Circular No. 1687 - Establishes Demonstration for Calculating Deficiency Limit in New Cruzados and Clarifies Procedures Under Circular 1663

CIRCULAR NO. 001687

TO
INSTITUTIONS OF THE NATIONAL FINANCIAL SYSTEM

(*) ESTABLISHES DEMONSTRATION FOR THE CALCULATION OF THE DEFICIENCY LIMIT IN NEW CRUZADOS AND CLARIFIES PROCEDURES TO BE OBSERVED REGARDING THE PROVISIONS OF CIRCULAR NO. 1,663, OF 11.04.90.

WE COMMUNICATE THAT THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BRAZIL, IN A SESSION HELD ON 18.04.90, TAKING INTO ACCOUNT THE PROVISIONS OF CIRCULAR NO. 1,663, OF 11.04.90, HAS DECIDED:

ART. 1. THE MONTHLY FIXING OF THE MAXIMUM LIMIT OF ADMITTED DEFICIENCIES WILL BE CARRIED OUT BASED ON A DEMONSTRATION ESTABLISHED BY ARTICLE 2 OF THIS CIRCULAR, TO BE DELIVERED TO THE BANKING OPERATIONS DEPARTMENT OR ITS REGIONAL REPRESENTATIVES, OBSERVING THE CALENDAR BELOW:

PERIOD OF CALCULATION BASE DELIVERY DATE VALIDITY

19.03 TO 31.03 31.03.90 02.05.90
01.04 TO 15.05 16.04.90 02.05.90
16 TO 31.05 30.04.90 15.05.90 01 TO 15.06 15.05.90 31.05.90 16 TO 30.06 31.05.90 15.06.90 01 TO 15.07 15.06.90 30.06.90 16 TO 31.07 30.06.90 15.07.90
......

§ 1. FOR THE SUBSEQUENT FORTNIGHTS, AN IDENTICAL SCHEDULE MUST BE OBSERVED, CLARIFYING THAT THE DELIVERY DATE MUST BE THE LAST BUSINESS DAY OF THE FORTNIGHT OR THE LAST BUSINESS DAY OF THE MONTH. § 2. FROM 30.04.90 AND UNTIL THE INSTITUTION SUBMITS THE DEMONSTRATIONS PROVIDED FOR IN THIS ARTICLE, THE LIMIT WILL BE CONSIDERED EQUAL TO ZERO. § 3. ADJUSTED NET WORTH MAY BE ESTIMATED FOR MID-MONTH POSITIONS, OR, IN THE ABSENCE OF A CONSISTENT ESTIMATE, IT WILL BE CORRECTED BY THE BTNF. ART. 2. ESTABLISH THE ATTACHED DEMONSTRATION FOR THE CALCULATION OF THE DEFICIENCY LIMIT IN NEW CRUZADOS, FOR THE PURPOSE OF CALCULATING THE DEFICIENCY LIMIT IN NEW CRUZADOS REFERRED TO IN ARTICLE 3 OF CIRCULAR NO. 1,663, OF 11.04.90. ART. 3. THE CODIFICATIONS OF THE ATTACHED DEMONSTRATION TO THIS CIRCULAR IN THE DOCUMENT CATALOG - CADOC ARE AS FOLLOWS:

SEGMENT CODE

COMMERCIAL BANKS 20.1.3.095-0 MULTIPLE BANKS 26.1.3.155-1 DEVELOPMENT BANKS 22.1.3.095-8 INVESTMENT BANKS 24.1.3.085-3 STATE SAVINGS BANKS 36.1.3.135-2 FEDERAL SAVINGS BANK 38.0.3.155-3 CREDIT, FINANCING AND INVESTMENT COMPANIES 81.1.3.095-1 REAL ESTATE CREDIT COMPANIES 83.1.3.135-0 SAVINGS AND LOAN ASSOCIATION 12.1.3.105-3 MERCHANT LEASING COMPANIES 77.1.3.065-9 SECURITIES BROKERAGE AND DEALING COMPANIES 79.1.3.018-3 SECURITIES DISTRIBUTION COMPANIES 85.1.3.040-7 CREDIT COOPERATIVES 44.1.3.050-3

ART. 4. FOR THE PURPOSE OF CALCULATING THE ADMISSIBLE DAILY DEFICIENCY IN NEW CRUZADOS, IN THE CASE OF COMMERCIAL BANKS OR FINANCIAL INSTITUTIONS WITH COMMERCIAL PORTFOLIOS, WHOSE ACCOUNT 6.110.01.10-6 - DEP. M.P. 168/90 - BANKING RESERVES - IN CASH IS USED BY OTHER INSTITUTIONS OF THE NATIONAL FINANCIAL SYSTEM IN TRANSACTIONS WITH THIS BODY, THE SUM OF THE DAILY BALANCES OF ACCOUNTS "4.9.7.99.00-4 - AMOUNTS PAYABLE TO THE CENTRAL BANK - M.P. 168/90" AND "4.9.7.97.00-6 - OTHER INSTITUTIONS OF THE N.F.S.

• DEPOSITS OF M.P. 168/90 AT THE CENTRAL BANK" WILL BE CONSIDERED.

ART. 5. FOR THE PURPOSE OF CALCULATING OWN WORKING CAPITAL (CGP), LEASED ASSETS MUST BE DISREGARDED FROM PERMANENT ASSETS. ART. 6. INSTITUTIONS OF THE NATIONAL FINANCIAL SYSTEM MUST INFORM, VIA THE CENTRAL BANK INFORMATION SYSTEM - SISBACEN, THROUGH A TRANSACTION TO BE DISCLOSED IN DUE COURSE, THE DAILY BALANCE, FROM 19.03.90, OF ACCOUNTS "4.6.1.85.00-6" AND "4.9.7.99.00-4" OF COSIF. ART. 7. IN THE EVENT THAT THE INSTITUTION PRESENTS A DEFICIENCY EXCEEDING THE LIMIT DEFINED IN ARTICLE 3 OF CIRCULAR NO. 1,663, OF 11.04.90, THE CENTRAL BANK WILL TRANSFER FROM THE "BANKING RESERVES" ACCOUNT, IN CRUZEIROS, TO A "LINKED" ACCOUNT, THE AMOUNT CORRESPONDING TO THE CALCULATED DIFFERENCE. SINGLE PARAGRAPH - IF THE DIFFERENCE REFERRED TO IN THE MAIN TEXT OF THIS ARTICLE IS REGULARIZED, THE CENTRAL BANK WILL UNFREEZE THE CRUZEIROS FROM THE "LINKED" ACCOUNT, WITH ACCRUAL UP TO THE DATE OF EFFECTIVE REGULARIZATION. ART. 8. THIS CIRCULAR WILL ENTER INTO FORCE ON THE DATE OF ITS PUBLICATION, PRODUCING EFFECTS FROM 15.03.90, WITH ARTICLE 5 OF CIRCULAR NO. 1,663, OF 11.04.90, BEING REPEALED.

BRASÍLIA (DF), APRIL 20, 1990.

IBRAHIM ERIS LUIS EDUARDO ALVES DE ASSIS PRESIDENT DIRECTOR

ATTACHMENT TO CIRCULAR NO. 1,687, OF 20.04.90

CADOC CODE:

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DEMONSTRATION FOR THE CALCULATION OF THE DEFICIENCY LIMIT IN NEW CRUZADOS (CIRCULAR NO. 1,663, OF 11.04.90)

LIMIT 1, ACCORDING TO ITEM "I" OF ART 3:

BALANCE OF ACCOUNT 4.6.1.85.00-6 - OBLIGATIONS FOR DEFICIENCY IN PAYMENT - M.P. 168/90

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NCZ$

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CALCULATION OF LIMIT 2, ACCORDING TO ITEM "II" OF ART 3:

A = SUM OF ACTIVE OPERATIONS, IN NEW CRUZADOS, DESCRIBED, RELATED AND DISCRIMINATED IN ANNEX I:

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NCZ$

P = SUM OF PASSIVE OPERATIONS, IN NEW CRUZADOS, RELATED IN
ANNEX II:

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NCZ$

CGP = OWN WORKING CAPITAL, OBTAINED AS FOLLOWS:
ADJUSTED NET WORTH - PERMANENT ASSETS

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NCZ$

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LIMIT 2 = A - (P + CGP) NCZ$ ------ ------ MAXIMUM DEFICIENCY LIMIT: ------ ( THE SMALLER AMONG LIMITS 1 AND 2 NCZ$ CALCULATED ABOVE) ------

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ACTIVE OPERATIONS IN NCZ$ ANNEX I ------ COSIF ACCT NO. VALUE AVG. ANNUALIZED RATE ------+------+------ 1.2.2.10.00-8 ------+------+------ 1.3.1.10.00-4 ------+------+------ 1.3.4.10.00-3 ------+------+------ 1.3.4.20.00-0 ------+------+------ 1.3.4.30.00-7 ------+------+------ 1.3.4.40.00-4 ------+------+------ 1.4.2.25.00-8 ------+------+------ 1.4.2.45.00-2 ------+------+------ 1.4.2.55.00-9 ------+------+------ 1.4.2.60.00-1 ------+------+------ 1.4.2.65.00-6

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1.4.2.70.00-8
------+------+------
1.4.3.10.00-9
------+------+------
1.4.3.20.00-6
------+------+------
1.4.3.60.00-4
------+------+------
1.4.3.90.00-5
------+------+------
1.6.1.20.00-8
------+------+------
1.6.1.30.00-5
------+------+------
1.6.2.10.00-4
------+------+------
1.6.2.15.00-9
------+------+------
1.6.2.20.00-1

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1.6.2.30.00-8
------+------+------
1.6.2.50.00-2
------+------+------
1.6.3.10.00-7
------+------+------

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COSIF ACCT NO. VALUE AVG. ANNUALIZED RATE ------+------+------ 1.6.3.20.00-4 ------+------+------ 1.6.3.30.00-1 ------+------+------ 1.6.3.40.00-8 ------+------+------ 1.6.4.10.00-0 ------+------+------ 1.6.4.30.00-4 ------+------+------ 1.6.4.35.00-9 ------+------+------ 1.6.4.40.00-1 ------+------+------ 1.6.4.60.00-5 ------+------+------ 1.6.5.10.00-3 ------+------+------ 1.6.5.20.00-0 ------+------+------ 1.6.5.30.00-7 ------+------+------ 1.6.6.10.00-6 ------+------+------ 1.6.6.60.00-1 ------+------+------ 1.6.7.20.00-6 ------+------+------ 1.6.7.35.20-4 ------+------+------ 1.6.7.60.20-0 ------+------+------ 1.7.1.10.00-0 ------+------+------ 1.7.1.20.00-7 ------+------+------ 1.7.1.60.00-5 ------+------+------ 1.7.3.10.00-6 ------+------+------ 1.7.3.60.00-1 ------+------+------ 1.7.5.10.00-2 ------+------+------ 1.8.8.10.00-0 ------+------+------ 1.8.8.35.00-9 ------+------+------

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COSIF ACCT NO. VALUE AVG. ANNUALIZED RATE ------+------+------ 1.8.8.40.00-1 ------+------+------ 1.8.8.80.00-9 ------+------+------ 1.8.8.90.00-6 ------+------+------ 1.8.8.92.00-4 ------+------+------ T O T A L

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OBSERVATIONS: 1) THE AVERAGE ANNUALIZED RATE MUST BE CALCULATED FOR EACH TYPE OF OPERATION, WEIGHTED BY THE VALUE OF OPERATIONS INVOLVED IN EACH RUBRIC.
2) VALUES MUST BE REPORTED AT THEIR PRESENT VALUE,
EXCLUDING THE RESPECTIVE INCOME/EXPENSES TO BE APPORTIONED, EXCEPT FOR MERCHANT LEASING OPERATIONS.

PASSIVE OPERATIONS IN NCZ$ ANNEX II

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COSIF ACCT NO. VALUE
------+------
4.1.2.10.00-0
------+------
4.1.2.20.00-7
------+------
4.1.2.30.00-4
------+------
4.1.2.40.00-1
------+------
4.1.2.50.00-8
------+------
4.1.2.60.00-5
------+------
4.1.2.80.00-9
------+------
4.1.2.90.00-6
------+------
4.1.3.10.00-3
------+------
4.1.4.10.00-6
------+------
4.1.5.10.00-9
------+------
4.1.5.50.00-7
------+------
4.1.7.10.00-5
------+------
4.3.1.10.00-5
------+------
4.3.1.30.00-9 ( ) ------+------ 4.3.2.10.00-8 ------+------ 4.3.2.30.00-2 ( ) ------+------ 4.3.3.15.00-6 ------+------ 4.3.3.30.00-5 ( ) ------+------ 4.3.4.10.00-4 ------+------ 4.3.4.30.00-8 ( ) ------+------ 4.6.2.10.00-5 ------+------ 4.6.2.30.00-9 ------+------ 4.6.3.10.00-8

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COSIF ACCT NO. VALUE
------+------
4.6.3.30.00-2
------+------
4.6.3.50.00-6
------+------
4.6.4.10.00-1
------+------
4.6.4.20.00-8
------+------
4.6.4.30.00-5
------+------
4.6.4.40.00-2
------+------
4.6.4.50.00-9
------+------
4.6.4.60.00-6
------+------
4.6.4.90.00-7
------+------
4.6.6.10.00-7
------+------
4.9.6.50.00-2
------+------
4.9.9.08.00-8
------+------
4.9.9.20.00-0
------+------
4.9.9.23.00-7
------+------
4.9.9.50.00-1
------+------
4.9.9.90.00-9
------+------
4.9.9.92.00-7
------+------
6.2.1.10.00-0
------+------
6.2.1.20.00-7
------+------
6.2.1.30.00-4
------+------
6.2.1.40.00-1
------+------

------+------
COSIF ACCT NO. VALUE
------+------
6.2.1.50.00-8
------+------
6.2.1.60.00-5
------+------
6.2.1.80.00-9
------+------
6.2.1.90.00-6
------+------
1.2.3.10.00-1 ( ) ------+------ 1.4.2.10.00-6 ( ) ------+------ T O T A L

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OBSERVATION: VALUES MUST BE REPORTED AT THEIR PRESENT VALUE, EXCLUDING THE RESPECTIVE INCOME/EXPENSES TO BE APPORTIONED, EXCEPT FOR MERCHANT LEASING OPERATIONS.

THE INSTITUTION IS RESPONSIBLE FOR THE VERACITY OF THE INFORMATION PROVIDED IN THIS DEMONSTRATION.

(*) REISSUED, TAKING INTO ACCOUNT CHANGES IN ARTICLE 1.