Circular No. 1724 — Updates Demonstration for Calculating Deficiency Limit in New Cruzados and Establishes Penalties for Late Information Submission

CIRCULAR NO. 001724

TO

FINANCIAL INSTITUTIONS OF THE NATIONAL FINANCIAL SYSTEM

UPDATES THE DEMONSTRATION FOR THE CALCULATION OF THE DEFICIENCY LIMIT IN NEW CRUZADOS REFERRED TO IN CIRCULARS NOS. 1,663 AND 1,687, OF APRIL 11 AND 20, 1990, RESPECTIVELY, AND ESTABLISHES A PENALTY FOR DELAY IN THE SUBMISSION OF INFORMATION.

WE COMMUNICATE THAT THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BRAZIL, IN A SESSION HELD ON MAY 10, 1990, TAKING INTO ACCOUNT THE PROVISIONS OF CIRCULARS NOS. 1,663, 1,687 AND 1,702, OF APRIL 11, 20 AND 30, 1990, RESPECTIVELY, DECIDED:

ART. 1. TO ESTABLISH THE ATTACHED DEMONSTRATIONS FOR THE CALCULATION OF THE LIMIT OF DEFICIENCY IN NEW CRUZADOS REFERRED TO IN ARTICLE 3 OF CIRCULAR NO. 1,663, OF APRIL 11, 1990, IN SUBSTITUTION FOR THAT PROVIDED IN ARTICLE 2 OF CIRCULAR NO. 1,687, OF APRIL 20, 1990.

PARAGRAPH 1. IN THE CALCULATION OF LIMIT I REFERRED TO IN ART. 3 OF CIRCULAR NO. 1,663, THE FOLLOWING SHALL BE DEDUCTED:

A - IN THE POSITION WITH A BASE DATE OF APRIL 30, 1990, 50% (FIFTY PERCENT) OF THE TOTAL OF CONVERSIONS CARRIED OUT, UP TO THE DATE OF PUBLICATION OF THIS CIRCULAR, VIA TRANSACTION PRES 800 OF THE CENTRAL BANK INFORMATION SYSTEM - SISBACEN;

B - FROM THE POSITION WITH A BASE DATE OF MAY 15, 1990, THE TOTALITY OF THE CONVERSIONS CARRIED OUT, UP TO THE RESPECTIVE BASE DATE, VIA TRANSACTION PRES 800 OF THE CENTRAL BANK INFORMATION SYSTEM - SISBACEN.

PARAGRAPH 2. THE DEMONSTRATIONS REFERRED TO IN THE "CAPUT" OF THIS ARTICLE, DULY SIGNED BY TWO DIRECTORS IN OFFICE, SHALL BE FORWARDED TO THE CENTRAL BANK ATTACHED TO THE STANDARD LETTER MODEL ATTACHED AS ANNEX I.

PARAGRAPH 3. THE DEMONSTRATIONS NOW ESTABLISHED SHALL BECOME EFFECTIVE FOR POSITIONS RELATING TO THE CALCULATION BASE OF APRIL 30, 1990 AND SUBSEQUENT.

ART. 2. WITH REGARD TO THE FILLING OUT OF THE ATTACHED DEMONSTRATIONS, IT IS OBSERVED THAT:

I - BALANCES SHALL BE CONSIDERED AT THEIR PRESENT VALUE, EXCLUDING INCOME/EXPENSES TO BE APPROPRIATED, EXCEPT FOR LEASING OPERATIONS;

II - CREDIT OPERATIONS GRANTED, WITH AND WITHOUT JOINT LIABILITY, SHALL BE COMPUTED IN THE ASSIGNEE INSTITUTION, EXCLUDED IN THE ASSIGNOR.

ART. 3. INSTITUTIONS NOT HOLDING ACCOUNT 6110.01.10-6 - DEP. M.P. 168 - BANKING RESERVES - IN CASH WITH THE CENTRAL BANK SHALL DELIVER THE DAILY DATA AND THE BIWEEKLY DEMONSTRATIONS TO THEIR RESPECTIVE SPONSOR INSTITUTION.

SINGLE PARAGRAPH. IT SHALL BE THE RESPONSIBILITY OF THE SPONSOR INSTITUTION (HOLDER OF ACCOUNT 6110.01.10-6 - DEP. M.P. 168 - BANKING RESERVES - IN CASH) TO CONSOLIDATE THE DATA OF ITS OWN AND ITS SPONSORED INSTITUTIONS AND DELIVER/REPORT THEM TO THE CENTRAL BANK ON THE DUE DATES, USING:

A - THE STANDARD LETTER MODEL MENTIONED IN PARAGRAPH 2 OF ART. 1 OF THIS CIRCULAR, IN THE CASE OF BIWEEKLY DEMONSTRATIONS;

B - TRANSACTION PREN 500 OF THE CENTRAL BANK INFORMATION SYSTEM - SISBACEN, IN THE CASE OF DAILY INFORMATION.

ART. 4. IN THE EVENT THAT THE DEMONSTRATIONS REFERRED TO IN ART. 1 OF THIS CIRCULAR AND/OR THE DAILY DATA ARE NOT DELIVERED/REPORTED ON THE DUE DATES, THE CENTRAL BANK SHALL APPLY THE FOLLOWING SANCTIONS, INDEPENDENTLY OF OTHERS APPLICABLE TO THE CASE:

I - TO THE INSTITUTION:

A - FREEZING OF 100% (ONE HUNDRED PERCENT) OF COMPULSORY LIABILITIES ON DEMAND AND NOTICE DEPOSITS IN THE PERIOD OF MOVEMENT FOLLOWING THE EVENT;

B - LOSS OF THE FACULTY FOR PIONEER AGENCIES NOT TO COLLECT COMPULSORY RESERVES;

C - CONDITIONING OF ANY AUTHORIZATION WITHIN THE OTHER UNITS OF THE CENTRAL BANK TO PRIOR CONSULTATION WITH THE DEPARTMENT OF BANKING OPERATIONS (DEBAN);

D - MONETARY FINE OF UP TO 200 (TWO HUNDRED) TIMES THE HIGHEST REFERENCE VALUE (MVR) IN EFFECT, FOR EACH IRREGULARITY.

II - FOR ADMINISTRATORS, THE INFRACTION SHALL BE CONSIDERED A SERIOUS OFFENSE FOR THE PURPOSES OF ART. 44, PARAGRAPH 4, OF LAW NO. 4,595, OF DEC. 31, 1964, IF NO FORMAL JUSTIFICATION IS PRESENTED WITHIN 5 (FIVE) BUSINESS DAYS AFTER THE OCCURRENCE.

PARAGRAPH 1. UNTIL MAY 18, 1990, EXCEPTIONALLY, THE CENTRAL BANK SHALL IMPOSE ON THE MISSING INSTITUTION ONLY A MONETARY FINE OF 50 (FIFTY) TIMES THE HIGHEST REFERENCE VALUE (MVR) IN EFFECT, PER DAY OF DELAY IN DAILY INFORMATION VIA TRANSACTION PREN 500.

PARAGRAPH 2. THE SPONSOR INSTITUTION SHALL IMMEDIATELY INFORM, VIA ELECTRONIC MAIL, THROUGH THE CENTRAL BANK INFORMATION SYSTEM - SISBACEN, THE SPONSORED INSTITUTIONS THAT FAIL TO PRESENT TO IT THE DAILY DATA AND/OR BIWEEKLY DEMONSTRATIONS, FOR THE PURPOSE OF ADOPTION OF APPROPRIATE MEASURES BY THE CENTRAL BANK.

PARAGRAPH 3. IF THE SPONSOR INSTITUTION DOES NOT COMMUNICATE, ON THE DUE DATES, TO THE CENTRAL BANK THE OMISSION OF ITS SPONSORED INSTITUTIONS, THE SANCTIONS PROVIDED IN THE "CAPUT" OF THIS ARTICLE SHALL BE APPLIED TO BOTH THE SPONSOR INSTITUTION AND THE RESPECTIVE SPONSORED INSTITUTION.

ART. 5. THE VALUE REFERRED TO IN ALINÉA "B" OF ART. 1 OF LETTER-CIRCULAR NO. 2,078, OF APRIL 30, 1990, RELATING TO THE PERIOD FROM MARCH 19 TO APRIL 30, 1990, MAY, OPTIONALLY, BE REPORTED, VIA PREN 500 OF THE CENTRAL BANK INFORMATION SYSTEM - SISBACEN, UNTIL JUNE 29, 1990.

PARAGRAPH 1. IN THE CASE OF USE OF THE OPTION PROVIDED IN THE "CAPUT" OF THIS ARTICLE, THE VALUE SHALL BE CORRECTED, FROM THE DATE OF THE GENERATING EVENT UNTIL THE DATE OF ITS REPORTING, BY THE REMUNERATION RATE OF FINANCIAL BONDS OF THE TREASURY (LFT), OCCURRED IN THE RESPECTIVE PERIOD, AND DEBITED ON THE DATE OF REPORTING ITSELF, WITHOUT ACCRUAL.

PARAGRAPH 2. INSTITUTIONS THAT DO NOT OPT FOR THE FACULTY REFERRED TO IN THIS ARTICLE SHALL REPORT THE RESPECTIVE VALUE FOR EACH DATE, OF THE PERIOD FROM MARCH 19 TO APRIL 30, 1990, IMPERATIVELY, UNTIL MAY 11, 1990, AS ESTABLISHED IN ART. 3 OF LETTER-CIRCULAR NO. 2,078, OF APRIL 30, 1990, HAVING THEIR VALUES DEBITED RETROACTIVELY FOR THE DATES OF THE GENERATING EVENTS.

ART. 6. INDEPENDENTLY OF THE OPTION FOR THE FACULTY PROVIDED IN ART. 5 OF THIS CIRCULAR, THE DAILY INFORMATION RELATING TO ALINÉA "A" OF ART. 1 OF LETTER-CIRCULAR NO. 2,078, OF APRIL 30, 1990, SHALL BE REPORTED, RIGOROUSLY, ON THE DATES PROVIDED IN THAT LETTER-CIRCULAR, THAT IS:

I - THE INFORMATION PERTAINING TO THE PERIOD FROM MARCH 19 TO APRIL 30, 1990, UNTIL MAY 11, 1990; AND

II - THE INFORMATION SUBSEQUENT TO APRIL 30, 1990, UNTIL THE 3RD (THIRD) BUSINESS DAY SUBSEQUENT TO THE RESPECTIVE DATES TO WHICH THEY REFER.

ART. 7. ALTERNATIVELY TO THE USE OF THE FORMULA CONTAINED IN ART. 1 OF CIRCULAR NO. 1,702, RELATING TO THE CALCULATION OF THE DAILY COST OF CREDIT OPERATIONS (AOC) AND THE DAILY COST OF OTHER ACTIVE OPERATIONS (AO), INSTITUTIONS MAY ADOPT THE FOLLOWING SCHEME:

I - FOR OPERATIONS INDEXED IN CONSUMER PRICE INDEX (IPC), STANDARD CAPITAL UNIT (UPC), BY EXCHANGE RATE VARIATION, SAVINGS BOOK INDEX OR ANY OTHER PRICE INDEX, APPLY PRO-RATA DIE VARIATION OF THE CONSUMER PRICE INDEX (IPC) OF THE CURRENT MONTH, INCREASED BY:

A - 12% (TWELVE PERCENT) PER YEAR, IN THE CASE OF HOUSING LOANS;

B - 35% (THIRTY-FIVE PERCENT) PER YEAR, IN THE CASE OF AGRICULTURAL CREDIT;

C - 60% (SIXTY PERCENT) PER YEAR, IN THE OTHER CASES.

II - FOR OPERATIONS INDEXED IN NATIONAL TREASURY BONDS (BTN), PRO-RATA DIE VARIATION OF THE NATIONAL TREASURY BONDS (BTN) OF THE CURRENT MONTH, INCREASED BY 60% (SIXTY PERCENT) PER YEAR;

III - FOR OPERATIONS INDEXED IN FISCAL NATIONAL TREASURY BONDS (BTNF), VARIATION OF THE FISCAL NATIONAL TREASURY BONDS (BTNF), INCREASED BY 60% (SIXTY PERCENT) PER YEAR, EXCEPT IN THE CASE OF AGRICULTURAL CREDIT, WHERE THE RATE SHALL BE 35% (THIRTY-FIVE PERCENT) PER YEAR;

IV - FOR FIXED-RATE OPERATIONS, A RATE OF 3% (THREE PERCENT) PER DAY, INCLUDING NON-BUSINESS DAYS;

V - FOR OTHER CASES, A RATE OF 4% (FOUR PERCENT) PER DAY, INCLUDING NON-BUSINESS DAYS.

SINGLE PARAGRAPH. FROM MAY 1, 1990, FOR THE CASES PROVIDED FOR IN ITEMS I AND II OF THIS ARTICLE, THE SUBSTITUTION OF THE RESPECTIVE INDEXERS BY THE VARIATION OF THE FINANCIAL BONDS OF THE TREASURY (LFT) MAY BE ADOPTED.

ART. 8. ANY EXCESSES IN NEW CRUZADOS OF AN INSTITUTION MAY NOT COVER DEFICIENCIES OF ANOTHER, UNLESS IT IS A MATTER OF INSTITUTIONS OF THE SAME CONGLOMERATE, IN WHICH CASE THE TRANSFER SHALL OBEY THE RULES OF CIRCULAR NO. 1,672, OF APRIL 18, 1990.

ART. 9. INSTITUTIONS THAT MAY HAVE EFFECTED INVALID CONVERSIONS SHALL PROVIDE, IMMEDIATELY, FOR THEIR REVERSAL AND COMMUNICATE TO THE DEPARTMENT OF BANKING OPERATIONS (DEBAN) OR ITS REGIONAL REPRESENTATIONS, SO THAT THE RESPECTIVE ADJUSTMENT MAY BE PROCEDURED, BY DEBIT IN ACCOUNT 6115.10.10-9 - BANKING RESERVES - IN CASH AND CORRESPONDING CREDIT IN ACCOUNT 6110.01.10-6 - DEP. M.P. 168 - BANKING RESERVES - IN CASH.

ART. 10. ACCOUNT 6110.01.10-6 - DEP. M.P. 168 - BANKING RESERVES - IN CASH MAY NOT SHOW A DEBIT BALANCE.

SINGLE PARAGRAPH. IN THE EVENT OF A DEBIT BALANCE IN THE ACCOUNT MENTIONED IN THE "CAPUT" OF THIS ARTICLE, THE CENTRAL BANK SHALL TRANSFER FROM ACCOUNT 6115.10.10-9 - BANKING RESERVES - IN CASH, IN A DEFINITIVE MANNER, THE AMOUNT OF CRUZEIROS NECESSARY TO COVER THE DEFICIT IN NEW CRUZADOS.

ART. 11. PARAGRAPH 2 OF ARTICLE 7 OF CIRCULAR NO. 1,663, OF APRIL 11, 1990, SHALL BECOME EFFECTIVE WITH THE FOLLOWING WORDING:

"ART. 7. ......

PARAGRAPH 2. THE PROVISIONS OF THIS ARTICLE DO NOT APPLY TO THE CASES PROVIDED FOR IN CIRCULARS NOS. 1,614 AND 1,619, OF MARCH 22 AND 23, 1990, RESPECTIVELY."

ART. 12. THIS CIRCULAR SHALL ENTER INTO FORCE ON THE DATE OF ITS PUBLICATION.

ART. 13. ARTICLE 3 OF CIRCULAR NO. 1,720, OF MAY 9, 1990, IS REPEALED.

BRASÍLIA (DF), MAY 10, 1990

GUSTAVO JORGE LABOISSIÈRE LOYOLA LUIS EDUARDO ALVES DE ASSIS DIRECTOR DIRECTOR

ANNEX TO CIRCULAR NO. 1,724, OF MAY 10, 1990 ANNEX I
STANDARD MODEL

(PLACE AND DATE)

TO
CENTRAL BANK OF BRAZIL

CIRCULARS NOS. 1663, 1687 AND 1724 - WE FORWARD THE ATTACHED DEMONSTRATIONS, RELATING TO THE LIMITS OF THIS AND THE FOLLOWING INSTITUTIONS, BASE DATE OF / / :

INSTITUTIONS LIMITS (I OR II, THE LOWER)

BANK
BCO.INDL.COML.INVEST.
ABC-CFI
ABC-CCVM
ABC-DTVM
ABC-AR.MERCANTIL
ABC-CRÉD.IMOBILIÁRIO

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TOTAL

STAMP/SIGNATURES OF TWO DIRECTORS IN OFFICE (IDENTIFIED)

ANNEX TO CIRCULAR NO. 1,724, OF MAY 10, 1990 ANNEX II

CADOC CODE:

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

POSITION:
VALIDITY PERIOD:

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

======
BALANCE OF ACCOUNT 4.6.1.85.00-6 -
LIABILITIES FOR INSUFFICIENCY
IN COLLECTION - M.P. 168/90 NCZ$

LESS (VALUE OF CONVERSIONS,
ACCORDING TO PARAGRAPH 1
OF CIRCULAR NO. 1,724, OF
MAY 10, 1990). NCZ$

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LIMIT 1 ...... NCZ$
(IF NEGATIVE, CONSIDER ZERO)

======

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

======
A = SUM OF OPERATIONS
ACTIVE, IN NEW CRUZ-
ADOS, DESCRIBED, RELATED
AND DISCRIMINATED
IN ANNEX III: NCZ$

P = SUM OF OPERATIONS
PASSIVE, IN NEW CRUZ-
ADOS, RELATED IN
ANNEX III: NCZ$

CGP = OWN WORKING CAPITAL,
OBTAINED AS FOLLOWS:
ADJUSTED EQUITY - PERMANENT ASSET NCZ$

---

LIMIT 2 = A - (P + CGP) ....... NCZ$
(IF NEGATIVE, CONSIDER ZERO)

======
MAXIMUM DEFICIENCY LIMIT:
(THE LOWER AMONG LIMITS 1 AND 2
CALCULATED ABOVE) NCZ$

PLACE/DATE/STAMP/SIGNATURES

OBS.: WHEN ONE OF THE LIMITS IS EQUAL TO ZERO, THE FILLING OUT OF ANNEX III IS WAIVED.
ANNEX TO CIRCULAR NO. 1,724, OF MAY 10, 1990 ANNEX III
ACTIVE OPERATIONS IN NCZ$

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COSIF ACCT NO. VALUE
------+------
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
------+------
1.4.2.10.00-6
------+------
1.4.2.25.00-8
------+------
1.4.2.35.00-5
------+------
1.4.2.40.00-7
------+------
1.4.2.45.00-2
------+------
1.4.2.50.00-4
------+------
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
------+------
1.4.4.10.00-2
------+------
1.4.4.20.00-9
------+------
1.4.4.40.00-3
------+------
1.4.4.50.00-0
------+------
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
------+------
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
------+------
1.6.7.10.00-9
------+------
1.6.7.20.00-6
------+------
1.6.7.35.00-8
------+------
1.6.7.60.00-4
------+------
1.6.8.00.00-5 ( )
------+------
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
------+------
1.7.7.10.00-8
------+------
1.7.7.20.00-5
------+------
1.7.8.00.00-4
------+------
1.8.2.00.00-5
------+------
1.8.8.10.00-0
------+------
1.8.8.35.00-9
------+------
1.8.8.40.00-1
------+------
1.8.8.80.00-9
------+------
1.8.8.85.00-4
------+------
1.8.8.90.00-6
------+------
1.8.8.92.00-4
------+------
T O T A L

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PASSIVE OPERATIONS IN NCZ$

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
------+------
4.1.6.30.00-6
------+------
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 ( ) ------+------ 4.4.3.10.00-0 ------+------ 4.4.4.10.00-3 ------+------ 4.4.4.20.00-0 ------+------ 4.4.4.40.00-4 ------+------ 4.4.4.50.00-1 ------+------ 4.6.2.10.00-5 ------+------ 4.6.2.30.00-9 ------+------ 4.6.3.10.00-8 ------+------ 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 ------+------ 4.9.2.00.00-5 ------+------ 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 ------+------ 4.9.9.85.00-7 ------+------ 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 ------+------ 6.2.1.50.00-8 ------+------ 6.2.1.60.00-5 ------+------ 6.2.1.80.00-9 ------+------ 6.2.1.90.00-6 ------+------ T O T A L

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