Circular No. 2001 — Conversion of New Cruzados pursuant to Ordinance No. 729 of July 31, 1991

CIRCULAR NO. 2001

CONVERTS NEW CRUZADOS IN ACCORDANCE WITH ORDINANCE NO. 729 OF JULY 31, 1991, OF THE MINISTRY OF ECONOMY, FINANCE AND PLANNING.

WE COMMUNICATE THAT THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BRAZIL, IN A MEETING HELD ON AUGUST 6, 1991, BASED ON THE PROVISIONS OF ART. 20 OF LAW NO. 8.024 OF APRIL 12, 1990, AND ORDINANCE NO. 729 OF JULY 31, 1991, OF THE MINISTRY OF ECONOMY, FINANCE AND PLANNING, DECIDED:

ART. 1. BALANCES IN NEW CRUZADOS NOT CONVERTED IN ACCORDANCE WITH ARTS. 5, 6 AND 7 OF LAW NO. 8.024 OF APRIL 12, 1990, REGARDLESS OF THE NUMBER OF ACCOUNT HOLDERS, SHALL BE CONVERTED INTO CRUZEIROS, EFFECTIVE AUGUST 15, 1991, AS FOLLOWS:

I - AT THEIR FULL VALUE, IF IT IS AN UPDATED BALANCE OF EQUAL TO OR LESS THAN NCZ$ 200,000.00 (TWO HUNDRED THOUSAND NEW CRUZADOS); OR

II - IN 13 (THIRTEEN) MONTHLY INSTALLMENTS, IN OTHER CASES, BEING:

A - THE FIRST, CORRESPONDING TO 1/13 (ONE THIRTEENTH) OF THE UPDATED BALANCE EXISTING ON THAT DATE, LIMITED TO CR$ 200,000.00 (TWO HUNDRED THOUSAND CRUZEIROS);

B - THE FOLLOWING, CORRESPONDING TO THE DIVISION OF THE UPDATED BALANCE EXISTING ON THE 15TH OF EACH MONTH BY THE NUMBER OF INSTALLMENTS TO BE CONVERTED.

PARAGRAPH 1. IN DETERMINING THE BALANCES ON AUGUST 15, 1991, FOR THE PURPOSE OF IDENTIFYING THE CONVERSION METHOD -- WHETHER UNDER ITEM I OR ITEM II OF THIS ARTICLE -- THE UPDATED VALUES EXISTING ON THAT DATE SHALL BE REDUCED BY THE UPDATED VALUES CORRESPONDING TO ANY CREDITS VERIFIED BETWEEN JULY 29, 1991, AND AUGUST 15, 1991, INCLUSIVE.

PARAGRAPH 2. IN MONTHS WHERE THE 15TH IS A NON-BUSINESS DAY, THE CONVERSION REFERRED TO SHALL TAKE PLACE ON THE IMMEDIATELY FOLLOWING BUSINESS DAY, AT THE UPDATED VALUE ON THAT DAY.

ART. 2. FOR THE PURPOSE OF CONVERSION, UNDER THE PREVIOUS ARTICLE, IT IS ESSENTIAL THAT THE FINANCIAL INSTITUTION HOLDING ACCOUNTS IN NEW CRUZADOS HAS PROCEEDED WITH THE UNIFICATION OF BALANCES OF THE SAME OWNERSHIP, AS ORIGINALLY PROVIDED IN ART. 2 OF CIRCULAR NO. 1,599 OF MARCH 18, 1990, NOW SUBJECT TO ART. 1 OF CIRCULAR NO. 1,960 OF MAY 23, 1991.

PARAGRAPH 1. IN THE EVENT OF CONVERSION EFFECTED AT A HIGHER AMOUNT DUE TO NON-OBSERVANCE OF THE NORM REFERRED TO IN THIS ARTICLE, IN ADDITION TO BEING OBLIGED TO REVERSE THE OPERATION, THE FAILING INSTITUTION SHALL BE SUBJECT TO PAYING THE CENTRAL BANK A FINE EQUIVALENT TO 10 (TEN) TIMES THE VALUE CONVERTED AT A HIGHER AMOUNT.

PARAGRAPH 2. IN CASES WHERE THE UNIFICATION OF BALANCES HAS NOT BEEN CARRIED OUT DUE TO PROVEN NON-EXISTENCE OF THE ACCOUNT HOLDER'S INDIVIDUAL TAXPAYER REGISTER NUMBER (CPF) IN THE INDIVIDUAL TAXPAYER REGISTER, THE CENTRAL BANK MAY EXEMPT THE INSTITUTION FROM THE OBLIGATION TO REVERSE THE OPERATION AND PAY THE FINE MENTIONED IN THE PREVIOUS PARAGRAPH, PROVIDED THAT SUCH NON-EXISTENCE RESULTS FROM A DISCRETION ESTABLISHED IN THE REGULATION IN FORCE AT THE TIME OF THE ACCOUNT OPENING.

ART. 3. MULTIPLE BANKS WITH COMMERCIAL, INVESTMENT AND/OR REAL ESTATE CREDIT PORTFOLIOS, COMMERCIAL BANKS, INVESTMENT BANKS, SAVINGS BANKS, REAL ESTATE CREDIT COMPANIES AND SAVINGS AND LOAN ASSOCIATIONS DEPOSITING RESOURCES IN NEW CRUZADOS ARE AUTHORIZED TO ESTABLISH INDIVIDUALIZED DEPOSIT ACCOUNTS, NON-NOTABLE BY CHECK, DESTINED EXCLUSIVELY FOR THE RECEIPT OF RESOURCES IN CRUZEIORS RESULTING FROM THE CONVERSIONS COVERED BY THIS CIRCULAR.

PARAGRAPH 1. THE TITLE SPECIAL REMUNERATED DEPOSITS - CONVERSIONS OF LAW NO. 8.024, CODE 4.1.6.50.00-0 (ATTRIBUTES UBISELM, ESTBAN 432 AND PUBLICATION 414), IS CREATED IN THE ACCOUNTING PLAN OF THE INSTITUTIONS OF THE NATIONAL FINANCIAL SYSTEM - COSIF, FOR THE PURPOSE OF REGISTERING THE RESOURCES CONSTITUTING THE DEPOSIT ACCOUNTS REFERRED TO IN THIS ARTICLE.

PARAGRAPH 2. THE OPENING AND MAINTENANCE OF THE ACCOUNTS REFERRED TO ARE MANDATORY IF IT IS A BALANCE EQUAL TO OR GREATER THAN CR$ 5,000.00 (FIVE THOUSAND CRUZEIROS) OR, EVEN IF LOWER THAN THAT VALUE, ALWAYS WHEN REQUESTED BY THE RESPECTIVE HOLDERS.

PARAGRAPH 3. THE RESOURCES DEPOSITED IN THE ACCOUNTS REFERRED TO MAY BE WITHDRAWN, PARTIALLY OR FULLY, ON THE SAME DAY AS REQUESTED BY THE RESPECTIVE HOLDERS, VIA CREDIT TO A CHECKING DEPOSIT ACCOUNT, TRANSFER TO ANOTHER INVESTMENT OF THE SAME OWNERSHIP WITHIN THE SAME FINANCIAL INSTITUTION OR ISSUANCE OF A NOMINAL CHECK, NON-TO ORDER, IN THEIR FAVOR.

PARAGRAPH 4. THE OBSERVANCE OF THE NORMS ESTABLISHED BY CIRCULAR NO. 1,528 OF AUGUST 24, 1989, IS WAIVED IN THE OPENING OF THE ACCOUNTS MENTIONED IN THIS ARTICLE, THE FINANCIAL INSTITUTION BEING RESPONSIBLE FOR ENSURING THE PERFECT IDENTIFICATION OF THE CLIENT AT THE TIME OF WITHDRAWALS.

ART. 4. THE RESOURCES DEPOSITED IN THE ACCOUNTS COVERED BY THE PREVIOUS ARTICLE SHALL BE REMUNERATED DAILY BY THE DAILY REFERENCE RATE - TRD INCREASED BY THE PRO RATA FRACTION CORRESPONDING TO INTEREST OF 8% (EIGHT PERCENT) PER ANNUM, ACCORDING TO A DAILY FACTOR TO BE PUBLISHED BY THE BOARD OF DIRECTORS OF NORMS AND ORGANIZATION OF THE FINANCIAL SYSTEM - DINOR, FOR WHOSE DETERMINATION THE CIVIL YEAR OF 365 DAYS SHALL BE CONSIDERED.

SINGLE PARAGRAPH. THE INTEREST RATE OF 8% (EIGHT PERCENT) PER ANNUM ESTABLISHED IN THIS ARTICLE SHALL BE GRADUALLY REDUCED UNTIL IT REACHES A RATE OF 6% (SIX PERCENT) PER ANNUM, AS FOLLOWS:

I - 7.5% (SEVEN AND FIVE TENTHS PERCENT) PER ANNUM, EFFECTIVE FEBRUARY 16, 1993;

II - 7.0% (SEVEN PERCENT) PER ANNUM, EFFECTIVE AUGUST 16, 1993;

III - 6.5% (SIX AND FIVE TENTHS PERCENT) PER ANNUM, EFFECTIVE FEBRUARY 16, 1994;

IV - 6.0% (SIX PERCENT) PER ANNUM, EFFECTIVE AUGUST 16, 1994.

ART. 5. THE RESOURCES CONSTITUTING THE DEPOSIT ACCOUNTS COVERED BY ART. 3 SHALL BE APPLIED AS FOLLOWS:

I - DEPOSIT WITH THE CENTRAL BANK, OBSERVING A MINIMUM PERCENTAGE OF 20% (TWENTY PERCENT) AS A MANDATORY DEPOSIT, REMUNERATED DAILY BY THE TRD INCREASED BY THE PRO RATA FRACTION CORRESPONDING TO INTEREST OF 8.5% (EIGHT AND FIVE TENTHS PERCENT) PER ANNUM, OBSERVING, REGARDING THIS ADDITION, THE REDUCTION SYSTEM PRESCRIBED IN THE SINGLE PARAGRAPH OF ART. 4, SO THAT THIS DEPOSIT HAS YIELD EQUIVALENT TO THAT DUE TO DEPOSITORS INCREASED BY THE PRO RATA FRACTION CORRESPONDING TO A RATE OF 0.5% (FIVE TENTHS PERCENT) PER ANNUM;

II - FEDERAL PUBLIC SECURITIES;

III - CENTRAL BANK BONDS (BBC) AND CENTRAL BANK NOTES (NBC);

IV - EFFECTIVE SEPTEMBER 16, 1991, SECURITIES ISSUED BY STATES AND MUNICIPALITIES ISSUED PRIOR TO JUNE 30, 1991, UP TO A MAXIMUM OF 10% (TEN PERCENT);

V - MINIMUM 10% (TEN PERCENT), AND MAXIMUM 20% (TWENTY PERCENT), IN RURAL CREDIT OPERATIONS FOR COSTING, COVERED BY ART. 1 OF CIRCULAR NO. 1,973 OF JUNE 13, 1991, AT INTEREST RATES NOT EXCEEDING THE DAILY REFERENCE RATE - TRD INCREASED BY INTEREST OF 18% (EIGHTEEN PERCENT) PER ANNUM, CONTRACTED EFFECTIVE AUGUST 15, 1991, EXCEPT IN THE CASE OF SAVINGS BANKS AND SAVINGS AND LOAN ASSOCIATIONS, OBSERVED THAT THE MINIMUM PERCENTAGE MUST BE DIRECTED TOWARDS THE COSTING OPERATIONS MENTIONED IN THE "CAPUT" OF ART. 1 OF CIRCULAR NO. 1,995 OF JULY 25, 1991.

PARAGRAPH 1. THE MAXIMUM PERCENTAGE PROVIDED FOR IN ITEM IV MAY BE RAISED TO UP TO 20% (TWENTY PERCENT), WHEN IT IS AN INVESTMENT CARRIED OUT BY PUBLIC STATE FINANCIAL INSTITUTIONS.

PARAGRAPH 2. THE DIFFERENCE BETWEEN THE MINIMUM PERCENTAGE REFERRED TO IN ITEM V AND THAT ACTUALLY APPLIED IN THE OPERATIONS REFERRED TO THEREIN:

A - MAY BE SUPPLIED WITH RURAL INTERBANK DEPOSIT - DIR, PROVIDED THAT THE DEPOSITORY INSTITUTION OBSERVES THE DIRECTIVE ESTABLISHED THEREIN; OR

B - SHALL BE ADDED TO THE MINIMUM REQUIREMENT FOR DEPOSIT WITH THE CENTRAL BANK ESTABLISHED IN ITEM I.

PARAGRAPH 3. IN THE CASE OF AN INSTITUTION AUTHORIZED TO CAPTURE RURAL SAVINGS DEPOSITS, THE APPLICATION OF THE RESOURCES REFERRED TO IN THE OPERATIONS REFERRED TO IN ITEM V MAY REACH A MAXIMUM OF 30% (THIRTY PERCENT).

PARAGRAPH 4. IN THE CASE OF MULTIPLE BANKS WITH REAL ESTATE CREDIT PORTFOLIOS, SAVINGS BANKS, REAL ESTATE CREDIT COMPANIES AND SAVINGS AND LOAN ASSOCIATIONS, THE RESOURCES CONSTITUTING THE DEPOSIT ACCOUNTS COVERED BY ART. 3 MAY BE BACKED BY REAL ESTATE FINANCING OPERATIONS CONTRACTED UNTIL MARCH 15, 1990, UP TO THE UPDATED AMOUNT OF THE INSUFFICIENCY IN THE DEPOSIT OF NEW CRUZADOS WITH THE CENTRAL BANK, OBSERVED THE FOLLOWING:

A - BETWEEN AUGUST 15 AND SEPTEMBER 14, 1991 - THE CORRESPONDING TO THE RESULT OF THE APPLICATION OF THE EFFECTIVE CONVERSION PERCENTAGE RELATIVE TO THE FIRST INSTALLMENT ON THE AMOUNT OF INSUFFICIENCY VERIFIED ON AUGUST 14, 1991, UPDATED DAILY BY THE TRD INCREASED BY THE PRO RATA FRACTION CORRESPONDING TO INTEREST OF 8% (EIGHT PERCENT) PER ANNUM;

B - BETWEEN SEPTEMBER 15 AND OCTOBER 14, 1991 - THE CORRESPONDING TO THE PREVIOUS ALINÉA INCREASED BY 1/12 (ONE TWELFTH) OF THE UPDATED AMOUNT OF INSUFFICIENCY VERIFIED ON SEPTEMBER 14, 1991;

C - BETWEEN OCTOBER 15, 1991 AND NOVEMBER 14, 1991 - THE CORRESPONDING TO THE PREVIOUS ALINÉA INCREASED BY 1/11 (ONE ELEVENTH) OF THE UPDATED AMOUNT OF INSUFFICIENCY VERIFIED ON OCTOBER 14, 1991,

D - AND SO ON SUCCESSIVELY UNTIL, EFFECTIVE AUGUST 15, 1992, THE TOTAL DESTINED TO THE OPERATIONS REFERRED TO CORRESPONDS TO 100% (ONE HUNDRED PERCENT) OF THE UPDATED AMOUNT OF INSUFFICIENCY IN THE DEPOSIT OF NEW CRUZADOS VERIFIED ON AUGUST 14, 1992.

ART. 6. THIS CIRCULAR ENTERS INTO FORCE ON THE DATE OF ITS PUBLICATION.

BRASÍLIA (DF), AUGUST 6, 1991

GUSTAVO JORGE LABOISSIÈRE LOYOLA PEDRO LUIZ BODIN DE MORAES DIRECTOR DIRECTOR

NOTE: RE-TRANSMITTED DUE TO ADJUSTMENT IN ITEM V OF ART. 5