Circular LISOL 1-415: Extension of Deadlines for Immobilized Assets, Liquid Own Funds, and Judicial Measures Regarding Foreign Currency Deposits

"2004 - Year of the Argentine Antarctic"
BANCO CENTRAL DE LA REPÚBLICA ARGENTINA
COMMUNICATION "A" 4124 02/04/2004
TO FINANCIAL ENTITIES:
Ref.: Circular
LISOL 1 - 415
Relationship for immobilized assets and other concepts. Liquid own funds. Accounting exposure of the effects generated by judicial measures regarding deposits and other obligations for financial intermediation, originally agreed upon in foreign currency. Extension. ______ We address you to inform you that this Institution has adopted the following resolution:

"- Extend until 12.31.04 the validity of what is provided in point 1. of the resolution disseminated by Communication "A" 3954."

We are sending you the sheets that, in replacement of those previously provided, must be incorporated into the ordered text of the regulations on "Relationship for immobilized assets and other concepts".

We greet you very respectfully.
BANCO CENTRAL DE LA REPUBLICA ARGENTINA
Alfredo A. Besio José Rutman
Manager of Standards Issuance Principal Manager of Standards

ANNEX

RELATIONSHIP FOR IMMobilized ASSETS
B.C.R.A. AND OTHER CONCEPTS
Section 7. Transitional Provisions.
Version: 5th COMMUNICATION "A" 4124
Validity:
02/04/2004

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 the social capital, without exceeding 20% of the votes, with respect to companies that do not provide complementary services, according to the conditions established in Section 9. of the regulations on "Credit Graduation", must not exceed 40% of the computable patrimonial responsibility of the financial entity of the month in question, during the maximum periods established for the liquidation of holdings, in points 9.1.1. and 9.1.2. of the cited Section 9. This without prejudice to its computation as established in point 1.1. of Section 1. for the purpose of determining compliance with 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 5. Once the periods for the liquidation of holdings have elapsed, the excesses over the percentage of holding admitted referred to in point 3.2. of Section 3. of the regulations on "Credit Graduation", must be deducted from the computable patrimonial responsibility.

7.2. Differences resulting from compliance with judicial measures.
Until 12.31.04, the activated amount of the differences resulting from compliance with judicial measures originating in cases where the current applicable regulations regarding deposits and other obligations for financial intermediation in the financial system, originally agreed upon in foreign currency within the framework of what is provided by Law 25.561, Decree 214/02 and complementary provisions, is questioned, will not be computed for the purpose of determining compliance with the maximum limit contemplated in Section 4.

7.3. Assets in defense or in payment of credits.
Until 12.31.04, assets taken in defense or in payment of credits incorporated into the patrimony of the entity until 3.31.03 will not be computed.

7.4. Defaults.
Until 12.31.04, the amount of the excess that this relationship registers, without exceeding that verified on 12.31.03, minus the assets taken in defense or in payment of credits as established in the preceding point, will not be computed to calculate the limitations established in point 2.3. of Section 2. of the regulations on "Defaults of minimum capitals and technical relationships. Applicable criteria." The limitations established in point 2.3. of Section 2. of the regulations on "Defaults of minimum capitals and technical relationships. Applicable criteria." will not be applied, until 12.31.04, for the amount of the excess resulting from the calculation of the "Relationship for immobilized assets and other concepts" registered on 12.31.03, minus the assets taken in defense or in payment of credits as established in the preceding point. The amount of the excess resulting from the calculation of the "Relationship for immobilized assets and other concepts" registered on 12.31.03, minus the assets taken in defense or in payment of credits, as established in point 7.3. of this regulation, will not generate increases in the minimum capital requirement for credit risk until 12.31.04.

RELATIONSHIP FOR IMMobilized ASSETS
AND OTHER CONCEPTS
ORDERED TEXT ORIGINATING NORM
Section Point Paragraph Com. Cap./ Point Paragraph
Observations
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.
7.1. "A" 3918 6. According to Com."A" 4093 (point. 2.).
7.
7.2. "A" 3954 1. According to Com. "A" 4020 and
Com. "A" 4124.
7.3. "A" 4093 7.
7.4. "A" 4093 8.