Circular Monetary Regulations - REMON 1 - 30. Use of Central Bank Loans

CENTRAL BANK OF THE ARGENTINE REPUBLIC
COMMUNICATION "A" 156 12/07/82
TO FINANCIAL ENTITIES:
Ref.: Circular MONETARY REGULATIONS -
REMON - 1 - 30. Use of loans from the Central Bank

We address you in order to inform you that, in order to provide you with the necessary elements to enable the calculation of the minimum cash position, correctly attributing funds effectively used by those debtors who may be beneficiaries based on the provisions to be taken into account when assigning them, to the different limits of loans authorized by this Institution, the Central Bank has resolved to establish the procedural norms detailed below:

“1 - Financial entities will open three accounts which will be named:

• “Net utilization of the additional loan not yet credited by the BCRA - General Clientele”,
• “Net utilization of the additional loan not yet credited by the BCRA - Free Rate” and
• “Net utilization of the additional loan not yet credited by the BCRA - Mortgage Credits
  for Housing”.

Daily, they will charge interest to these accounts at a rate equivalent to the daily rates corresponding to the monthly rates fixed according to the applicable sub-limit. These rates will be applied to the balances registered at the end of the previous day in the “Basic Loan” and “Additional Loan” accounts already credited, plus the balance of the respective “Net utilization of the additional loan not yet credited by the BCRA” account. Also, amounts received from clients during the day as principal and/or adjustments and/or interest on loans attributed to these limits, registered up to the previous day, will be debited from this account. The amount to be deducted from the account will be determined as follows:
a) The amount received will be discounted to the date of origin of the operation, using the effective daily rate applied by the entity to the client, and, b) The amount thus obtained will be updated by applying the effective daily interest rate established by the Central Bank for the sub-limit to which the operation corresponds.

For these purposes, for loans in force as of 30.6.82, it will be considered that the amount subject to update comprises the original loan plus adjustments and accrued interest as of that date which are pending collection. Likewise, new loans settled on that day attributed to the “Basic” or “Additional” loan will be charged to these accounts.

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  Credits of the “Additional” loan made by the
  Central Bank will be debited from these accounts, starting from the day they are registered in the current account of the entity at the Central Bank of the Argentine Republic.

The daily balances of the “Net utilization of the additional loan not yet credited by BCRA” accounts will be computed as liquidity for the purposes of integrating the minimum cash provided that the sum of the monthly averages of daily balances of said accounts does not exceed the maximum limit of the “Additional” loan that the financial entity had authorized by the BCRA for that month.

In the event that said sum of averages exceeds the maximum limit of the “Additional” loan that the financial entity had authorized by the Central Bank for that month, only the aforementioned limit may be computed as liquidity.

2 - Starting from July 15, 1982, in the settlement of credit operations formalized by entities, it must be stated whether they are operations attributed to the sub-limit for general clientele and indicate, in that case, that the maximum rate to be charged to the client is 6% effective monthly; or to the sub-limit for clientele included in point 8 of Chapter I and in point 2 of Chapter IV of Circular REMON - 1 - 22, noting that the rate is free, but the cost for the entity is 6.20% effective monthly for the first month; or if the operation is made with resources coming from non-transferable fixed-term deposits at a free or adjustable medium-term rate.

3 - Before July 23, 1982, through an analysis of their credit portfolio, financial entities must establish which of the debtor balances for capitals and adjustments and accrued interest pending collection as of 30.6.82 have been attributed to the sub-limit for operations of the general clientele and which to the sub-limit for clientele included in point 8 of Chapter I and in point 2 of Chapter IV of Circular REMON - 1 - 22.

To this end, they will request from their clients by registered letter and with sufficient advance notice, the sworn declarations of the aspects that the entity must know in order to classify its debtors. The debts of clients who do not respond within a peremptory period will be attributed to the second of said sub-limits, and may be transferred to the first, if applicable, from the moment they present the sworn declaration.

Personal and family loans, whether mortgage, pledge, joint, or single signature, are excluded from this requirement, and will be attributed directly to the first sub-limit, without prejudice to also requesting the respective sworn declaration from those debtors within a non-peremptory period.

In the same way and until the day on which the determination of the sub-limit to which each credit operation is attributed becomes mandatory, financial entities will proceed to attribute all operations they have formalized between 1.7.82 and that day, as appropriate.

4 - In cases where a reduction of the interest rate with which the credit settlement was made is applicable, the entity will proceed to send the clien-

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  B.C.R.A. COMMUNICATION "A" 156 12.7.82 tee a corrective statement in which the sub-limit to which it has been attributed is stated, with the same requirements required for operations formalized from July 15, 1982.”

We salute you very respectfully.
CENTRAL BANK OF THE ARGENTINE REPUBLIC
Néstor J. Taró
Manager of Standards for
Financial Entities
Daniel E. de Pablo
General Sub-manager