Circular No. 1702 - Procedures Regarding the Statement Attached to Circular No. 1687 of April 26, 1990 - Daily Average Rate on Financial Costs from Deficiencies in MP 168/90 Bank Reserve Accounts

CIRCULAR NO. 001702

TO
INSTITUTIONS OF THE NATIONAL FINANCIAL SYSTEM

ESTABLISHES PROCEDURES REGARDING THE STATEMENT ATTACHED TO CIRCULAR NO. 1687, OF 26.04.90.

WE COMMUNICATE THAT THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BRAZIL, IN A SESSION HELD ON 30.04.90, TAKING INTO ACCOUNT THE PROVISIONS OF CIRCULARS NOS. 1,663 AND 1,687, OF 11.04.90 AND 26.04.90, RESPECTIVELY, DECIDED:

ART. 1. THE FINANCIAL COSTS REFERRED TO IN ARTICLE 2 OF CIRCULAR NO. 1,663, OF 11.04.90, SHALL BE CALCULATED BY THE INSTITUTION ITSELF, APPLYING TO THE DAILY AVERAGE RATE THE DISCOUNT INDICATED BELOW:

• 2.0% (TWO PERCENT) PER YEAR FOR THE GROUPING OF CREDIT OPERATIONS;
• 0.0% (ZERO PERCENT) PER YEAR, FOR PUBLIC BONDS;
• 0.2% (TENTHS OF A PERCENT) PER YEAR, FOR PRIVATE BONDS; AND
• 1.0% (ONE PERCENT) PER YEAR, FOR ALL OTHER ASSETS.

SINGLE PARAGRAPH. FOR THE CALCULATION OF THE DAILY COST TO BE REPORTED TO THE CENTRAL BANK, THE FOLLOWING FORMULA SHALL BE USED:

D
C = A. ------, WHERE :
OC TPU TPR O
V + V + V + V

---

A = A + A + A + A , BEING:
OC TPU TPR O

_
A = ZERO OR A , WHICHEVER IS HIGHER;
OC OC

_
A = ZERO OR A , WHICHEVER IS HIGHER;
TPU TPU

_
A = ZERO OR A , WHICHEVER IS HIGHER; AND
TPR TPR

_
A = ZERO OR A , WHICHEVER IS HIGHER,
O O

BEING:

M/365
N OC 1+IJ M/365
A = SUM V .( ( (----) . (I) ) - ( (1+VAR.BTNF).(1,06) ) ) OC J=1 J 1,02

N TPU M/365 M/365
A = SUM V .( ( (1+IJ) . (I) ) - ( (1+VAR.BTNF).(1,06) ) ); TPU J=1 J

M/365
N TPR 1+IJ M/365
A = SUM V .( ( (-----) . (I) ) - ( (1+VAR.BTNF).(1,06) ) ) TPR J=1 J 1,002

M/365
N O 1+IJ M/365
A = SUM V .( ( (----) . (I) ) - ( (1+VAR.BTNF).(1,06) ) ), O J=1 J 1,01

WHERE:

I = (1 + VAR. INDEX);
C = DAILY COST TO BE REPORTED TO THE CENTRAL BANK; A = DAILY COST OF THE INSTITUTION'S ACTIVE OPERATIONS; D = AMOUNT OF THE DEFICIENCY WITH THE CENTRAL BANK;

OC
V = UPDATED VALUE UNTIL THE BUSINESS DAY IMMEDIATELY PRECEDING THE COST CALCULATION OF CREDIT OPERATIONS;

TPU
V = UPDATED VALUE UNTIL THE BUSINESS DAY IMMEDIATELY PRECEDING THE COST CALCULATION OF PUBLIC BONDS;

TPR
V = UPDATED VALUE UNTIL THE BUSINESS DAY IMMEDIATELY PRECEDING THE COST CALCULATION OF PRIVATE BONDS;

O
V = UPDATED VALUE UNTIL THE BUSINESS DAY IMMEDIATELY PRECEDING THE COST CALCULATION OF OTHER ACTIVE OPERATIONS;

SUM = SUMMATION;

VAR.INDEX = VARIATION OF THE OPERATOR OR TITLE INDEXER, OCCURRING BETWEEN THE BUSINESS DAY IMMEDIATELY PRECEDING AND THE DAY OF COST CALCULATION, CONSIDERING, IF APPLICABLE, THE DAILY PRORATA APPROPRIATION OF MONETARY CORRECTION;

VAR.BTNF = VARIATION OF THE NATIONAL TREASURY BONUS FOR FISCAL PURPOSES, OCCURRING BETWEEN THE BUSINESS DAY IMMEDIATELY PRECEDING AND THE DAY OF COST CALCULATION;

A = VALUE OF THE DAILY COST OF CREDIT OPERATIONS; OC

A = VALUE OF THE DAILY COST OF PUBLIC BONDS;
TPU

A = VALUE OF THE DAILY COST OF PRIVATE BONDS;
TPR

A = VALUE OF THE DAILY COST OF OTHER ACTIVE OPERATIONS; O

IJ = ANNUALIZED INTEREST RATE OF THE J-TH ACTIVE OPERATION;

J = J-TH OPERATION; AND

N = NUMBER OF OPERATIONS;

M = NUMBER OF CALENDAR DAYS, INCLUDING THE DAY OF THE COST DEBIT AND THE NON-BUSINESS DAYS IMMEDIATELY PRECEDING.

ART. 2. INSTITUTIONS HOLDING ACCOUNT 6110.01.10-6 - DEP. M.P. 168/90 - CASH BANK RESERVES SHALL REPORT, DAILY, TO THE CENTRAL BANK, VIA THE CENTRAL BANK INFORMATION SYSTEM - SISBACEN, THROUGH A TRANSACTION TO BE DISCLOSED OPPORTUNELY, THE VALUE OF THE DAILY COST REFERRED TO IN ARTICLE 1 OF THIS CIRCULAR, CONSOLIDATING ITS OWN COST WITH THAT OF ITS RESPECTIVE AFFILIATES.

§ 1. THE INFORMATION REFERRED TO IN THIS ARTICLE, AS WELL AS THOSE REFERRED TO IN ARTICLE 6 OF CIRCULAR NO. 1,687, THE VERACITY OF WHICH SHALL BE THE SOLE RESPONSIBILITY OF EACH INSTITUTION, SHALL BE PROVIDED WITH A MAXIMUM LAG OF THREE BUSINESS DAYS.

§ 2. IN THE CASE OF INFORMATION RELATIVE TO AN AFFILIATED INSTITUTION, THE RESPONSIBILITY FOR THE VERACITY OF THE INFORMATION LIES WITH THE AFFILIATED INSTITUTION ITSELF, HOLDING THE HOLDER OF THE "BANK RESERVES" ACCOUNT SOLELY AND EXCLUSIVELY RESPONSIBLE FOR THE EXACT TRANSMISSION OF THE RECEIVED INFORMATION.

ART. 3. AS A RESULT OF THE CONTENT OF THE PREVIOUS ARTICLES, INSTITUTIONS ARE EXEMPTED FROM FILLING IN THE "ANNUALIZED AVERAGE RATE" COLUMN OF ANNEX I OF THE SAID CIRCULAR NO. 1,687.

ART. 4. IF THE INSTITUTION PRESENTS A DEFICIENCY IN ITS ACCOUNT 6115.10.10-9 - CASH BANK RESERVES, ARISING FROM A DEBIT TRANSFERRED TO THE "LINKED" ACCOUNT REFERRED TO IN ARTICLE 7 OF CIRCULAR NO. 1,687, THE COST AND/OR FINES DUE SHALL BE CHARGED AT THE DAILY AVERAGE RATE REFERRED TO IN ARTICLE 1 OF THIS CIRCULAR OR AS PROVIDED IN THE REGULATIONS FOR DEPOSITS SUBJECT TO COMPULSORY DEPOSIT, WHICHEVER IS HIGHER.

ART. 5. THIS CIRCULAR SHALL ENTER INTO FORCE ON THE DATE OF ITS PUBLICATION.

BRASILIA (DF), APRIL 30, 1990.

LUIS EDUARDO ALVES DE ASSIS GUSTAVO JORGE LABOISSIERE LOYOLA DIRECTOR DIRECTOR