Circular LISOL 1 - 262. Minimum Liquidity Requirements. Submission of Compliance Programs

1999 - Year of Exportation

CENTRAL BANK OF THE ARGENTINE REPUBLIC __________________________________________________________________ COMMUNICATION "A" 2991 I 20/09/99 __________________________________________________________________ TO FINANCIAL ENTITIES:
Ref.: Circular
LISOL 1 - 262.
Minimum liquidity requirements. Submission of compliance programs

We address you to inform you that this Institution adopted the following resolution:

"- Replace point 3.2. of the rules on minimum liquidity requirements with the following:

"3.2. Compliance Programs.
3.2.1. Triggering Situations.
3.2.1.1. Integration defects, including
for these purposes the margin carried forward to the next month, in the average position that exceed 20% of said minimum adjusted liquidity requirement, for two consecutive months or four alternating months within a one-year term.

3.2.1.2. Integration defects, regardless
of their magnitude, computed in the manner mentioned in point 3.2.1.1., regarding which the entity pays charges, that are recorded for three consecutive months or four alternating months within a one-year term.

This applies as long as the triggering situation provided for in point 3.2.1.1. is not configured.

The submission of the compliance program must be made within 20 calendar days following the close of the period in which any of the situations provided for above is registered."

Attached are the sheets that correspond to incorporate into the ordered text of the rules on minimum liquidity requirements in place of those previously provided.

We salute you very respectfully.

CENTRAL BANK OF THE ARGENTINE REPUBLIC Juan Carlos Isi Alfredo A. Besio Deputy Manager of Regulatory Rules Manager of Standards for Regime Financial Entities

ANNEX: 3 sheets

MINIMUM LIQUIDITY REQUIREMENTS B.C.R.A. Section 3. Non-compliance. c: amount of the charge. D: deficiency subject to charge, expressed in numerals. TNA: annual nominal rate applicable to non-compliance, as a percentage. To determine the interest on charges not paid in time and form, the following expression will be applied:
i = [(1 + EAR)^(n/365) - 1] * 100 where i: interest rate corresponding to the delinquency period, as a percentage, with two decimals. EAR: effective annual rate during the delinquency period, as a unit. n: number of calendar days between the due date fixed for the effectiveness and the day prior to the presentation of the relevant debit note for the current account opened at the Central Bank For the rounding of the magnitudes of "c" and "i", the values will be incremented by one unit when the third digit of the fractions is equal to or greater than 5, discarding these latter if they result less.

3.2. Compliance Programs.
3.2.1. Triggering Situations.
3.2.1.1. Integration defects, including for these purposes the margin
carried forward to the next month, in the average position that exceed 20% of said minimum adjusted liquidity requirement, for two consecutive months or four alternating months within a

Version: 4th Communication "A" 2991 Validity:
20.09.99

MINIMUM LIQUIDITY REQUIREMENTS B.C.R.A. Section 3. Non-compliance.
3.2.1.2. Integration defects, regardless of their magnitude,
computed in the manner mentioned in point 3.2.1.1., regarding which the entity pays charges, that are recorded for three consecutive months or four alternating months within a one-year term. This applies as long as the triggering situation provided for in point 3.2.1.1. is not configured. The submission of the compliance program must be made within 20 calendar days following the close of the period in which any of the situations provided for above is registered.

3.3. Regularization and Sanitization Plans.
The requirement to submit a regularization and sanitization plan, upon determining that liquidity is affected by the recorded defects, will have the following consequences.

3.3.1. Institutional Aspects.
It shall constitute an impediment for:
i) Transformation of financial entities. ii) Installation of subsidiaries in the country and abroad. iii) Increases in participation in financial entities in the country and abroad. iv) Installation of representation offices abroad.

3.3.2. Limitation on Deposit Growth
From the first day of the month following the request for submission of the plan, the amount of deposits in pesos, in foreign currency and in securities, may not exceed the level that in monthly average daily balances had reached during the previous period. The lifting of that restriction will be subject to the resolution that is adopted regarding the submitted plan.

Version: 3rd Communication "A" 2991 Validity:
20.09.99

ORDERED TEXT SOURCE NORM
2. 2.1.12. "A" 2422 single 3.1.7. According to Comm. "A" 2648.
2. 2.2. "A" 2422 single 3. 1st and 2nd According to Comm. "A" 2663,
2833 and 2915.
2. 2.3. "A" 2422 single 3.2. According to Comm. "A" 2705.
except ii) "A" 2817 3.
2. 2.4. "A" 2610 I I.1. 3rd
3. 3.1.1. "A" 2422 single 5. According to Comm. "A" 2490,
modified by the Comm.
"A" 2833 and 2915.
3. 3.1.2. a
3.1.4.
"A" 2422 single 5. According to Comm. "A" 2490.
3. 3.1.5. "A" 2422 single 5. According to Comm. "A" 2490.
"B" 5159
3. 3.2. "A" 2895 According to Comm. "A" 2991.
3. 3.3. "A" 2833 2. According to Comm. "A" 2895.
4. 4.1. Explicit criterion.
5. "A" 2422 single 6. According to Comm. "A" 2490, with
interpretative clarification.
6. 6.1. "A" 2422 single 3.3. According to Comm. "A" 2705 and
2694.
6. 6.2. "A" 2422 single 8.
6. 6.3. "A" 2422 single 9. According to Comm. "A" 2648.
7. 7.1. "A" 2951