Circular Monetary Regulations - REMON 1 - 445. Establishment of an Unavailable Deposit

BANCO CENTRAL DE LA REPÚBLICA ARGENTINA
COMMUNICATION "A" 1292 01/12/88
TO FINANCIAL ENTITIES:
Ref.: Circular MONETARY REGULATIONS - REMON - 1 - 445. Establishment of an unavailable deposit.
We address you to inform you that this Institution adopted the following resolution:

“1- Establish that, with effect as of 12/01/88, financial entities must establish an unavailable deposit at the Central Bank, not countable for the integration of the minimum cash reserve, subject to the following conditions:

1.1. Requirement.
1.1.1. Entities not included in Annex V to Communication “A” 865.
3% of the monthly average of daily balances of fixed-term deposits in australes, nominative, transferable and non-transferable, non-adjustable and adjustable by financial index - excluding those captured with adjustment under point 3.4. of Chapter I of Circular OPASI - 2-, of the passive pass-throughs of national public securities and of the capitals effectively traded in “acceptances”, registered in November 1988.

1.1.2. Banks included in Annex V to Communication “A” 865.
3% of the growth of the concepts mentioned in point 1.1.1, except for the passive pass-throughs of public securities, resulting from comparing the averages corresponding to November 1988 and to the period 10/01/87-10/14/87, excluding fixed-term deposits and “acceptances” from the provincial and municipal public sector of the respective jurisdictions.

1.1.3. When the determined requirement is less than A 2,500,000, the entities will be released from establishing this deposit.

1.1.4. From 12/01/88, the applicable requirement will be deducted from the integration of the minimum cash reserve until the day prior to the crediting of funds in the deposit account.

1.2. Fulfillment
It will be carried out no later than 12/06/88.

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1.3. Adjustment
To update the original capital of each release, the variation rate arising from the following expression will be applied:

r_t = [(I_t / I_{t-1})^(1/n) - 1] * 100

Where r_t : variation rate.
I_t : financial index of 12/16/88 or the day prior to the release, as applicable.
I_{t-1}: financial index of 11/30 or 12/18/88, as applicable. n: number of days of each period.

1.4. Release
It will be carried out in amounts and on dates determined by the Central Bank, as long as the unavailable deposit is fully fulfilled. The first of these will occur on 12/19/88 for an amount equivalent to 2% of the items computable to determine the requirement of point 1.1.

2. Cancel, with effect as of 12/01/88, the balance as of 11/30/88 of the unavailable deposit “Communication “A” 1287”, which will be applied together with its adjustment to the integration of the deposit referred to in the preceding point 1 up to the amount resulting from section 1.1.”

We clarify that to carry out fund movements, the provisions disseminated through Communication “A” 641 will be applied.

In Formulas 4028, to be submitted to the Treasury Department, or in case of “Telex”, the following data will be recorded:

• Unavailable deposit “Communication “A” 1292”

• Special account number: the one assigned to the financial asset “at unregulated rate” (Communication “A” 733) will be recorded, replacing its first two digits with the number 98.

• Operation code: 385 (deposit)

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  BCRA COMMUNICATION “A” 1292 18.11.88

• Amount: the positive result arising from deducting the balance (capital and adjustment) as of 11/30/88 corresponding to the unavailable deposit “Communication “A” 1287” from the requirement determined according to point 1.1 of the preceding resolution will be recorded.

Likewise, the following must be sent to the General Secretariat Department:
a) An additional copy of Formula 4028, in whose “Observations” box the calculation of the requirement will be detailed, which will be equivalent to 3% of the sum of lines 1.2.7., 1.2.8.1. and 1.8. of Table A of Formula 3000 corresponding to November 1988. b) Credit Note (Formula 3030) for the adjustment accrued by the unavailable deposit “Communication “A” 1287”, in which it will be indicated, as the concept of the operation “Adjustment of the unavailable deposit “Communication “A” 1287” creditable in the account of the unavailable deposit “Communication “A” 1292” with code 387, and as the account number, the corresponding to this latter deposit, testing the word “current”. c) Note with the detail of the calculation of the requirement of the unavailable deposit “Communication “A” 1287”, which will be equivalent to 2% of the sum of the lines indicated in a) corresponding to October 1988.

When the requirement of the unavailable deposit “Communication “A” 1292” results in being less than the balance (capital and adjustment) as of 11/30/88 of the unavailable deposit “Communication “A” 1287”, in addition, a Formula 4027 will be sent to the General Secretariat Department for the amount of the difference, indicating as concept: Unavailable deposit “Communication “A” 1287” not applied to the establishment of the unavailable deposit “Communication “A” 1292” with code 388. In said formula, the special account number will be recorded, and in the “Observations” box, the calculation carried out to determine the fulfillable release will be detailed.

From 12/01/88, said release will be added to the integration of the minimum cash reserve until the day prior to its crediting. This concept will be reported in line 58 of Formula 3000 B with the denomination: Release of the unavailable deposit “Communication “A” 1287”.

On its part, the deductions from the integration of the minimum cash reserve referred to in point 1.1.4. of the preceding resolution, will be recorded in line 57, of said formula with the denomination: Requirement of the unavailable deposit “Communication “A” 1292” net of the cancellation (capital and adjustment) of the unavailable deposit “Communication “A” 1287”.

For the release to be made on 12/19/88, entities must present in the General Secretariat Department separate credit notes for the current account, corresponding to capital (Formula 4027) and adjustment (Formula 3030), which will be determined as follows:

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where:
Lc = release (capital)
Lt = 2% of the sum of lines 1.2.7., 1.2.8.1. and 1.8. of Table A of Formula 3000 of November 1988 r_t = variation rate between 11/30 and 12/18/88 Ln = Release (adjustment)

Lc = Lt / (1 + r_t)
Ln = Lt - Lc

In the cited formulas, the operations will be individualized with the denomination of “Release of the unavailable deposit “Communication “A” 1292” (capital or adjustment, as applicable)” with codes 389 and 390, respectively.

From 12/19/88, the total of the release will be added to the integration of the minimum cash reserve until the day prior to its crediting. This concept will be reported in line 59 of Formula 3000 B with the denomination: Partial release of the unavailable deposit “Communication “A” 1292”.

We salute you very attentively.
BANCO CENTRAL DE LA REPÚBLICA ARGENTINA
Alfredo A. Besio
Manager of Standards for
Financial Entities
Julio A. Piekarz
Deputy General Manager