Circular LISOL 1-548 and CONAU 1-967: Minimum Capital of Financial Entities, Consolidated Supervision, and Related Norms

"2012 – Year of Homage to Dr. D. Manuel Belgrano" COMMUNICATION “A” 5282 14/02/2012 TO FINANCIAL ENTITIES:
Ref.: Circular
LISOL 1 - 548
CONAU 1 - 967
Minimum capital of financial entities.
Consolidated supervision. Minimum capital non-compliance and technical ratios.
Applicable criteria. Cooperative credit unions (Law 26.173). Distribution of results. Classification of debtors.
Update
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We address you to inform you that, in accordance with the provisions set forth in Resolution made known through Communication “A” 5272, we are sending you attached the sheets that, in replacement of those previously provided, must replace the texts in the ordered norms on “Minimum capital of financial entities”, “Consolidated supervision”, “Minimum capital non-compliance and technical ratios. Applicable criteria”, “Cooperative credit unions (Law 26.173)” and “Distribution of results”. Likewise, by virtue of the provisions made known through Communication “A” 5275, we take this opportunity to accompany the pertinent updated sheet of the index for the norms on “Classification of debtors”. Finally, we remind you that on this Institution's website www.bcra.gov.ar, by accessing “regulations” (“ordered texts”), you will find the modifications made with texts highlighted in special characters (strikethrough and bold). We salute you attentively. CENTRAL BANK OF THE ARGENTINE REPUBLIC Matías A. Gutiérrez Girault Alfredo A. Besio Manager of Emission of Regulations General Deputy Manager of Regulations
ANNEX

B.C.R.A.
ORDERED TEXT OF THE NORMS ON
“MINIMUM CAPITAL OF FINANCIAL ENTITIES”
-IndexSection 7. Minimum capital for operational risk.
7.1. Requirement.
7.2. New entities.
Section 8. Computable equity.
8.1. Determination.
8.2. Computable concepts.
8.3. Capital contributions.
8.4. Procedure.
Section 9. Bases for compliance with the norms.
9.1. Individual base.
9.2. Consolidated base.
Section 10. Transitional provisions.
Correlation table.
Version: 14th COMMUNICATION “A” 5282
Validity:
01/02/2012

MINIMUM CAPITAL OF FINANCIAL ENTITIES
B.C.R.A.
Section 1. Minimum capital.
1.1. Requirement.
The minimum capital requirement that financial entities must have integrated by the last day of each month shall be equivalent to the highest value resulting from the comparison between the basic requirement and the sum of those determined by credit risk, interest rate risk, market risk -VaRp requirement for the positions of the last day of the month for the included assets- and operational risk.
1.2. Increase in requirement for custody and/or registry agent functions.
1.2.1. Custody function of the titles representing the investments of the Sustainability Guarantee Fund (FGS) of the Argentine Integrated Pension System.
Commercial banks must register an excess of computable equity relative to the minimum capital requirement equivalent to 0.25% of the amount of the securities in custody, which must be maintained invested in national public bonds or in monetary regulation instruments of the Central Bank of the Argentine Republic or other destinations authorized by this Institution, provided they have usual quotation in the stock exchanges and markets where they are traded, and be pledged in favor of said Institution to respond to eventual non-compliance. The admitted securities or other instruments pledged must be deposited in a special account opened for this purpose at Caja de Valores S.A. in the name of the entity and at the order of the Central Bank of the Argentine Republic. The amount to be invested in securities or other admitted instruments must be determined based on the balances at the close of each month, and the deposit must be made in the aforementioned account within the next 72 business hours, informing the Credit Management of the Central Bank within the same term under oath.
1.2.2. Registry agent function for written mortgage letters.
Commercial banks must observe the norms contained in point 1.2.1., with the exception that the 0.25% excess will be calculated on the amount of the written mortgage letters registered, considered at the net value of the effective amortizations.
1.2.3. Performance of both functions.
The determination of the increase in the minimum capital requirement will be made by applying the fixed percentage to the sum of the amounts corresponding to the securities in custody and to the written mortgage letters registered, considered at the net value of the effective amortizations.
1.3. Integration.
For the purpose of determining compliance with the minimum capital requirement, the integration to be considered will be the computable equity.
Version: 7th COMMUNICATION “A” 5282
Validity:
01/02/2012

MINIMUM CAPITAL OF FINANCIAL ENTITIES
B.C.R.A.
Section 6. Minimum capital for market risk.
6.5.8. Interest rate (r).
For the calculation of the value at risk of derivatives on national assets, the interest rate for loans to first-line companies for a 30-day term (or in its absence, the implicit interest rate arising from the auctions of Letters of the Central Bank of the Argentine Republic for that term or similar) in pesos or in US dollars, depending on whether the derivatives are on assets in pesos or in US dollars, corresponding to the fifth business day prior to the day of calculation or the last auction, according to the information provided by the Central Bank of the Argentine Republic, will be used. In the case of derivatives on foreign assets, the interest rate for the one-year bond of the national government of the country in whose currency the asset is expressed will be used.
6.5.9. Valuation of options.
For the calculation of the coefficients linked to options (delta, gamma, vega), the Black-Scholes option valuation model will be accepted. In it, the volatility published by the Central Bank of the Argentine Republic will be used as data, when pertinent. In the case of exotic options, or when the entity possesses an alternative valuation method, its use must be approved by the Superintendence of Financial and Currency Entities.
6.5.10. Derivatives not contemplated.
In the case of derivative contracts not expressly contemplated, the treatment to be used to determine the value at risk must be consulted with the Superintendence of Financial and Currency Entities.
6.6. Computation.
6.6.1. Capital requirement.
Each month, it will be determined daily considering:
6.6.1.1. the minimum capital requirement established at the end of the previous month (point 1.1. of Section 1., without computing the corresponding to market risk -VaRp requirement for the positions of the last day of the month for the included assets-),
which will remain constant throughout the month, and
6.6.1.2. the VaRp requirement for the daily positions of the included assets.
Version: 4th COMMUNICATION “A” 5282
Validity:
01/02/2012

MINIMUM CAPITAL OF FINANCIAL ENTITIES
B.C.R.A.
Section 6. Minimum capital for market risk.
6.6.2. Capital integration.
Each month, it will be determined daily considering:
6.6.2.1. the computable equity of the last day of the previous month, and
6.6.2.2. off-balance sheet, the daily change in value that occurs in the portfolio of assets included in the calculations of the market risk requirement as a consequence of changes in their market prices, from the last quotation registered at the close of the immediate previous month.
In the event of incorporations (purchases) of assets during the month, only the variation in the value of those assets since their incorporation will be taken into account. In the event of sales of these assets (closing of positions), the resulting loss or gain between the sale price and the last price at which the position was valued must be taken into account.
6.6.3. Daily capital deficiency.
6.6.3.1. Immediate framing.
In the event of a daily integration defect regarding the market risk capital requirement, except for that corresponding to the last day of the month, originating in the computation of the requirement by the sum of the values at risk of the included assets (“VaR p ”), the financial entity must replenish the capital and/or reduce its financial asset positions until it achieves compliance with the established requirement, for which it will have a term of ten business days, counted from the first deficiency.
6.6.3.2. Persistent deficiency.
i) If the defect persists for a term greater than 10 business days, the entities must present a regularization and sanitation plan within the next 5 business days, with the effects indicated in point 1.4.2.1. of Section 1. ii) When it concerns deficiencies determined by the Superintendence of Financial and Currency Entities and to the extent that the deficiency is subsistent according to the last available information, the terms referred to in point 1.4.2.2. item i) of Section 1. for the presentation of the defense and that this Superintendence rules on it will be 5 and 10 business days, respectively, while for the regularization of the non-compliance, in the manner provided in point 6.6.3.1., the entity will observe the term of 10 business days, counted from the date the integration defect becomes final. Upon expiration of that term without the non-compliance having been regularized, what is established in item i) will be observed. Version: 4th COMMUNICATION “A” 5282 Validity:
01/02/2012

MINIMUM CAPITAL OF FINANCIAL ENTITIES
B.C.R.A.
Section 7. Minimum capital for operational risk.
7.1. Requirement.
It will be determined monthly applying the following expression:
CRO = α * Σ (IBt) t=1 to n
Where
CRO: capital requirement for operational risk.
α: 15%. n: number of periods of 12 consecutive months in which the IB is positive, taking into account the last 36 months prior to the month in which the calculation is made. The maximum value of n is 3, overlapping of months in the formation of periods is not admitted. When n is equal to zero (n=0), a requirement equivalent to 10% of the average of the last 36 months -prior to the month to which the determination of the requirement corresponds- of the minimum capital requirement calculated as provided in point 1.1. of Section 1. must be observed. IBt: gross income of periods of 12 consecutive months -provided it is positive-, corresponding to the last 36 months prior to the month in which the calculation is made. IB is defined as the sum of:
i) financial and service income minus financial and service expenses, and ii) diverse profits minus diverse losses.
From the accounting items mentioned in i) and ii) the following concepts will be excluded -included in those items-, as appropriate:

• charges arising from the constitution of provisions, derecognition of provisions constituted in previous years, and credits recovered in the year charged in previous years;
• the result arising from participations in financial entities and companies, to the extent that they are concepts deductible from computable equity;
• extraordinary or irregular concepts -that is, those arising from atypical and exceptional results occurring during the period, of infrequent occurrence in the past and not expected for the future-, including income from the collection of insurance (claim recoveries); and
  Version: 7th COMMUNICATION “A” 5282
  Validity:
  01/02/2012

MINIMUM CAPITAL OF FINANCIAL ENTITIES
B.C.R.A.
Section 7. Minimum capital for operational risk.

• results arising from the sale of items included in Section 2. of the norms on “Valuation of debt instruments of the non-financial public sector and monetary regulation of the Central Bank of the Argentine Republic”.
  7.2. New entities.
  The monthly minimum capital requirement for operational risk corresponding to the first month shall be equivalent to 10% of the sum of the requirements determined by credit, interest rate, and market risks -in this case, for the positions of the last day- of that month. From the second to the thirty-sixth month, the monthly requirement shall be equivalent to 10% of the average of the requirements determined for the months elapsed until the calculation period -inclusive-, resulting from considering the risks mentioned in the preceding paragraph, according to the following expression:
  CRO = (10% / n) * Σ (Crt + VaRR,t + VaRp,t) t=1 to n Where for each month t:
  Crt: capital requirement for credit risk.
  VaRR,t: capital requirement for interest rate risk.
  VaRp,t: capital requirement for market risk for the positions of the last day of month t. n: number of months elapsed until the month of calculation -inclusive- (2 ≤ n ≤ 36). From the thirty-seventh month, the monthly requirement will be calculated in accordance with what is provided in point 7.1. Version: 4th COMMUNICATION “A” 5282 Validity:
  01/02/2012

MINIMUM CAPITAL OF FINANCIAL ENTITIES
B.C.R.A.
Section 8. Computable equity.
8.1. Determination.
The computable equity of financial entities, for the purposes of the regulatory norms of the prescriptions of articles 30 and 32 of the Financial Entities Law and other provisions of the Central Bank of the Argentine Republic that refer to this concept, will arise from the following expression:
RPC = PNb + PNc – Cd
Where
RPC: computable equity.
PNb: basic net worth.
PNc: complementary net worth, not exceeding 100% of PNb.
Cd: concepts that must be deducted.
8.2. Computable concepts.
8.2.1. Basic net worth.
It comprises the following items of net worth:
8.2.1.1. Social capital.
8.2.1.2. Non-capitalized contributions.
8.2.1.3. Adjustments to equity.
8.2.1.4. Profit reserves.
8.2.1.5. Unassigned results. The positive result of the last closed fiscal year will be computed once the auditor's report is available.
8.2.1.6. Debt-representative instruments, issued under the conditions established in point 8.2.2.
Likewise, off-balance sheet amounts of the respective reserve funds that are effectively applied to the payment of financial services, in case of insufficiency of distributable results according to the established procedure, will be computed, provided their maturities operate before 12.31.12. From that date, the remaining reserve fund will also be computed. The total of this concept will be subject to not exceeding, on the basic net worth -points 8.2.1.1. to 8.2.1.7.-, the percentages detailed below:
Version: 3rd COMMUNICATION “A” 5282
Validity:
01/02/2012

MINIMUM CAPITAL OF FINANCIAL ENTITIES
B.C.R.A.
Section 8. Computable equity.
i) 30% until 12.31.08, ii) 25% until 12.31.10, iii) 20% until 12.31.12 and iv) 15% from 1.1.13.
Additionally, in the case of consolidation, it includes:
8.2.1.7. Third-party participation.
The balances in favor from the application of the minimum presumptive income tax -net of provisions for devaluation risk- that exceed 10% of the amount resulting from the sum of the concepts contained in points 8.2.1.1. to 8.2.1.7. or 10% of the computable equity corresponding to the previous month, whichever is lower, will be deducted.
8.2.2. Debt-representative instruments.
For their computation in computable equity, they must be fully subscribed and integrated and observe the following requirements:
8.2.2.1. Conditions of issuance that must be included in the issuance prospectuses that are made publicly known.
i) They must have prior authorization from the shareholders' assembly or equivalent corporate body, at the time of their issuance. ii) They must be denominated in pesos or in foreign currency. iii) The payment of the remuneration, in no case, may exceed the positive unassigned results audited based on the accounting statements corresponding to the last annual fiscal year with an external auditor's report with closure immediately prior to the maturity of each financial service, calculated according to the specific procedure for the payment of financial services provided in Section 3. of the norms on “Distribution of results”, which must be allocated to the constitution -according to said methodology- of a reserve destined for this purpose in pesos, regardless of the currency in which the instrument was issued. The reserve destined for the payment of the financial services whose maturity operates in the period from the date of issuance of the debt instrument up to the day prior to the date of the second shareholders' assembly or equivalent corporate body subsequent to the issuance, must be constituted with positive unassigned results audited based on the accounting statements whose consideration corresponds to the first shareholders' assembly or equivalent corporate body, that is held subsequent to the issuance of the instrument. Version: 1st COMMUNICATION “A” 5282 Validity:
01/02/2012

Section 8. Computable equity.
If the remuneration is subject to a fixed rate, the reserve will contemplate the yields to be paid.
If it is subject to a variable rate or to exchange rate variations, the reserve must be constituted applying the rate or exchange rate in effect at the time of its constitution, and may be higher for the purpose of considering the eventual increase in projected services. Financial services will accrue monthly. The total accrued amount may not exceed the aforementioned reserve, except in the following cases:

• if they are instruments that contemplate the accumulation of unpaid services.
• if the remuneration is subject to a variable rate or to exchange rate variations and the reserve proves insufficient due to the observed increase compared to the projections made, the insufficiency of the constituted reserve may be remedied from the results of the fiscal year to which the included services correspond. This to the extent that there are positive unassigned results audited remaining from the immediate previous annual fiscal year and prior approval of the Superintendence of Financial and Currency Entities which will evaluate the correct application of the procedure established in the matter.
• if there is a sufficient reserve fund in the terms of item xiii).
  iv) They must have a term of no less than 30 years, with full amortization at maturity. v) The payments of financial services may not be made with a frequency lower than quarterly. vi) The redemption of the obligation, if provided for, may only be made at the option of the issuer provided that:
  a) 5 years have elapsed since its integration, b) it has authorization from the Superintendence of Financial and Currency Entities prior to the exercise of the option, and c) it is replaced by one or more of the concepts included in points 8.2.1.1. or 8.2.1.6. Version: 1st COMMUNICATION “A” 5282 Validity:
  01/02/2012

Section 8. Computable equity.
vii) An increase in the rate to be paid will be admitted only once during the life of the instrument and subsequent to 10 years from its integration. viii) They must not contain clauses by which the obligation is assured or covered by any guarantee of the issuer or related parties that affects the order of precedence contemplated in the following item. ix) They must provide that, in the event of the entity's bankruptcy and once the total amount of debts with other creditors including contractually subordinated debt has been satisfied, their holders will have precedence in the distribution of funds only and exclusively with respect to shareholders -regardless of the class of shares-, with express waiver of any general or special privilege. x) They must not contain clauses that declare the obligation of the term due in case of non-payment of their financial services or other debts or for any other reason, except bankruptcy. xi) The corresponding reserve constituted and it has prior authorization from that Superintendence for this purpose according to the procedure provided in Section 3. of the norms on “Distribution of results” -except the case relative to remuneration subject to a variable rate or to exchange rate variations provided in item iii)- or, in its absence, with the reserve fund referred to in item xiii). In no case will the payment of financial services be admitted while the entity:
i) presents minimum cash deficiencies on average -in pesos or in foreign currency-, and/or ii) registers financial assistance for illiquidity from the Central Bank of the Argentine Republic, with the exception of assistance received for illiquidity under article 17 of the Organic Charter, with adjustment to the regime of Decree 739/03 and its regulations (Communication “A” 3941 and complementary) and the operation provided through Communication “A” 4268 and complementary, and/or iii) is complying with a regularization and sanitation plan in the terms of article 34 of the Financial Entities Law. In the case of instruments that contemplate the accumulation of unpaid services, financial services may not be paid to the extent that there is no balance in the respective reserve. Version: 1st COMMUNICATION “A” 5282 Validity:
01/02/2012

Section 8. Computable Equity.
xii) Unpaid services shall not be cumulative; therefore, they may not be deferred and accumulated to be paid after their maturity, except as provided in subsection iv), item c), of point 8.2.2.4. xiii) If the establishment of a reserve fund is provided for, it must be integrated at the time of subscription and may not exceed 10% of the respective issuance. These amounts may be used to pay financial services maturing until 12.31.12, when there are no unassigned results available for the payment of financial services as provided in the specific procedure set forth in Section 3 of the "Distribution of Results" rules. This reserve fund shall be part of the liabilities, without prejudice to its off-balance sheet computation as computable equity as provided in subsection iii), item a), of point 8.2.2.4. In the event of bankruptcy, this fund shall be subject to the priority of payment set forth in subsection ix). xiv) They must have authorizations for both their public offering and their listing on self-regulated stock exchanges or markets in the country or abroad.

8.2.2.2. Prior Authorization.
Computation as computable equity shall only be admitted if there is prior authorization from the Superintendence of Financial and Exchange Entities, whose intervention shall aim to verify compliance with the enumerated requirements and, in particular, that the entity meets the minimum capital requirement. The documentation delivered to subscribers must expressly state that said authorization is granted solely for the purpose of computing the respective instrument in the computable equity of the issuing entity. The Superintendence shall issue an express ruling within 30 business days counted from the date it considers the presentation of the information and other pertinent elements related to the authorization request to be complete.

8.2.2.3. Purchase and Re-placement. Prohibition.
Financial entities may not purchase for subsequent re-placement their own issuances of debt-representative instruments that have been or are considered for the determination of computable equity. They may not acquire issuances made by other financial entities either. Version: 1st. COMMUNICATION “A” 5282 Validity:
01/02/2012

Section 8. Computable Equity.
8.2.2.4. Computable Amounts.
i) In the event that the placement is made below par:
For the determination of computable equity, the amount actually received shall be taken into account, i.e., deducting issuance discounts, not considering as such the commissions retained by the intervening placement agent. ii) For instruments issued in foreign currency:
They shall be computed, at all times, at the peso value at the exchange rate corresponding to the date of placement. iii) From the reserve fund:
a) The amounts of these funds that are effectively applied to the payment of financial services before 12.31.12 shall be computed off-balance sheet, to the extent that there are not sufficient distributable results according to the determination made in accordance with the specific procedure provided in Section 3 of the "Distribution of Results" rules. From that date, amounts that have not been used may also be computed as basic net equity, to the extent that the limits provided in point 8.2.1.6 are not exceeded, while the excess may be computed, if applicable, as supplementary net equity. b) Before 12.31.12, the amounts of the remaining reserve fund may not be computed for the purposes of determining computable equity. c) If applicable, as provided in subsection a), this fund shall be computed at the peso value of the services cancelled with imputation to its use. iv) As supplementary net equity:
a) Debt-representative instruments and the amounts of the respective reserve funds - applied to financial services before 12.31.12 and from that date also the unused amounts - to the extent that they exceed the limits provided in point 8.2.1.6. b) Debt-representative instruments with a residual term of less than 10 years. c) Debt-representative instruments when unpaid financial services are cumulative. From the beginning of each of the last five years of life of each issuance, the computable amount shall be decreased by 20% of the issued nominal value. Version: 1st. COMMUNICATION “A” 5282 Validity:
01/02/2012

Section 8. Computable Equity.
The total of debt-representative instruments and their respective reserve funds computed as supplementary net equity, together with other computable subordinate liabilities, may not exceed the equivalent of 50% of basic net equity.

8.2.2.5. Failure to Pay Financial Services.
The mere failure to pay one or more non-callable services - due to the non-existence of positive unassigned results available or a reserve fund - shall not be considered grounds for revocation of the authorization to operate as a financial entity, provided that:
i) other non-subordinated obligations are normally met, ii) cash dividends are not distributed to shareholders, and iii) fees are not paid to directors and auditors, except in cases where they perform executive functions.

8.2.2.6. Cancellation of the Reserve.
The reserve shall be reversed with a counter-entry in unassigned results upon each accrual and/or payment of financial services, whichever occurs first. If there is a remaining balance in the said reserve, it must be reversed before the next assembly.

8.2.3. Supplementary Net Equity.
It comprises the positive or negative result of the algebraic sum of the following concepts:

8.2.3.1. Contractually Subordinated Obligations:
i) to other liabilities, issued under the conditions established in point 8.2.4. (+). ii) debt-representative instruments and amounts of the respective reserve funds, as contemplated in point 8.2.2.4. iv) (+).

8.2.3.2. 100% of the results recorded up to the last quarterly financial statement that has an auditor's report, corresponding to the last closed fiscal year and for which the auditor has not yet issued their opinion (+ / -).

8.2.3.3. 100% of the results of the current fiscal year recorded at the close of the last quarterly financial statement, once it has an auditor's report (+ / -).
Version: 1st. COMMUNICATION “A” 5282
Validity:
01/02/2012

Section 8. Computable Equity.
8.2.3.4. 50% of gains or 100% of losses, from the last quarterly or annual financial statement that has an auditor's report or opinion. These percentages shall be applied to the accumulated net balance calculated at the close of each month, provided that the provisions in the two preceding subsections do not apply (+ / -).

8.2.3.5. 100% of losses not included in the financial statements, corresponding to the quantification of facts and circumstances reported by the auditor, as provided in the Minimum Standards on External Audits regarding reports with the results of limited reviews of financial statements, at the close of each quarter (-).

8.2.3.6. Provisions for uncollectibility risk on the portfolio corresponding to debtors classified as "in normal situation" (points 6.5.1. and 7.2.1. of the rules on "Classification of Debtors") and financings that are covered with preferred "A" guarantees (only 50% of the minimum required amount) (+).

8.2.3.7. Creditor or debtor balances registered in the accounts named "Unrealized valuation difference of holdings of national public securities available for sale", "Unrealized valuation difference of holdings of Letters issued by the B.C.R.A. available for sale" and "Unrealized valuation difference of holdings of Notes issued by the B.C.R.A. available for sale", respectively (+ / -).
For the purposes of computing 100% of the results recorded up to the last quarterly or annual balance, the respective financial statement with the auditor's report must be presented on the date when the presentation of the monthly balance becomes mandatory.

8.2.4. Computable Subordinated Debt.
The obligations of the entity, contractually subordinated to other liabilities, that are admitted for computation for the purposes of determining computable equity, must observe the following requirements:

8.2.4.1. Conditions.
i) The weighted average maturity at the time of incurring the debt shall not be less than 5 years.
This term shall be the result of dividing by 365 the sum of the days that elapse between the date of incurring the debt and the maturity date of each of the capital amortization services, multiplied by the proportion that each of the services represents in relation to the total instrument, considered at their nominal value. Version: 1st. COMMUNICATION “A” 5282 Validity:
01/02/2012

Section 8. Computable Equity.
In the event that the provided interest rates are, in the judgment of the Superintendence of Financial and Exchange Entities, notably higher than those usually established in debts of similar characteristics, in order to establish the average term of the obligation, the "duration" method shall be used. This term shall arise from weighting the number of days that elapse between the date of incurring the debt and the maturity date of each of the future services in concept of capital and interest, as applicable, by the proportion that the economic value of each of the services represents in relation to the economic value of the instrument. For this latter effect, the net present value of future cash flows discounted at their internal rate of return shall be considered.

ii) The early redemption or cancellation of the obligation, if provided for, may only be effected at the option of the debtor provided that:
a) it has prior authorization from the Superintendence of Financial and Exchange Entities before exercising the option, and b) the computable equity, after the redemption or cancellation, results in equal to or greater than the minimum capital requirement.

iii) The instrument shall not contain clauses that declare the obligation due in case of failure to pay amortization or interest services of this or other debts or for any other reason, except bankruptcy.

iv) The instrument must provide that, in the event of the entity's bankruptcy and once the entirety of debts with other non-subordinated creditors has been satisfied, its creditors shall have priority in the distribution of funds only and exclusively with respect to shareholders - regardless of the class of shares - with express waiver of any general or special privilege. Furthermore, it shall be established that this distribution shall be effected among all subordinated debts proportionally to the verified liabilities.

v) They may have interest coupons linked to the results of the financial entity.
Version: 1st. COMMUNICATION “A” 5282
Validity:
01/02/2012

Section 8. Computable Equity.
8.2.4.2. Computable Amount.
From the beginning of each of the last five years of life of each indebtedness, the computable amount shall be decreased by 20% of the issued nominal value net of effective amortizations. In no case may the computable amount at the beginning of each of these periods be greater than the result of applying said percentage cumulatively on the residual obligation at the end of each of these years, according to the capital amortization service schedule fixed. The total of this concept, together with debt-representative instruments and their respective reserve funds computed as supplementary net equity, may reach up to the equivalent of 50% of basic net equity. In the event that the placement is made below par, for the determination of computable equity, the amount actually received shall be taken into account, i.e., deducting issuance discounts, not considering as such the commissions retained by the intervening placement agent. Subordinated debt issued in foreign currency from 10.01.06 shall be computed, at all times, at the peso value at the exchange rate corresponding to the date of placement. The computable amount shall be decreased in proportion to the amortizations that are effected.

8.2.4.3. Prior Authorization.
Computation as supplementary net equity shall only be admitted if there is prior authorization from the Superintendence of Financial and Exchange Entities, whose intervention shall aim to verify compliance with the enumerated requirements and, in particular, that the entity meets the minimum capital requirement. If the Superintendence does not issue an express ruling within 30 calendar days counted from the date of presentation by the entity, the authorization shall be deemed granted.

8.2.4.4. Failure to Pay Services.
The mere failure to pay one or more amortization or interest services shall not be considered grounds for revocation of the authorization to operate as a financial entity, provided that:
i) the manner of extinguishing the unpaid obligation is determined within the year of its maturity, Version: 1st. COMMUNICATION “A” 5282 Validity:
01/02/2012

Section 8. Computable Equity.
ii) other non-subordinated obligations are normally met, iii) cash dividends are not distributed to shareholders, iv) fees are not paid to directors and auditors, except in cases where they perform executive functions, and v) if they have interest coupons linked to the results of the financial entity, they do not register distributable results, calculated in accordance with the general procedure provided in Section 2 of the "Distribution of Results" rules. Non-compliance with these requirements by the entity shall not imply any responsibility for the Central Bank of the Argentine Republic, an aspect that must be expressly stated in the offering prospectuses and in the issued instrument.

8.2.4.5. Purchase and Re-placement. Prohibition.
Financial entities may not purchase for subsequent re-placement their own issuances of subordinated debt that have been or are considered for the purposes of determining computable equity. They may not acquire issuances made by other financial entities from 10.01.06 either.

8.2.4.6. Concept of Subordination.
A debt is considered subordinated with respect to other liabilities when, under equal conditions regarding eventual privileges or among unsecured creditors, the creditor of said debt accepts to grant priority in the collection of the claim, in the event of the debtor's bankruptcy, to other liabilities under equal conditions. In the case regulated herein, said character implies the situation described in point 8.2.4.1. iv) above.

8.2.5. Deductible Concepts.

8.2.5.1. Balances in correspondent accounts with respect to foreign financial entities that do not have an international risk rating included in the "investment grade" category, granted by one of the rating agencies admitted by the rules on "Evaluation of Financial Entities".
This deduction shall be made by the highest balance registered in each bank that is recorded during the month to which the determination of computable equity corresponds. Version: 1st. COMMUNICATION “A” 5282 Validity:
01/02/2012

Section 8. Computable Equity.
To this end, balances in correspondent accounts registered with respect to the following shall not be deducted:
a) The head office of local branches of foreign banks or their branches and subsidiaries in other countries. b) Foreign banks or other financial institutions that exercise control of local financial entities constituted as anonymous societies. c) Other foreign banks authorized to intervene in the regimes of reciprocal payment and credit agreements to which the Central Bank of the Argentine Republic has adhered, as well as their branches and subsidiaries, even if they are not included in those agreements. d) Branches and subsidiaries of local financial entities. e) Balances that, on a temporary and circumstantial basis, originate from client operations, such as those related to foreign trade operations or other type of accreditation ordered by third parties that do not imply equity responsibility for the entity.

8.2.5.2. Credit instruments (securities, certificates of time deposits, and others) that are not physically in the possession of the entity, unless their registration or custody of registration certificates or book securities is under the responsibility of:
i) Central Bank of the Argentine Republic, for operations channeled through the Central Registry and Settlement of Public Liabilities and Financial Trusts (“CRYL”). ii) Caja de Valores S.A. iii) Clearstream, Euroclear and Depositary Trust Company (DTC). iv) Deutsche Bank, New York. In the event that deductible assets are maintained in accordance with this provision, the entity must record the existence of such concepts in a note to the quarterly and annual financial statements, quantifying the amount that is not admitted for consideration for the purposes of determining computable equity. Version: 1st. COMMUNICATION “A” 5282 Validity:
01/02/2012

Section 8. Computable Equity.
8.2.5.3. Securities issued by governments of foreign countries, whose international risk rating is lower than that assigned to national public securities of the Argentine Republic, and that do not have markets where they trade habitually for relevant values.
This deduction shall be made by the amount of the highest balance registered during the month to which the determination of computable equity corresponds.
To this end, mandatory investments that must be made by branches or subsidiaries - subject to the consolidated supervision regime - of local financial entities due to requirements imposed by the monetary or control authority of the country where they operate shall not be considered.

8.2.5.4. Securities and other debt instruments, contractually subordinated to other liabilities, issued by other financial entities that have been acquired until 09.30.06.
This deduction shall be made by the amount of the highest balance registered during the month to which the determination of computable equity corresponds.

8.2.5.5. Participations in financial entities, except when exemptions apply so as not to deduct them, net:
i) of provisions for devaluation risk, and ii) when they concern controlled financial entities and it is necessary to apply what is provided in point 8.2.3.4., of 50% of the gains of these in proportion to the respective participation.

8.2.5.6. Participations in foreign financial entities net:
i) of provisions for devaluation risk, and ii) when they concern controlled financial entities and it is necessary to apply what is provided in point 8.2.3.4., of 50% of the gains of these in proportion to the respective participation.

8.2.5.7. Participations linked to the application of the deferral of tax payments, incorporated until 02.19.99, or subsequently when they come from irrevocable subscription commitments instrumented until that date, from the month following the expiration of the legal unavailability term or the lapse, regardless of the reason, of the tax benefits, according to the pertinent legal and regulatory provisions.

8.2.5.8. Shareholders.
Version: 1st. COMMUNICATION “A” 5282
Validity:
01/02/2012

Section 8. Computable Equity.
8.2.5.9. Real estate, regardless of the date of its incorporation into equity, destined or not for the operation of the entity, whose accounting registration is not backed by the pertinent deed of transfer of ownership duly registered in the respective Real Estate Registry, except those acquired through judicial auction.
The deduction shall be equivalent to 100% of the value of said assets from their incorporation into equity, until the month prior to the regularization of that situation. The Superintendence of Financial and Exchange Entities may dispose of exclusions in this matter, to the extent that they do not undermine the objective of the deduction.

8.2.5.10. Goodwill (incorporations registered from 05.30.97).

8.2.5.11. Organization and development expenses, except the concepts expressly established as non-deductible, net of accumulated amortization.

8.2.5.12. Pending imputation items - Debit Balances - Others.

8.2.5.13. Upon request made by the Superintendence of Financial and Exchange Entities and with effect from the date indicated in each case, financial entities must deduct the amounts of the assets included, when from the elements made available to the acting inspectors it emerges that the accounting registrations made by the entities do not accurately reflect the economic and legal reality of the operations or that actions or devices have been carried out to distort or disguise the true character or scope of the operations.
The allocation of computable equity by application of the aforementioned shall determine the obligation to verify the classification of the different rules that use the said equity as a base, from the month in which the request made has effect, and, if applicable, the resulting charges must be deposited within 10 business days, counted from the date of notification of the request. In the event of deposit outside the fixed term, pertinent interest for delay arising from the application of each infringed rule must be paid.

8.2.5.14. Differences due to insufficiency of the constitution of minimum provisions for uncollectibility risk determined by the Superintendence of Financial and Exchange Entities, to the extent that they have not been accounted for, with effect at the close of the month following that in which the entity receives the notification referred to in the first paragraph of point 2.7. of Section 2. of the rules on "Minimum Provisions for Uncollectibility Risk".

8.2.5.15. Participations in companies whose corporate purpose is the development of any of the following activities:
Version: 1st. COMMUNICATION “A” 5282
Validity:
01/02/2012

MINIMUM CAPITAL OF FINANCIAL ENTITIES
B.C.R.A.
Section 8. Computable Equity Liability.
i) Financial assistance through capital goods leasing operations, durable and real estate, acquired for such purpose ("leasing") or on credits arising from sales ("factoring"). ii) Temporary acquisition of shareholdings in companies to facilitate their development, with the aim of subsequently selling the holdings. Granting financing and advisory services in planning and management to those companies. The computation shall be net of provisions for devaluation risk.
8.2.5.16. The excess over the limits for the encumbrance of assets in guarantee, as provided in Section 3. of the regulations on "Encumbrance of assets in guarantee".
8.2.5.17. The higher balance of credit assistance granted in the month, when the advances provided for in point 3.2.5. of Section 3. of the regulations on "Financing to the non-financial public sector" exceed the authorized limit and/or are not cancelled within the deadlines provided for therein.
8.3. Capital Contributions.
For the purposes of all regulations related to capital, its integration and increase, including those related to regularization and restructuring plans and without prejudice to what is provided in point 1.1. of Section 1. of Chapter V of Circular CREFI - 2 (text according to Communication "A" 4510) regarding the negotiation of shares or irrevocable contributions for future capital increases, contributions must be made in cash. Exceptionally, with prior authorization from the Superintendence of Financial and Currency Entities, contributions in:
8.3.1. national public securities;
8.3.2. monetary regulation instruments of the Central Bank;
8.3.3. deposits and other obligations by financial intermediation of the entity.
In the cases covered by points 8.3.1. and 8.3.2., contributions must be recorded at their market value. Instruments shall be deemed to have market value when they have regular quotation in the regulated stock exchanges and markets of the country or abroad where they are traded, with relevant transactions in whose amount, the eventual liquidation of the holdings cannot significantly distort their quotation. In the cases of point 8.3.3., contributions must be recorded at their market value -with the scope defined in the previous paragraph- or, when they are financial entities that make a public offering of their shares, at the price fixed by the competent control authority of the corresponding market. Contributions of this type of instrument will not be admitted when the previously mentioned conditions are not verified. Version: 1st. COMMUNICATION "A" 5282 Validity:
01/02/2012

Section 8. Computable Equity Liability.
When it comes to deposits and other obligations by financial intermediation of the financial entity -including subordinated obligations- that do not have authorization to be traded in regulated secondary markets of the country or abroad, contributions will be admitted at their book value -capital, interest, adjustments, foreign currency exchange differences and, if applicable, issuance discounts-, in accordance with the regulations of the Central Bank of the Argentine Republic. In no case shall the capitalization of debt imply a limitation or suspension of the right of preference established in article 194 of the Commercial Companies Law, so what is provided in article 197 of said law shall not apply. The decision to capitalize the concepts indicated in points 8.3.1 to 8.3.3. by the Shareholders' Meeting (or equivalent authority) will be "ad referéndum" of its approval by the Superintendence of Financial and Currency Entities or, if applicable, by the Central Bank of the Argentine Republic -as provided in point 1.1. of Section 1. of Chapter V of Circular CREFI - 2-, a circumstance that must be exposed in a note to the financial statements of the following periods -quarterly or annually, as applicable-, in the terms established by the Superintendence of Financial and Currency Entities. Until approval of the contributions has been notified to them and to the extent that they have been accounted for, they will be deducted from the computable equity liability of the financial entity. When the accounted contributions come from the capitalization of subordinated debt or instruments representing debt that can be considered -totally or partially- as an integral part of the computable equity liability, the treatment that would correspond to apply in the matter if they had remained registered accountingly as liabilities will be maintained.
8.4. Procedure.
The request for authorization of capital contributions with the instruments referred to in points 8.3.1. to 8.3.3. must be accompanied by a copy of the Shareholders' Meeting minutes (or equivalent authority) certified by a public notary in which such decision is recorded and that, to adopt it, the Meeting had at its disposal the special report of the external auditor that is established for cases where the contribution includes the debt instruments indicated in the following paragraph. When it comes to the capital contributions referred to in point 8.3.3., the debt instruments must be registered in the last annual or quarterly balance sheet, as applicable, immediately preceding the date of convening the relevant Shareholders' Meeting. Such financial statement must have the intervention of the external auditor provided for each case according to the applicable regulations in the matter and have been previously presented before this Institution and be accompanied by a special report from said auditor, prepared in the terms specifically established in the Minimum Standards on External Audits issued by the Superintendence of Financial and Currency Entities. Version: 1st. COMMUNICATION "A" 5282 Validity:
01/02/2012

MINIMUM CAPITAL OF FINANCIAL ENTITIES
B.C.R.A.
Section 9. Bases for observance of the regulations.
9.1. Individual Base.
Financial entities (including their subsidiaries in the country and abroad) will observe the regulations on minimum capital on an individual basis.
9.2. Consolidated Base.
Without prejudice to individual compliance, controlling financial entities subject to consolidated supervision will observe the regulations on minimum capital on a monthly consolidated basis and, additionally and independently, on a quarterly basis. In the case of minimum capital for market risk and operational risk, the regulations must be observed on a monthly consolidated basis. Version: 6th. COMMUNICATION "A" 5282 Validity:
01/02/2012

MINIMUM CAPITAL OF FINANCIAL ENTITIES
B.C.R.A.
Section 10. Transitional Provisions.
10.1. Acquisitions of financial entities.
For the purposes of determining the computable equity liability on a consolidated basis, the consolidating entity may add the amount registered in the specific item in the Provisions of Liabilities section.
10.2. Merger of financial entities.
For the purposes of determining the computable equity liability, the amount corresponding to the "negative goodwill" registered in the specific item in the Provisions of Liabilities section may be added.
10.3. For the purposes of implementing what is established in Section 7., financial entities must apply to the requirement arising from using the expression provided for in point 7.1. the coefficient corresponding according to the following schedule:
Period Coefficient
February 2012 / March 2012 0
April 2012 / July 2012 0.50
August 2012 / November 2012 0.75
December 2012 1
Version: 1st. COMMUNICATION "A" 5282
Validity:
01/02/2012

B.C.R.A.
ORIGIN OF THE PROVISIONS INCLUDED IN THE
ORDERED TEXT OF THE REGULATIONS ON
"MINIMUM CAPITAL OF FINANCIAL ENTITIES"
ORDERED TEXT ORIGINATING REGULATION
Section Point Paragraph Com.
Chap./
Annex
Point Paragraph
Observations
1.1. "A" 2136 1. 1st According to Com. "A" 2859, 3558 and 5272.
1.2.1. "A" 2237 b) According to Com. "A" 2923 (point
3.1.2.3. of Section 3.), 4631,
5183 and "B" 9186.
1.2.2. "A" 2923 3. 3.2.2.
1.2.3. "A" 2923 3. 3.3.
1.3. "A" 2136 2. 1st According to Com. "A" 2223.
1.4.1. "A" 2136 3.1.
"A" 3171 According to Com. "A" 3959. i) "A" 2136 3.2. 2nd According to Com. "A" 3959. ii) "A" 2136 3.2.4. According to Com. "A" 2241 and 4771.
1.4.2.1. iii) "A" 414
LISOL-1
VI 6.1.
1.
1.4.2.2. "A" 3171 According to Com. "A" 3959.
2.1.1. "A" 2241
CREFI-2
I 1.3.1. According to Com. "A" 4368.
2.1.2. "A" 2241
CREFI-2
I 1.3.1. According to Com. "A" 4368, 4771 and 5168.
2.2. "A" 2650 2. According to Com. "A" 3128, 4238 and
4368.
2.3.1. "A" 2237 a) According to Com. "A" 2923 (point
3.1.1.2. of Section 3.) and 5183.
2.3.2. "A" 2923 3. 3.2.1. According to Com. "A" 5183.
2.
2.3.3. "A" 2923 3. 3.3.
3.1. "A" 2136 1. According to Com. "A" 2541, 2736, 2938,
3039, 3307, 3959, 4598, 4702 (incorporates clarification), 4741, 4742, 4961, 4996, 5180 and "B" 9745.
3.2. "A" 2136 I According to Com. "A" 2541, annex, criteria, d), 2nd paragraph and 3040.
3.3.1. "A" 2136 I According to Com. "A" 2541, annex, criteria, d), 2nd paragraph.
3.3.2. "A" 2287 5.
3.3.3. "A" 2412 In the second paragraph of point
3.3.3.3. incorporates criterion not given to
known generally with anteriority. According to Com. "A" 3959.
3.4.1. "A" 2768 2. According to Com. "A" 2948, 3911, 3925,
3959, 4180 and "B" 9074.
3.4.2. "A" 2227 unique 5.2.2. 3rd
3.
3.5.1. "A" 2136 1.1.

MINIMUM CAPITAL OF FINANCIAL ENTITIES
ORDERED TEXT ORIGINATING REGULATION
Section Point Paragraph Com.
Chap./
Annex
Point Paragraph
Observations
5.
5.6. "A" 2922 I According to Com. "A" 4172. Point
5.6.4.5., 3274, 3959, 4180, 4543,
4874, 5091, 5180, 5234, "B" 6523,
9186 and 9516.
6.1. and
6.2.
"A" 2461 unique I and II According to Com. "A" 4172, 4741 and 5180.
6.3. and
6.4.
"A" 2461 unique I and II According to Com. "A" 3959 and 4172.
6.5. "A" 2461 unique I and II According to Com. "A" 2736, 2768, 2948,
3959, 4172 and "B" 9074. The point
6.5.2. includes interpretative clarification.
6.6. "A" 2461 unique III According to Com. "A" 3161, 4172 and 5272.
6.7. "A" 2461 unique VI According to Com. "A" 4172.
6.
6.8. "A" 2461 unique VII According to Com. "A" 4172.
7. 7.1. "A" 5272 2.
7.2. "A" 5272 2.
8.1. "A" 414
LISOL-1
VI 3.1. 1st According to Com. "A" 2279, 2453, 2793, 2914, 3039 and 4172.
8.2.1. "A" 414
LISOL-1
VI 3.1.1. According to Com. "A" 2223, 2227, 4296, (point 2.), 4576 (point 1.) and 4665.
8.2.2. "A" 4576 2. According to Com. "A" 4591 (points 2.,3.,
4. and 5.), 4665 -the point 7.2.2.5. includes interpretative clarification- and
4782.
8.2.3. "A" 414
LISOL-1
VI 3.1.2. According to Com. "A" 2223, 2768, 2948, 4172, 4576 (point 3.), 4665, 4702 and "B" 9074.
8.2.4. 1st "A" 414
LISOL-1
VI 3.1.2.2. According to Com. "A" 2264, 4172, 4576 (point 4.) and 4782.
8.2.4.1. and
8.2.4.2.
"A" 414
LISOL-1
VI 3.1.2.2. According to Com. "A" 2264, 4172, 4576 (points 5. and 6.) and 4782.
8.2.4.3. and
8.2.4.4.
"A" 414
LISOL-1
VI 3.1.2.2. According to Com. "A" 2264, 4172 and
4782. In the second paragraph of
point 7.2.4.3. incorporates clarification interpretative.
8.2.4.5. "A" 2264 2. According to Com. "A" 4172 and 4576 (point
8.).
8.2.4.6. "A" 414
LISOL-1
VI 3.1.2.2. According to Com. "A" 2264, 4172 and 4665.
8.2.5.1. "A" 2287 3.1. and
3.3.
According to Com. "A" 2890, 4172 and 5093.
8.
"A" 2287 3. last According to Com. "A" 4172 and 5093.

MINIMUM CAPITAL OF FINANCIAL ENTITIES
ORDERED TEXT ORIGINATING REGULATION
Section Point Paragraph Com.
Chap./
Annex
Point Paragraph
Observations
1st "A" 2497 1. According to Com. "A" 3621, 4172 and 5183.
8.2.5.2. last "A" 2263 2. According to Com. "A" 4172.
1st and last
8.2.5.3. "A" 2287 3.2. According to Com. "A" 4172.
2nd "A" 2474 Procedure regulations on requirement and integration of minimum capital (point 3.2.7.). Modified by Com. "A" 4172.
8.2.5.4. "A" 2264 1. According to Com. "A" 4172 and 4576
(point 7.).
"A" 414
LISOL-1
VI 3.2. According to Com. "A" 4172, 4539 and
4665.
8.2.5.5.
"A" 1215 Specifications of the items of shareholdings in entities non-deductible financial for determining the computable equity liability. According Com. "A" 4172.
8.2.5.6. "A" 414
LISOL-1
VI 3.2. According to Com. "A" 4172, 4539 and
4665.
8.2.5.7. "A" 2863 3. According to Com. "A" 4172.
8.2.5.8. "A" 414
LISOL-1
VI 3.2. According to Com. "A" 4172.
8.2.5.9. "A" 2730 Incorporates interpretative clarification. According to Com. "A" 4172.
8.2.5.10. "A" 2545 According to Com. "A" 4172.
8.2.5.11. "A" 414
LISOL-1
VI 3.2. Modified by Com. "A" 986 and
4172.
8.2.5.12. "A" 414
LISOL-1
VI 3.2. According to Com. "A" 4172.
8.2.5.13. "A" 2287 4. According to Com. "A" 4172.
"A" 2607 1. According to Com. "A" 4172.
8.2.5.14. "A" 2893 1. According to Com. "A" 4172.
8.2.5.15. "A" 3087 According to Com. "A" 4172.
8.2.5.16. "A" 4725 6.
8.2.5.17. "A" 5069 2.
8.3. "A" 414
LISOL-1
VI 3.4. According to Com. "A" 1858, 4172,
4631, 4652 and "B" 9186.
8.
8.4. "A" 4652 2.
9.1. "A" 2227 unique 5.2.1. last According to Com. "A" 2649 and 4172.
9.2. 1st "A" 2227 unique 5.1.1. and
5.1.7.
According to Com. "A" 2649 and 4172.
"A" 2227 unique 5.2.2. According to Com. "A" 4172.
9.
9.2. last "A" 2461 unique V. According to Com. "A" 4172 and 5272.
10.1. "A" 3985 According to Com. "A" 4172.
10. 10.2. "A" 3985 According to Com. "A" 4172.
10.3. "A" 5272 8.

CONSOLIDATED SUPERVISION
B.C.R.A.
Section 5. Observance of regulations.
5.2.1.9. Valuation of debt instruments of the non-financial public sector and monetary regulation instruments of the Central Bank of the Argentine Republic.
5.2.2. Quarterly consolidated base.
Without prejudice to individual compliance, and additionally and independently of compliance on a monthly consolidated basis, controlling financial entities subject to consolidated supervision will observe on a quarterly consolidated basis the following regulations:
5.2.2.1. Minimum capital, except for market risk and operational risk.
5.2.2.2. Classification of debtors and minimum provisions for uncollectible risk.
5.2.2.3. Credit risk fragmentation.
5.2.2.4. Maximum limit for holding shareholdings in companies that do not provide
complementary services to the financial activity.
5.2.2.5. Ratio for immobilized assets and other concepts.
5.2.2.6. Valuation of debt instruments of the non-financial public sector and monetary regulation instruments of the Central Bank of the Argentine Republic.
5.2.3. Observance of regulations on "Prevention of money laundering, terrorist financing and other illicit activities".
Financial entities must ensure that branches and subsidiaries included in this regime consider within the internal control scheme the following:
5.2.3.1. Existence of written policies and procedures for the prevention of money
laundering and terrorist financing framed in international standards, consistent with the specific characteristics of the different activities and consistent with those of the parent company and/or controlling entity. Version: 6th. COMMUNICATION "A" 5282 Validity:
01/02/2012

CONSOLIDATED SUPERVISION
ORDERED TEXT ORIGINATING REGULATION
Section Point Paragraph Com.
Annex
Point Paragraph
Observations
5.2.1.6. "A" 4891 8.
5.2.1.7. "A" 2690 unique 6.
5.2.1.8. "A" 2227 unique 5.1.8. According to Com. "A" 2736.
5.2.1.9. "A" 5180 8.
5.2.2. "A" 2227 unique 5.1. According to Com. "A" 2649. Complemented by Com. "A" 2461,
2736, 2839, 5180, 5272 and "B"
5902.
5.2.3. "A" 4835 4. According to Com. "A" 5223.
5.2.4. "A" 5093
5.3.1. "A" 2227 unique 5.2.1. According to Com. "A" 2649.
5.3.2. "A" 2227 unique 5.2.2.
5.4.1. "B" 6115 3rd
5.4.2. "B" 6566 1.
5.
5.5. "A" 2227 unique 5.3. According to Com. "A" 2649.

MINIMUM CAPITAL BREACHES AND TECHNICAL RELATIONS.
B.C.R.A. APPLICABLE CRITERIA
Section 1. Minimum capital deficiencies.
1.3. Daily capital deficiency.
1.3.1. Immediate classification.
In the event of a daily integration defect, except for the one corresponding to the last day of the month, regarding the capital requirement for market risk, originated in the computation of the requirement by the sum of the risk values of the assets included ("VaRp"), the financial entity must replenish the capital and/or reduce its financial asset positions until it achieves compliance with the established requirement, for which it will have a period of ten business days, counted from the first deficiency.
1.3.2. Persistent deficiency.
1.3.2.1. If the defect persists for a period longer than 10 business days, entities must present a regularization and restructuring plan within 5
business days following, with the effects indicated in the second paragraph of point 1.1.
1.3.2.2. When it comes to deficiencies determined by the Superintendence of Financial and Currency Entities and to the extent that the deficiency is subsistent according to the latest available information, the terms referred to in
point 1.2.1. for the presentation of the defense and that this Superintendence issues its opinion thereon will be 5 and 10 business days, respectively, while for the regularization of the breach, in the manner provided for in point 1.3.1., the entity will observe a period of 10 business days, counted from the date on which the integration defect becomes final. Once that term has expired without the breach having been regularized, what is established in point 1.3.2.1. will be observed.
1.4. Application of article 41 of the Financial Entities Law.
Summary proceedings will be initiated according to the guidelines defined by the Superintendence of Financial and Currency Entities.
Version: 2nd. COMMUNICATION "A" 5282
Validity:
01/02/2012

B.C.R.A.
ORIGIN OF THE PROVISIONS INCLUDED IN THE TEXT
ORDERED OF THE REGULATIONS ON
MINIMUM CAPITAL BREACHES AND TECHNICAL RELATIONS.
APPLICABLE CRITERIA
ORDERED TEXT ORIGINATING REGULATION
Section Point Paragraph Com. Chap. Point Paragraph
Observations
1st "A" 3161 1.1.
2nd "A" 3161 1.1. According to Com. "A" 3171 (point 1.).
1.1.
3rd "A" 3171 1.
1.2. "A" 3161 1.2.
1.2. "A" 3161 1.2.1.
1.2.1. "A" 3161 1.2.1.
1.2.2. "A" 3161 1.2.2.
1.2.2. "A" 3161 1.2.2.1.
1.2.2.1. "A" 3161 1.2.2.1.
1.2.2.2. "A" 3161 1.2.2.2.
1.2.2.2. "A" 3161 1.2.2.2.
1.3. "A" 3161 1.3.
1.3. "A" 3161 1.3.1.
1.3.1. "A" 3161 1.3.1. According to Com. "A" 5272.
1.3.2. "A" 3161 1.3.2.
1.3.2. "A" 3161 1.3.2.1.
1.3.2.1. "A" 3161 1.3.2.1.
1.3.2.2. "A" 3161 1.3.2.2.
1.3.2.2. "A" 3161 1.3.2.2.
1.4. "A" 3161 1.4.
2.1. "A" 3161 According to Com. "A" 4546, 4742,
4838, 4861, 4926 (point 1.),
4937 (point 4.), 4961, 4996,
5180 and "B" 9745.
2.2.1. "A" 3161 2.1.1.
2.2.2. "A" 3161 2.1.2. According to Com. "A" 3171 (point 2.).
2.3. "A" 3161 2.2.
2.3. "A" 3161 2.2.1.
2.3.1. "A" 3161 2.2.1.
2.3.2. "A" 3161 2.2.2.
2.3.2. "A" 3161 2.2.2.1.
2.3.2.1. "A" 3161 2.2.2.1. According to Com. "B" 9745
2.3.2.2. "A" 3161 2.2.2.2.
2.3.2.2. "A" 3161 2.2.2.2.
2.3.3. "A" 3161 2.2.3. According to Com. "A" 3171 (point 3.).
2.4. "A" 3161 2.3. According to Com. "A" 3171 (point 4.).
2.5. "A" 3161 2.4.
2.6. "A" 3161 2.5.
3.1. "A" 3161 3.1.
3.2. "A" 3161 3.2.

2.1. Requirement.
The capital requirement that cooperative credit unions must have integrated by the last day of each month will be equivalent to the highest value resulting from the comparison between the basic requirement (point 2.4.) and the sum of those determined by credit, interest rate and operational risks.
2.2. Integration.
For the purposes of determining compliance with the minimum capital requirement, the integration to be considered will be the computable equity liability.
2.3. Breaches.
The provisions established in point 1.4. of Section 1. of the regulations on "Minimum capital of financial entities" will apply.
2.4. Basic requirements.
They will be the following:
CATEGORIES REQUIREMENT
I $ 5,000,000
II $ 3,000,000
III $ 1,250,000
IV $ 500,000
Cooperative credit unions will be classified into categories according to the criterion established generally in the regulations on "Minimum capital of financial entities". In the event that the parent company and all branches of the cooperative credit union are installed in localities, municipalities or communes -as applicable according to the pertinent jurisdiction- where up to two operational houses -head office/parent, branches and special attention dependencies "agencies"- of financial entities are enabled, the basic requirement corresponding to the immediately lower category will apply. When the condition indicated in the previous paragraph ceases to be met, the cooperative credit union must observe the basic requirement corresponding to it according to the preceding table, and must -if it incurs in minimum capital integration defects- be classified according to what is provided for in point 1.4.2. of Section 1. of the regulations on "Minimum capital of financial entities". The basic requirement established in the cited table corresponding to cooperative credit unions classified in categories I and II, will be increased by 10% or 25% of the respective values when they have one or more branches or dependencies, whatever their class according to the regulations applicable in the matter, according to the present regulation, respectively. COOPERATIVE CREDIT UNIONS (LAW 26.173) B.C.R.A.
Section 2. Minimum capital and distribution of social capital.
Version: 3rd. COMMUNICATION "A" 5282
Validity:
01/02/2012

COOPERATIVE CREDIT UNIONS (LAW 26.173) B.C.R.A.
Section 2. Minimum capital and distribution of social capital.
2.5.4.6. Financings covered with guarantees granted by reciprocal guarantee societies or public guarantee funds registered in the Records enabled at the B.C.R.A. 50
2.5.4.7. "Warrants" on fungible goods that have normal and regular quotation in local or international markets,
of wide dissemination and easy access to public knowledge, considering the established coverage margins (point 5.5. of
Section 5.). 75
2.5.4.8. Accounts receivable from consumers for services already rendered,
issued by service provider companies to the public, considering the established coverage margins (point 5.5. of
Section 5.). 75
2.5.4.9. Credits for financial leases on real estate, motor vehicles and agricultural, road and industrial machinery
(to the extent that they are registered in the pertinent national vehicle property registry and have a market that allows obtaining a reference value), considering the established coverage margins (point 5.5. of Section 5.). 50 2.5.4.10.Other financings -including national public securities, provided they have quotation in stock exchanges and markets where they are traded-, those that have the guarantees provided for in points 2.5.4.3., 2.5.4.5., 2.5.4.7., 2.5.4.8. or 2.5.4.9. when the coverage margins are lower than those corresponding according to the regulations of Section 5., and other assets. 100
2.6. Requirement for other risks.
2.6.1. Interest rate.
Cooperative credit unions will observe in this matter the provisions that the Central Bank of the Argentine Republic may establish specifically for this class of entities.
2.6.2. Market.
It will not be observed. The assets and off-balance sheet accounts involved will be subject to credit risk requirement.
2.6.3. Operational.
The minimum capital requirement for operational risk corresponding to each month will be equivalent to 10% of the sum of the requirements determined by the risks of credit and interest rate of the respective month. Version: 4th. COMMUNICATION "A" 5282 Validity:
01/02/2012

B.C.R.A.
ORIGIN OF THE PROVISIONS INCLUDED IN THE CONSOLIDATED TEXT OF THE REGULATIONS ON "COOPERATIVE CREDIT UNIONS (LAW 26.173)" CONSOLIDATED TEXT ORIGIN OF THE PROVISION Sec. Point Para. Comm. Annex Ch. Sec. Point Para. OBSERVATIONS
1.1. “A” 4712 Unique 1. 1.1.
1.2. “A” 4712 Unique 1. 1.2.
1.3. “A” 4712 Unique 1. 1.3. According to Comm. “A” 5168 and
5248.
1.4. “A” 4712 Unique 1. 1.4.
1.5. “A” 4712 Unique 1. 1.5. According to Comm. “A” 5248.
1.6. “A” 4712 Unique 1. 1.6.
1.
1.7. “A” 4712 Unique 1. 1.7.
2.1. “A” 4712 Unique 2. 2.1. According to Comm. “A” 5272.
2.2. “A” 4712 Unique 2. 2.2.
2.3. “A” 4712 Unique 2. 2.3.
2.4. “A” 4712 Unique 2. 2.4. According to Comm. “A” 5168.
2.5. “A” 4712 Unique 2. 2.5. According to Comm. “B” 9186 and “A”
5067 and 5275.
2.6. “A” 4712 Unique 2. 2.6. According to Comm. “A” 5272.
2.7. “A” 4712 Unique 2. 2.7. According to Comm. “A” 4972 (point
9.).
2.8. “A” 4712 Unique 2. 2.8.
2.
2.9. “A” 4712 Unique 2. 2.9.
3.1. “A” 4712 Unique 3. 3.1.
3.2. “A” 4712 Unique 3. 3.2.
3.3. “A” 4712 Unique 3. 3.3. According to Comm. “A” 4809, 5091
and 5164.
3.4. “A” 4712 Unique 3. 3.4.
3.5. “A” 4712 Unique 3. 3.5.
3.6. “A” 4712 Unique 3. 3.6.
3.
3.7. “A” 4712 Unique 3. 3.7.
4.1. “A” 4712 Unique 4. 4.1.
4.2. “A” 4712 Unique 4. 4.2.
4.3. “A” 4712 Unique 4. 4.3. According to Comm. “A” 4891 (points 9. to 12.).
4.4. “A” 4712 Unique 4. 4.4.
4.5. “A” 4712 Unique 4. 4.5.
4.6. “A” 4712 Unique 4. 4.6.
4.7. “A” 4712 Unique 4. 4.7.
4.
4.8. “A” 4712 Unique 4. 4.8. According to Comm. “B” 9186 and “A”
4972 (point 6.).
5.1. “A” 4712 Unique 5. 5.1. According to Comm. “A” 5275.
5.2. “A” 4712 Unique 5. 5.2. According to Comm. “A” 5067 and
5275.
5.3. “A” 4712 Unique 5. 5.3.
5.4. “A” 4712 Unique 5. 5.4.
5.5. “A” 4712 Unique 5. 5.5. According to Comm. “A” 5067 and
5275.
5.6. “A” 4712 Unique 5. 5.6.
5.
5.7. “A” 4712 Unique 5. 5.7.
6.1. “A” 4712 Unique 6. 6.1.
6.2. “A” 4712 Unique 6. 6.2.
6.
6.3. “A” 4712 Unique 6. 6.3.

-IndexSection 1. General criterion.
1.1. Previous conditions.
Section 2. General procedure.
2.1. Determination of distributable result.
2.2. Verification of liquidity and solvency.
2.3. Authorization.
Section 3. Specific procedure.
3.1. Conditions for its application. Determination of the distributable result and verification of liquidity and solvency.
Section 4. Transitional provisions.
Correlation table.
B.C.R.A.
CONSOLIDATED TEXT OF THE REGULATIONS ON
"DISTRIBUTION OF RESULTS"
Version: 2nd COMMUNICATION “A” 5282
Validity:
01/02/2012

DISTRIBUTION OF RESULTS
B.C.R.A.
Section 3. Specific procedure.
3.1. Conditions for its application. Determination of the distributable result and verification of liquidity and solvency.
For the purposes of the payment of financial services corresponding to the issuance of debt-representative instruments, referred to in point 8.2.2. of Section 8. of the regulations on "Minimum capital of financial entities", the specific procedure detailed below will be used:
3.1.1. The issuance of such debt instruments must have the prior approval of the shareholders' meeting or equivalent corporate body, which must issue its ruling on the issuance and its conditions. In such issuance conditions and in the offers made, the requirements that condition, under this regime, the payment of financial services must be explicitly stated, referencing the Central Bank provisions applicable in this matter.
When dealing with negotiable bonds, the aforementioned requirement will also be considered fulfilled in the case where the Ordinary General Assembly or equivalent corporate body authorizes a program for the issuance of debt-representative instruments in a generic manner, delegating to its Board of Directors the determination of the specific terms and conditions, observing what is provided in article 9° of Law 23.576. This, without prejudice to the analyses that, on this aspect and others pertaining to each issuance and placement, correspond to the National Securities Commission in matters of legality control, adjusted to the public offering of securities regime, in its capacity as the authority applying Law 17.811.
3.1.2. To determine the existence of a sufficient balance to proceed with the payment, the general procedure provided for in points 2.1. and 2.2. regarding the determination of the capacity to distribute results will be used, with the following exceptions:
3.1.2.1. amounts corresponding to the concepts provided for in points 2.1.1. and 2.1.2. will not be deducted from unassigned results, nor will they be considered for the recalculation of minimum capital positions -point 2.2.-.
3.1.2.2. the amount corresponding to the concept contemplated in point 2.1.5. will not be deducted from unassigned results -point 2.1.-, nor will it be considered as a deduction in the computable net worth liability (term "Cd" of the expression contained in point 8.1. of Section 8. of the regulations on "Minimum capital of financial entities") for the recalculation of minimum capital positions -point 2.2.-.
The Superintendency of Financial and Exchange Entities, without prejudice to the authorization previously granted for the issuance, will verify annually, based on the corresponding distribution proposal submitted, the correct application of the procedure for the calculation of unassigned results purged according to these provisions and of the required levels of solvency and liquidity for this case and the constitution of the corresponding reserve for the attention of financial services. Consequently, issuances of debt instruments that do not satisfy the applicable requirements in this matter or at the option of the entity, will be subject to the general procedure provided for in Section 2. Version: 7th COMMUNICATION “A” 5282 Validity:
01/02/2012

DISTRIBUTION OF RESULTS
B.C.R.A.
Section 4. Transitional provisions.
Until November 2012, for the purposes of verifying solvency referred to in point 2.2. of Section 2., financial entities must compute in that recalculation the amount of the requirement that would have corresponded to them by application of point 1.1. of Section 1. and Section 7. of the regulations on "Minimum capital of financial entities" and point 5.2.2.1. of Section 5. of the regulations on "Consolidated supervision". The coefficient to be applied to the requirement resulting from the expression provided for in point 7.1. of Section 7. of the regulations on "Minimum capital of financial entities", will be equal to 1. Version: 1st COMMUNICATION “A” 5282 Validity:
01/02/2012

CONSOLIDATED TEXT ORIGIN OF THE PROVISION OBSERVATIONS Sec. Point Para. Comm. Annex Ch. Sec. Point Para.
1.1. “A” 4589 1.
1.1.1. “A” 4589 1.1.
1.1.2. “A” 4589 1.2. According to Comm. “A” 4591
(point 6.) and 5072.
1.1.3. “A” 4589 1.3.
1.
1.1.4. “A” 4589 1.4. According to Comm. “A” 5072.
2.1. “A” 4589 2. According to Comm. “A” 4591
(point 6.) and 5273.
2.1.1. “A” 4589 2.1.
2.1.2. 1st “A” 4589 2.2. 1st According to Comm. “A” 4698,
4898, 4976, 5072 and “B”
9186.
2nd “A” 4589 2.2. 2nd According to Comm. “A” 4591 (point 7.), 4664, 4898 and 4976.
3rd “A” 4898 According to Comm. “A” 4976,
5072 and 5180.
4th “A” 4589 2.2. 3rd
2.1.3. “A” 4589 2.3.
2.1.4. “A” 4589 2.4.
2.1.5. “A” 4686 3.
2.1.6. “A” 4702 4. According to Comm. “A” 5180.
2.2. “A” 4589 3. According to Comm. “A” 4591
(point 8.), 5072, 5273 and
“B” 9104.
2.2.1. “A” 4589 3.1. According to Comm. “A” 4591
(point 8.).
2.2.2. “A” 4589 3.3. iv) According to Comm. “A” 4591
(point 8.) and “B” 9104.
2.2.3. “A” 4589 3.3. According to Comm. “A” 4591
(point 8.).
2.
2.3. “A” 4589 4.
3.1. “A” 4591 1. According to Comm. “A” 5282.
3.1.1. “A” 4591 1. Incorporates the interpretative criterion of Comm.
“C” 46841.
3.
3.1.2. “A” 4591 1. According to Comm. “A” 4686,
4702, 5072, 5180, 5282 and “B” 9104.
4. “A” 5272 9. According to Comm. “A” 5282
B.C.R.A.
ORIGIN OF THE PROVISIONS INCLUDED IN THE CONSOLIDATED TEXT OF THE REGULATIONS ON "DISTRIBUTION OF RESULTS"

-IndexSection 7. Classification of debtors in the consumer or housing portfolio.
7.1. Classification criterion.
7.2. Classification levels.
7.3. Mandatory recategorization.
7.4. Information to the Superintendency of Financial and Exchange Entities on increases in the irregular portfolio.
Section 8. Information to clients.
8.1. Information to be supplied.
Section 9. Bases for compliance with the regulations.
9.1. Individual basis.
9.2. Consolidated basis.
Section 10. Other obliged to comply with the regulations on classification of debtors.
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 and public guarantee funds.
Section 11. Transitional Provisions.
Correlation table.
B.C.R.A.
CONSOLIDATED TEXT OF THE REGULATIONS ON
"CLASSIFICATION OF DEBTORS"
Version: 6th COMMUNICATION “A“ 5275
Validity:
02/02/2012
Communication “A” 5282