Circular OPASI 2 - 168. Deposit Guarantee Fund. Calculation of the contribution correction index based on CAMEL rating — BCRA — AR

BANCO CENTRAL DE THE REPUBLIC OF ARGENTINA __________________________________________________________________ COMMUNICATION "A" 2561 11/07/97 __________________________________________________________________ TO FINANCIAL ENTITIES:
Ref.: Circular
OPASI 2 - 168.
Deposit Guarantee Fund.
Calculation of the correction index of contributions based on "CAMEL" rating

We address you to inform you that this Institution adopted the following resolution:
"- Establish that the rating that the Superintendence of Financial Entities and Currency assigns to the financial entity will be considered for the calculation (Indicator "Icamel") of the contributions to the Deposit Guarantee Fund that are due starting from the third month following that in which the relevant notification takes place. Financial entities that have been informed of their rating by 30.6.97 will use it for the determination of contributions due from September of 1997."

The sheets replacing the text of Annex II to Communication "A" 2337, previously made known, are attached. We greet you very respectfully. BANCO CENTRAL DE THE REPUBLIC OF ARGENTINA Juan Carlos Isi Alfredo A. Besio Deputy Manager of Standards Manager of Standards for for Financial Entities Financial Entities

ANNEX: 3 sheets

The normal contribution will be corrected according to the result yielded
for each entity by an index that will fluctuate between 1 and 2. This index will be constructed based on the factors indicated in point 3 of Annex I and will arise from the following expression:
Ic = {(Ipr/f + Iar/a + 2*Icamel)/4} - Irpc/Kmin where Ipr/f : indicator referred to in point 3.3.1 of
Annex I, which will take the value arising from the
following expression:
Ipr/f = (Vi/0.04) * 1.20 where
Vi : ratio between the minimum provisions for risk of uncollectibility required according to the norms contained in Annex II to Communication "A" 2216 and the total financing included (first paragraph of Annex I to said Communication). This concept includes the balances of guarantees granted for obligations assumed on behalf of third parties, registered on the last day of the month in question, according to the classification reported in the statement of position of debtors. The value of the index will be bounded between 1 and 2.5. That is, in cases where the result of the expression is, respectively, lower or higher than those lower and upper limits, 1 or 2.5 will be taken, as appropriate. +----------------+------------------+--------------+-------------+ I Version: 2nd. I Communication I Validity I Page 1 I "A" 2561 I 11.7.97 I I +----------------+------------------+--------------+-------------+

+----------+-------------------------------------+---------------+ I IWEIGHTING FACTORS FOR THE ADDITIONAL CONTRIBUTION TO-I Annex II B.C.R.A. IDETERMINATION OF THE ADDITIONAL CONTRIBUTION I to the I TOTAL MONTHLY I Com. "A" 2337 I +----------+-------------------------------------+---------------+ Iar/a : indicator referred to in point 3.3.2 of
Annex I, which will take the value arising from the
following expression:
Iar/a = (Vi/0.70) * 1.30 where
Vi : ratio between the risk assets of the entity and the total assets. Risk assets are defined as the sum of the concepts "Ais", "Aif", "Vrf" and "Vrani" -in these two last cases computed by their weighted value- in the terms referred to in point 1.1 of Communication "A" 2136 and as total assets to the sum of the concepts "Ais", "Aif", "f" and of other non-realized assets not included in "f" -included in "Vrani". The value of the index will be bounded between 1 and 2. It means that in cases where the result of the expression is, respectively, lower or higher than those lower and upper limits, 1 or 2 will be taken, as appropriate. Icamel : indicator referred to in point 3.1 of
Annex I. The value arising from the
following table will be taken:
Rating Index
1 1.00
2 1.33
3 1.66
4 2.00
5 2.00
+----------------+------------------+--------------+-------------+ I Version: 2nd. I Communication I Validity I Page 2 I "A" 2561 I 11.7.97 I I +----------------+------------------+--------------+-------------+

+----------+-------------------------------------+---------------+ I IWEIGHTING FACTORS FOR THE ADDITIONAL CONTRIBUTION TO-I Annex II B.C.R.A. IDETERMINATION OF THE ADDITIONAL CONTRIBUTION I to the I TOTAL MONTHLY I Com. "A" 2337 I +----------+-------------------------------------+---------------+ The rating that the Superintendence of Financial Entities and Currency assigns to the financial entity will be considered for the calculation of contributions to the Deposit Guarantee Fund that are due starting from the third month following that in which the relevant notification takes place. Irpc/Kmin: indicator referred to in point 3.2 of Annex
I. The value arising from the following
table will be taken:
RPC/minimum capital requirement ratio Index less than 0.90 - 0.50 more than 0.90 to 0.95 - 0.25 more than 0.95 to 1.00 - 0.10 more than 1.00 to 1.10 0.00 more than 1.10 to 1.20 + 0.05 more than 1.20 to 1.30 + 0.10 more than 1.30 to 1.50 + 0.20 greater than 1.50 + 0.30 The value of the index Ic will be bounded between 1 and 2. That is, in cases where the result of the expression is, respectively, lower or higher than those lower and upper limits, 1 or 2 will be taken, as appropriate. For the calculation of the ratios, the amounts corresponding to the third month prior to the date of due date of the contributions will be considered.
2. As long as the rating of the Superintendence of
Financial Entities and Currency ("CAMEL") is not available, the calculation of the correction index will arise from the following expression:
Ic = {(Ipr/f + Iar/a)/2} - Irpc/Kmin +----------------+------------------+--------------+-------------+ I Version: 2nd. I Communication I Validity I Page 3 I "A" 2561 I 11.7.97 I I +----------------+------------------+--------------+-------------+

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