Circular No. 169 — Casaded Loan/Deposit Operations - Artificial Elevation of Deposits - Penalties Provided for in Article Forty-Four of Law 4595, of December 31, 1964, Against Banking Establishments and Their Administrators Who Admit Irregularities

CIRCULAR N. 000169

To
Banking Establishments

THE CENTRAL BANK OF BRAZIL, by deliberation of the National Monetary Council, in a session held on December 16, 1971, and having in view, among other objectives, the preservation of the norms issued by Resolution No. 114, of May 7, 1969, communicates that the following shall be subject to the penalties provided for in Art. 44 of Law No. 4,595, of December 31, 1964:

banking establishments and their respective administrators who admit:

a) "Casaded" Loan/Deposit Operations, which are identifiable as having the objective:

I - evading the maximum interest rates fixed by the National Monetary Council;

II - indirect crediting, under any modality, of interest to demand deposit accounts;

b) The artificial elevation of deposits.

Regardless of the penalties provided for by the determination of any of the irregularities indicated above, the Central Bank of Brazil will determine the republication of balance sheets or trial balances, with the corrections that prove necessary, for the faithful expression of the real patrimonial or financial reality.

Brasília-DF, December 17, 1971

Luiz de Carvalho e Mello Filho
Director