Circular Monetary Regulations REMON 1-291, Active Operations OPRAC 1-119, Passive Operations OPASI 1-76, and Norms for Regulated and Unregulated Rates

BANCO CENTRAL DE LA REPUBLICA ARGENTINA
COMMUNICATION "A" 865 31/03/86
TO FINANCIAL ENTITIES:
Ref.: CIRCULARS MONETARY REGULATIONS -
REMON-1-291. ACTIVE OPERATIONS -
OPRAC-1-119. PASSIVE OPERATIONS -
OPASI-1-76. Norms applicable to operations at rates regulated and not regulated by the Central Bank.

We address you to communicate the new norms applicable to the banks included in Annex V, which are attached as Annexes I, II, III and IV, and will govern from 1.4.86.

We salute you very attentively.

BANCO CENTRAL DE LA REPUBLICA ARGENTINA
Liliana M. Conti Néstor J. Taro
Deputy Manager of Norms for Deputy General Manager Financial Entities

ANNEXES

B.C.R.A. NORMS ON THE LENDING CAPACITY OF THE REGULATED SYSTEM
Annex I to
Comm. "A" 865

1. Deposits and other obligations at interest rates subject to fractional reserve requirements shall observe - regardless of the place of import - the following minimum cash requirements:
   %

• Common Savings Account 11,0
• Special Savings Account 6,5
• Fixed-term non-adjustable from 7 to 14 days 15,0
  from 15 to 22 days 11,0 from 23 to 29 days 8,5 from 30 days or more 6,5
• Checking accounts and other demand obligations 20,0
  These reserves shall not be remunerated by the Central Bank.

2. The obligation to subscribe and integrate the financial asset of the Central Bank "at regulated rate" referred to in point 5. of Annex I to Communication "A" 617 is hereby rendered ineffective.

3. For the attention of financing operations - except those adjustable by United States dollar clause - the banks included in Annex V shall have the following resources:
   3.1. The lending capacity of deposits and other obligations at regulated rate.
   3.2. Other sources of financing that do not have specific economic placement conditions foreseen.
   3.3. Interfinancial obligations, except those adjustable by United States dollar clause.
   3.4. Own resources, net of immobilized assets.

4. The average active rate of new credit operations shall be the maximum fixed by the Central Bank of the Republic Argentina for operations not imputed to the sublimit "General Clientele" of the Consolidated Loan. For these purposes, the active rate applicable to each operation may vary, above or below, by up to 1% effective monthly with respect to the established average.

5. For credit operations to the non-financial private sector at regulated rate, the provisions made known through Communication "A" 682 and complementary ones do not apply.

6. Interfinancial loans may be carried out exclusively with public financial entities.

B.C.R.A. NORMS ON OPERATIONS AT UNREGULATED RATE Annex III to Comm. "A" 865

1. The banks included in Annex V shall cease the collection of resources at interest rates not regulated by the Central Bank (Communication "A" 613).

2. The unregulated rate credits existing on 31.3.86 may be maintained under the originally agreed cost conditions when supported by the theoretical lending capacity of unregulated rate deposits not yet matured, and by liquid own resources.
   The theoretical lending capacity shall be understood as equivalent to 50.5% of the monthly average of daily balances of unregulated rate deposits not yet matured.

3. From 1.4.86 the only source of support for new unregulated rate operations shall be that coming from the liquid own resources of the entity.

4. The banks included in Annex V shall allocate to the subscription and integration of the financial asset of the Central Bank "at unregulated rate" established through the provisions made known by Communication "A" 733, 92.5% of the annual average of daily balances (capitals) of fixed-term deposits at unregulated rate (existing on 31.3.86) not yet matured, plus the total of the accrued interests to be paid for said deposits on that date.
   The additional integration referred to in the preceding paragraph in excess of 42% shall be remunerated at the rate fixed by the Central Bank. Initially it shall be 3.95% effective monthly.

5. On 1.4.86 the banks covered by these norms shall cancel the interfinancial obligations (capital and interests) existing on 31.3.86.

B.C.R.A. REGIME APPLICABLE TO OPERATIONS
VIGOROUS ON 31.3.86
Annex III to Com.
"A" 865

I. Fund Releases
On 1.4.86 the following assets of the entities in the Central Bank shall be released:

1. The balance on 31.3.86 (capital and adjustments) of the indisponible deposit adjustable by Combined Price Index (Communication "A" 611), which is pending release on that date.
2. The balance on 31.3.86 of the indisponible deposit (capital and adjustments) referred to in point 1. of Annex II to Communication "A" 617, which is pending release on that date.
3. The balance on 31.3.86 of the special asset in the Central Bank (capital) established by the resolution made known through Communication "A" 793, in the part corresponding to financial support for insufficient growth of fixed-term deposits adjustable by Combined Price Index.

II. Determination of Over and Under-expansion Situations

1. On 1.4.86 the entities shall compute:
   1.1. The releases exposed in the previous section.
   1.2. The amount resulting from applying the mechanism for the determination of the requirement for subscription and integration referred to in point 5. of Annex I to Communication "A" 617, in accordance with what is prescribed in Communication "A" 640 and complementary ones, regarding the balances on 31.3.86 of deposits in savings and fixed-term at regulated rate.
   1.3. The amount resulting from applying 68.5% on the monthly average of daily balances of deposits in checking accounts and other demand obligations - except those constituted by other financial entities - corresponding to March 1986.
   1.4. Interfinancial loans at unregulated rate (capital to interests) existing on 31.3.86, cancelled on 1.4.86, to financial entities included in this regime.

2. With the total of the items defined above, the banks included in Annex V, in the order mentioned below, shall:
   2.1. Cancel the balance of interfinancial obligations at unregulated rate (capital and interests) on 31.3.86.
   2.2. Integrate into the special account of the financial asset of the Central Bank "at unregulated rate" an amount of additional requirement for the following concepts:

• 2 -
  2.2.1. 50.5% on the balance of fixed-term deposits at unregulated rate on 31.3.86.
  2.2.2. The balance of accrued interests to be paid on that date for the total of said deposits, pending effective realization.
  The balance of interfinancial loans granted to entities not included in this regime for operations existing on 31.3.86 shall be deducted from the requirement defined in the previous points, until its extinction.
  2.3. Cancel the balances (capital, adjustments and interests) of the Central Bank loan lines existing on 31.3.86, taking into account the appropriation order to be fixed separately.
  For these purposes, the agreements formalized by the Central Bank, which are pending utilization by the entities on 31.3.86, shall also be considered.

3. When the total of the items mentioned in point 1. exceeds that of the integrations and cancellations defined in point 2., by the difference the entities shall constitute a special deposit in the Central Bank, which shall be released in 6 monthly installments, equal and consecutive, from 1.5.86, inclusive.
   The said deposit shall be remunerated monthly at the rate resulting from subtracting 0.5% effective monthly from the regulated active rate for credits not imputed to the sublimit "General Clientele" of the Consolidated Loan, payable on the first day of the month following that which corresponds.

4. When the items indicated in point 1. are not sufficient to cancel the entirety of the loan lines, in accordance with what is defined in point 2.3., the subsisting lines shall be maintained under the conditions established at origin.

5. In case that the amount of the items indicated in point 1. does not reach to integrate the additional requirement of the financial asset of the Central Bank "at unregulated rate" as established in point 2.2., the Central Bank shall grant a residual loan line amortizable in 18 monthly installments, equal and consecutive, from 1.5.86.
   For these funds the entities shall pay interest at the rate resulting from subtracting 0.5% effective monthly from the regulated active rate for operations not imputed to the sublimit "General Clientele" of the Consolidated Loan, payable on the first day of the month following that which corresponds.

B.C.R.A. COMPLEMENTARY PROVISIONS Annex IV to
Comm. "A" 865

1. Before 3.4.86 the banks included in Annex V shall send to the Management of Control of Financial Entities with copy to the Monetary Programming Management, the following information:
   1.1. Balance (capital and interests) on 31.3.86 of deposits at unregulated interest rate.
   1.2. Daily schedule of the maturities of amount of deposits at unregulated rate from 1.4.86 to 15.4.86, both inclusive.
   1.3. Balance (capital and adjustments) on 31.3.86 of the indisponible deposit at regulated rate (Communication "A" 617).

2. Until the procedure norms for the determination of the over and under-expansion situations of the involved entities are made known, the Central Bank shall process requests for credit of funds in its checking accounts in this Institution which in their entirety cannot exceed an amount equivalent to 30% of the balances required in 1.1. or in 1.3., the lesser of both, and without individually exceeding the total of maturities included in 1.2. from the day following that of the pertinent request until 15.4.86, inclusive.

3. For the amounts credited as transitional advance, and until they are applied to the return of deposits, the entities shall observe a requirement of 100% minimum cash.

B.C.R.A. ENTITIES INCLUDED Annex V to Com.
"A" 865

The public financial entities are included in the regime referred to in Annexes I to IV with the exception of the following:

• Public of the Nation
  Banco de la Nación Argentina
  Banco Hipotecario Nacional
  Banco Nacional de Desarrollo
  Caja Nacional de Ahorro y Seguro
• Public of Provinces
  Banco de la Provincia de Buenos Aires
  COFIRENE Banco de Inversión S.A.
  Banco Santafesino de Inversión y Desarrollo S.A.
• Public of Municipality
  Banco de la Ciudad de Buenos Aires