bank of Brazil.

OPERATIONS WITH THE CUSTODIAN

4. Commercial banks, multiple banks with commercial portfolios
   and savings banks must register requests for cash withdrawal for fulfillment by the Custodian, observed that:

I - those made with a minimum advance notice of forty-eight hours are guaranteed fulfillment by the Custodian; and II - those registered with a period of less than forty-eight hours depend on confirmation by the Custodian.

5. Requests for deposit and cash exchange are not
   subject to the establishment of a time limit for confirmation.

6. The Custodian may cancel confirmed withdrawal requests due to the occurrence of unforeseen events or force majeure that prevent operations.

7. Commercial banks, multiple banks with commercial portfolios
   and savings banks may cancel unexecuted requests, observed the provisions of item 10.

8. The Custodian may establish internal routines necessary for the
   execution of services to serve the banking network, related to the custody of cash by the Central Bank of Brazil.

9. The maximum percentage of remuneration, referred to in art. 2 of
   Circular 3,298, of November 1, 2005, to be applied to each confirmed withdrawal request and to each request for deposit or cash exchange executed in the network of dependencies of the authorized custodian to perform the custody service, valid for the entire national territory, will be 0.15% (fifteen hundredths percent).

10. Remuneration will not be due when:
    I - the custodian cancels a confirmed withdrawal request due to the occurrence of unforeseen events or force majeure that prevents the operation; II - the financial institution cancels a withdrawal request not yet confirmed by the custodian; III - the financial institution cancels a request for deposit or cash exchange; and IV - in exchange operations with unusable or shredded cash.

MOVEMENT IN THE BANKING RESERVES ACCOUNT

11. On the date scheduled for the execution of cash withdrawal, at
    the opening of the Reserve Transfer System - STR, the transfer to a transit account titled by the requesting financial institution will be processed, via debit in its Banking Reserves account at the Central Bank of Brazil:

I - the value corresponding to the withdrawal request; and II - the value of the remuneration, with the percentage described in item 9, when it concerns movement with the Custodian.

12. The values transferred in the manner of item 11 will remain in the
    transit account until the Central Bank of Brazil or the Custodian registers the execution of the withdrawal operation.

13. The difference between the maximum remuneration value, transferred
    as cited in item II of item 11, and the value actually collected by the Custodian, will be credited to the Banking Reserves account of the Financial Institution when the withdrawal operation is registered.

14. In the event that the financial institution does not have, at the opening
    of the STR, sufficient fund provision in the Banking Reserves account to cover the entry referred to in item 11, the request will remain pending fulfillment.

15. In case of cancellation of the withdrawal request, the return will be processed to the Banking Reserves account of the financial institution of the value corresponding to the withdrawal request.

16. In the case provided for in item 15, the return to the Banking Reserves account of the financial institution of the value of the
    remuneration will not be processed, when this is due.

17. The credits corresponding to the operations of deposit of
    cash will be made in the Banking Reserves account of the financial institution at the moment of its execution, when they will also occur, the debits of the corresponding remuneration, in the case of deposits or cash exchanges being made with the Custodian.

EXECUTION OF WITHDRAWAL, DEPOSIT OR CASH EXCHANGE

18. The execution of the withdrawal or deposit operation of cash
    depends on the presentation by the financial institution, to the Central Bank of Brazil or to the Custodian, as the case may be, of the corresponding authorization document for cash movement, namely:

I - Withdrawal from Financial Institution - SIF; and II - Deposit from Financial Institution - DIF.

19. The documents referred to in the previous item must be signed by
    whoever, by virtue of the constitutive acts, decisions of the assembly or the board of directors, the grant of mandate or act of competent authority, holds powers to represent the financial institution in court or out of court, or by a duly accredited proxy.

20. Commercial banks, multiple banks with commercial portfolios
    and savings banks must maintain, with Mecir and the Custodian, an updated registry of the signatures of persons accredited for the purposes provided for in item 18.

21. The Central Bank of Brazil and the Custodian may, before
    executing the withdrawal or cash exchange operation, modify the quantitative composition of the values to be withdrawn or received in the exchange, provided that the original financial value is maintained.

22. The minimum unit for withdrawal, deposit or cash exchange at
    the Custodian is the bundle of banknotes, consisting of one hundred units of the same denomination. The minimum unit for withdrawal, deposit or exchange of cash at the Central Bank of Brazil is the thousand banknotes, consisting of one thousand units of the same denomination. In both cases, fractional quantities are not admitted.

CASH VERIFICATION

23. The cash received from financial institutions holding an
    account in Banking Reserves will subsequently be verified by the Central Bank of Brazil or by the Custodian.

24. The differences found, whether less or more, will be, throughout the
    day, communicated to financial institutions through a specific message of the Message Catalog of the Brazilian Payments System, as well as the final daily balance of the differences, which aggregates the occurrences found in operations performed with the Central Bank of Brazil and with the Custodian.

25. In the event that the final daily balance of differences is unfavorable
    to the financial institution, a message requesting regularization will be issued on the date of finding, awaiting the respective debit authorization to be posted to the Banking Reserves account, on the first subsequent business day.

26. In the event that the final daily balance of differences is in favor of
    the financial institution, the respective credit will be posted to the Banking Reserves account of the favored financial institution, on the first subsequent business day.

27. In the absence of debit authorization for regularization of
    differences, as per item 25, there will be compensation of the values due in the next deposit operation executed by the financial institution with the Central Bank of Brazil or the Custodian.

FALSE NATIONAL BANKNOTES AND COINS

28. National banknotes and metal coins identified by the
    financial institutions as counterfeit or of dubious legitimacy must be registered in the CIR using specific messages of the Message Catalog of the Brazilian Payments System.

29. The banknotes and metal coins referred to in item
    28 must be delivered to the various representations of the Circulating Medium Department, according to the configuration of the areas of jurisdiction defined by the Central Bank of Brazil regarding the area of circulating medium, accompanied by the document Receipt of Forwarding - RE.

30. Financial institutions may monitor the progress of each
    banknote and coin sent for analysis, as well as learn about the result of the examination performed and any credits regarding specimens identified as legitimate, by using a specific message of the Message Catalog of the Brazilian Payments System.

31. The documents referred to in items 18 and 29 observe the
    standards contained in the models attached to this circular letter.

32. Circular Letters No. 3,090, of February 28, 2003, No. 3,214, of November 1, 2005 and No. 3,257, of
    December 22, 2006 are revoked.

33. This Circular Letter enters into force on the date of its publication.

Rio de Janeiro, February 13, 2007.

DEPARTMENT OF CIRCULATING MEDIUM

João Sidney de Figueiredo Filho
Chief

Note: The attachments cited in item 31 of this Circular Letter are available at the electronic address http://www.bcb.gov.br, in the link "Legislation and norms/CMN and BC Norms".