Circular OPASI 2 - 200. Deposit Guarantee Insurance System. Consolidated Text — BCRA — AR

1998 - Year of the Municipalities
CENTRAL BANK OF THE ARGENTINE REPUBLIC
__________________________________________________________________ COMMUNICATION "A" 2807 19/11/98 __________________________________________________________________ TO FINANCIAL ENTITIES:
Ref.: Circular
OPASI 2 - 200.
Deposit Guarantee Insurance System.
Consolidated Text

We address you to deliver the consolidated text of the provisions issued by this Institution for the application of the aforementioned regime, which includes the adjustment to the new amount covered by the guarantee (Decree 1127/98).

We point out that the calculation of immobilized balances for the calculation of the contribution to the deposit guarantee fund will apply to those to be made from February 1999.

Likewise, Article 1 of Law 24.485 and the updated text of its regulatory decree (540/95) are transcribed.

We salute you attentively.
CENTRAL BANK OF THE ARGENTINE REPUBLIC
Juan Carlos Isi Alfredo A. Besio
Deputy Manager of Standards Deputy Manager of Standards for Financial Entities for Financial Entities

APPENDICES

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Index -

SEDESA shareholder trust.
Normal contribution.
Additional contribution.
Integration of contributions.
Scope of the guarantee.
5.1. Deposits included.
5.2. Exclusions.
5.3. Coverage. Amount and formalities.
Instrumentation.
Determination of the additional contribution.
7.1. Entities with "CAMEL" rating.
7.2. Entities without "CAMEL" rating.
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SEDESA shareholder trust.
The participation in the trust that acts as shareholder of the company Seguro de Depósitos S.A. (SEDESA) arises from providing the contribution effectively made by each entity regarding the contributions collected from the entire system, corresponding to each calendar year. The non-exercise of the option to participate by an entity will determine the proportional increase in the participation of the other entities.
Normal contribution.
The entities covered by the Financial Entities Law must monthly allocate to the Deposit Guarantee Fund a normal contribution equivalent to 0.03% of their monthly average of daily balances of the items listed in point 5.1., registered in the second month immediately preceding. For these purposes, the Bank of the Argentine Nation will adhere to what is provided in the second paragraph of Article 6 of Decree 540/95 (text according to Decree 1292/96 - article 3).

The Central Bank may require the integration, as an advance, of the equivalent of up to twenty-four (24) minimum normal contributions, with a notice of no less than thirty (30) calendar days, to cover resource needs of the Fund.

Additional contribution.
In addition to the normal contribution referred to in point 2., entities must make an additional differentiated contribution depending on the result obtained from the weighting of the following factors, based on the methodology contained in point 7.

3.1. The rating assigned to the entity according to the evaluation carried out by the Superintendence of Financial and Exchange Entities.
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3.2. The ratio of excess integration of computable patrimonial responsibility regarding the minimum capital requirement. For this effect, to the computable patrimonial responsibility, provisions for uncollectible risk constituted in excess of the minimums established in the rules on debtor classification and minimum provisions for uncollectibility will be added.

3.3. The quality of the active portfolio measured by:
3.3.1. Minimum provisions required for uncollectible risk regarding financings.
3.3.2. Computable assets to determine the minimum required capital, weighted according to what is established in the rules on minimum capitals of financial entities, regarding total assets.

The additional contribution resulting from the application of the aforementioned factors cannot exceed once the normal contribution.

Integration of contributions.
The contributions must be deposited no later than the 12th day of the month to which they correspond, in the account designated by SEDESA, according to the operational regime applicable in the matter.

The Central Bank may debit ex officio, from the current account opened at this Institution, the normal, additional, or advance contributions that are not integrated in a timely manner.

In the case that updated information is not available to establish the relevant calculation base, the amount will be determined based on the last available data, increasing the obtained base by 10%.
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5. Scope of the guarantee.
5.1. Deposits included.
The coverage offered by the system will cover deposits in pesos and foreign currency constituted in participating entities in the form of:
5.1.1. Current account.
5.1.2. Savings account.
5.1.3. Time deposit.
5.1.4. Specials (point 4 of Chapter I of Circular OPASI - 2).
5.1.5. Term investments (Communication "A" 2482 and complementary).
5.1.6. Immobilized balances arising from the preceding concepts.

5.2. Exclusions.
5.2.1. Transferable time deposits whose ownership has been acquired by endorsement, even if the last endorsee is the original depositor.
5.2.2. Deposits captured through systems that offer incentives or additional stimuli to the agreed interest rate, regardless of the denomination or form they adopt (insurance, lotteries, tourism, service provision, etc.).
5.2.3. Deposits in which interest rates higher than the reference rates are agreed, which are periodically disseminated by the Central Bank for time deposits and checking account balances (current account and savings account) through the "STAF", determined by adding two percentage points annually to the moving average of the last five banking days of the passive rates resulting from the survey carried out by the Central Bank.
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5.2.4. Deposits of financial entities in other intermediaries, including time deposit certificates acquired through secondary negotiation.
5.2.5. Deposits made by persons directly or indirectly linked to the entity according to the guidelines defined in point 4.2 of Chapter I of Circular OPRAC - 1 and in point 1.1 of Annex I to Communication "A" 2140.
5.2.6. Time deposits of securities, acceptances, or guarantees.
5.2.7. Immobilized balances arising from excluded deposits and other operations.

5.3. Coverage. Amount and formalities.
5.3.1. The guarantee will cover the return of the deposited capital and its interest, accrued up to the date of revocation of the authorization to operate or up to the date of suspension of the entity due to the application of Article 49 of the Organic Charter of the Central Bank, if this measure had been adopted prior to that, without exceeding -for both concepts- $ 30,000.

5.3.2. In accounts and deposits constituted in the name of two or more persons, the guarantee limit will be $ 30,000, regardless of the number of titular holders, distributing proportionally the amount of the guarantee that corresponds among the holders.
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5.3.3. The total guaranteed to a specific person, by accumulation of accounts and deposits covered by the coverage, as provided previously, cannot exceed the limit of $ 30,000 established in Article 13 of Decree 540/95, (text according to Decree 1127/98).

5.3.4. SEDESA will reject or postpone until its judicial recognition the request for coverage under this guarantee regime when the deposits do not meet the requirements established in the applicable rules or when the depositors do not exhibit titles that are materially and formally valid.

5.3.5. SEDESA may require, prior to the settlement of the guarantee, that depositors justify the origin and availability of the deposited funds through records that demonstrate the verisimilitude of the same and/or that the effective entry of the funds to the entity has been verified regarding each operation covered by the regime.

Furthermore, the aforementioned company must file the relevant complaint when it detects irregularities or a criminal offense aimed at obtaining undue payment of the guarantee.

Instrumentation.
In all documents representing passive operations (certificates, deposit slips, account summaries, etc.), the following legend must appear, visibly and printed on the front or back of them:
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+----------+---------------------------------------------------+ I B.C.R.A. I RULES FOR THE APPLICATION OF THE DEPOSIT GUARANTEE I I INSURANCE SYSTEM I +----------+---------------------------------------------------+ "Deposits in pesos and foreign currency are covered by a guarantee of $ 30,000. In operations in the name of two or more persons, the guarantee will be prorated among their holders. In no case, the total guarantee per person may exceed $ 30,000, regardless of the number of accounts and/or deposits. Law 24.485, Decree 540/95 and Comm. "A" 2337 and its modifiers and complements. Excluded are those captured at rates higher than the reference rate and those that have counted with additional special incentives or stimuli to the interest rate."

In the event that any of the situations cited at the end occurs, the following legend must be placed visibly on the front of the documents:
"Deposit without guarantee"

Entities must keep the complete texts of Law 24.485, Decree 540/95 (updated text), and Communication "A" 2337, its modifiers and complements, available to their clients.

Furthermore, in the advertising carried out by financial entities, related to the deposits they capture, the existence of a limited guarantee for their return must be stated.

On boards where rates offered to clients are informed, the scope of the guarantee (type of deposits included, percentage and amount guaranteed, exceptions, etc.) must be transcribed visibly.
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+----------+---------------------------------------------------+ I B.C.R.A. I RULES FOR THE APPLICATION OF THE DEPOSIT GUARANTEE I I INSURANCE SYSTEM I +----------+---------------------------------------------------+ Until new documents containing the legends in printed form are available, the requirement may be met by placing stamps with the following expressions: "Deposits have a limited guarantee for their return. Law 24.485, Decree 540/95 and Comm. "A" 2337, its modifiers and complements" or "Deposit without guarantee", as appropriate.

Determination of the additional contribution.
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.

7.1. Entities with "CAMEL" rating.
It 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. which will take the value resulting from the following expression:
Ipr/f = (Vi/0,04) 1,20

where
Vi: ratio between the minimum provisions required according to point 2.1 of Section 2 of the Rules on minimum provisions for uncollectible risk and the total financings included (Section 2 of the Rules on debtor classification). This concept includes the balances of guarantees granted for obligations assumed on behalf of third parties, recorded on the last day of the month in question, according to the classification reported in the debtor status statement.

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, less than or greater than those lower and upper limits, 1 or 2.5 will be taken, as appropriate.

Iar/a : indicator referred to in point 3.3.2. which will take the value resulting from the following expression:
Iar/a = (Vi/0,70) 1,30

where
Vi: ratio between the entity's risk assets and total assets.
Risk assets are defined as the sum of the concepts "Ais", "Aif", "Vrf" and "Vrani" -in the last two cases computed by their weighted value- in the terms referred to in point 3.1 of Section 3 of the Rules on minimum capitals of financial entities, and total assets as the sum of the concepts "Ais", "Aif", "f" and other non-immobilized assets not included in "f" -included in "Vrani"-. +-----------+---------------------+------------------+---------+ IVersion: 1st. ICommunication "A" 2807 IValidity: 19.11.98 IPage 7 I +-----------+---------------------+------------------+---------+

+----------+---------------------------------------------------+ I B.C.R.A. I RULES FOR THE APPLICATION OF THE DEPOSIT GUARANTEE I I INSURANCE SYSTEM I +----------+---------------------------------------------------+ The value of the index will be bounded between 1 and 2. That is, in cases where the result of the expression is, respectively, less than or greater than those lower and upper limits, 1 or 2 will be taken, as appropriate.

Icamel : indicator referred to in point 3.1.
The value resulting from the following table will be taken:

Rating Index
1 1.00
2 1.33
3 1.66
4 2.00
5 2.00

The rating that the Superintendence of Financial and Exchange Entities assigns to the financial entity will be considered for the calculation of contributions to the Deposit Guarantee Fund that are due from the third month following that in which the pertinent notification took place.

Irpc/Kmin: indicator referred to in point 3.2.
The value resulting from the following table will be taken:

Ratio RPC/minimum capital requirement Index up to 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 superior to 1.50 + 0.30 +-----------+---------------------+------------------+---------+ IVersion: 1st. ICommunication "A" 2807 IValidity: 19.11.98 IPage 8 I +-----------+---------------------+------------------+---------+

+----------+---------------------------------------------------+ I B.C.R.A. I RULES FOR THE APPLICATION OF THE DEPOSIT GUARANTEE I I INSURANCE SYSTEM I +----------+---------------------------------------------------+ 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, less than or greater than those lower and upper limits, 1 or 2 will be taken, as appropriate.

For the calculation of the relationships, the amounts corresponding to the third month prior to the due date of the contributions will be considered.

7.2. Entities without "CAMEL" rating.
Until the rating of the Superintendence of Financial and Exchange Entities ("CAMEL") is available, the calculation of the correction index will arise from the following expression:
Ic = {(Ipr/f + Iar/a)/2} - Irpc/Kmin

For its application, the definitions of the terms according to point 7.1 will be taken into account.
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+------------+-------------------------------------------------+ I I ORIGIN OF THE PROVISIONS INCLUDED IN THE I I B.C.R.A. I CONSOLIDATED TEXT OF THE RULES FOR THE APPLICATION I I OF THE DEPOSIT GUARANTEE INSURANCE SYSTEM I +------------+-------------------------------------------------+ +--------------+-----------------------------------------------+ I NEW T.O. I ORIGIN RULE I +-------+------+---------+------+-------+------+---------------+ I Point I Par. IComm. IAnnex I Point I Par. I Observations I +-------+------+---------+------+-------+------+---------------+ I1. I I"A" 2337 I I I1. I1 and 2 I I +-------+------+---------+------+-------+------+---------------+ I2. I 1st I"A" 2337 I I I2. I 1st IAdapted by I Iapplication Dec. I I1292/96. Inclu-I Ides modification I Iinterpretative I I2. I 2nd I"A" 2337 I I I2. I 2nd IAdapted according I Ito Decree 1292/96 I +-------+------+---------+------+-------+------+---------------+ I3. I 1st I"A" 2337 I I I3. I 1st I I I3.1. I I"A" 2337 I I I3.1. I I3.2. I I"A" 2337 I I I3.2. I I3.3. I I"A" 2337 I I I3.3. I I3.3.1. I I"A" 2337 I I I3.3.1. I I3.3.2. I I"A" 2337 I I I3.3.2. I I3. I 2nd I"A" 2337 I I I3. I 2nd I I +-------+------+---------+------+-------+------+---------------+ I4. I 1st I"A" 2337 I I I4. I3 and 2 IAccording to Comm. I"B" 5806, 8th I Iparagraph. I I4. I 2nd I"A" 2337 I I I4. I 4th I I I4. I 3rd I"A" 2337 I I I4. I 4th I I +-------+------+---------+------+-------+------+---------------+ I5. I I"A" 2337 I I I6. I I5.1. I 1st I"A" 2337 I I I6.1. I 1st I I I5.1.1. I I"A" 2337 I I I6.1. I i) I I I5.1.2. I I"A" 2337 I I I6.1. I ii) I I I5.1.3. I I"A" 2337 I I I6.1. I iii) I I I5.1.4. I I"A" 2337 I I I6.1. I iv) I I I5.1.5. I I"A" 2482 I I1. I 2nd I I I5.1.6. I I"B" 5806 I 3rd IIncludes modifi-I Ication inter-I Ipretative. That-I Idan covered by I Ithe contribution. I +-------+------+---------+------+-------+------+---------------+

+--------------+-----------------------------------------------+ I NEW T.O. I ORIGIN RULE I +-------+------+---------+------+-------+------+---------------+ I Point I Par. IComm. IAnnex I Point I Par. I Observations I +-------+------+---------+------+-------+------+---------------+ I5.2. I I"A" 2337 I I I6.4. I IText according to I IComm. "A" 2399. I I5.2.1. I I"A" 2337 I I I6.4.1. I IText according to I IComm. "A" 2399. I I5.2.2. I I"A" 2337 I I I6.4.2. I IText according to I IComm. "A" 2399 I I5.2.3. I I"A" 2337 I I I6.3. I IText according to I IComm. "A" 2777. I I5.2.4. I I"A" 2337 I IV I I IDec. 540/95, I Iart.12,inc. a) I I5.2.5. I I"A" 2337 I I I6.2. I I5.2.6. I I"A" 2337 I IV I I IDec. 540/95, I Iart.12,inc. c) I I5.2.7. I I -- I IInclusion in- I Iterpretative. I I5.3. I I"A" 2337 I I I6. I I5.3.1. I I"A" 2337 I I I6.5. I IAmount according I Ito Dec. 1127/98. I I5.3.2. I I"A" 2337 I I I6.7. I 1st IAdapted to I IDec. 1127/98. I I5.3.3. I I"A" 2337 I I I6.7. I 2nd IAdapted to I IDec. 1127/98. I I5.3.4. I I"A" 2337 I I I6.8. I IAdapted to I IDec. 1292/96. I I5.3.5. I I"A" 2337 I I I6.9. I +-------+------+---------+------+-------+------+---------------+ I6. I I"A" 2337 I I I7. I IText according to I IComm. "A" 2399. I Iadapted to I IDec. 1127/98. I +-------+------+---------+------+-------+------+---------------+ I7. I I"A" 2337 I II I1. I IText according to I IComm. "A" 2561. I I7.1. I I"A" 2337 I II I1. I IText according to I IComm. "A" 2561. I I7.2. I I"A" 2337 I II I2. I IText according to I IComm. "A" 2561. I +-------+------+---------+------+-------+------+---------------+

+----------+-----------------------------------+---------------+ I B.C.R.A. I LAW 24.485 - Art. 1st IAnnex II to I (B.O. of 18.4.95) I Comm. "A" 2807 I +----------+-----------------------------------+---------------+
Article 1st: The Deposit Guarantee Insurance System is created, which will be limited, mandatory, and onerous, with the object of covering the risks of bank deposits, in a subsidiary and complementary manner to the system of privileges and deposit protection established by the Financial Entities Law, without compromising the resources of the Central Bank of the Argentine Republic nor of the National Treasury. The Central Bank of the Argentine Republic is authorized to organize and put into operation the system created by this article.
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+----------+-------------------------------------+-------------+ I I DECRETO 540/95. CONSOLIDATED TEXT I Annex III B.C.R.A. I WITH THE MODIFICATIONS OF THE I a to I DECREES 1292/96 AND 1127/98 ICom. "A" 2807I +----------+-------------------------------------+-------------+
Article 1: The "DEPOSIT GUARANTEE FUND" (FGD) is created with the purpose of covering bank deposits within the scope provided in this Decree.
The "DEPOSIT INSURANCE ANONYMOUS COMPANY" (SEDESA) is constituted with the exclusive object of exercising the functions of trustee of the trust agreement to be entered into between SEDESA and the NATIONAL STATE, through the CENTRAL BANK OF THE ARGENTINE REPUBLIC, to administer the FGD.
Article 2: The MINISTRY OF ECONOMY AND PUBLIC WORKS AND SERVICES is delegated the approval of the Deed of Incorporation and the Bylaws of "DEPOSIT INSURANCE ANONYMOUS COMPANY" (SEDESA), which will have as partners the CENTRAL BANK OF THE ARGENTINE REPUBLIC, with a minimum of one share, and whoever results as trustee of the trust agreement to be constituted by the financial entities authorized to operate in the ARGENTINE REPUBLIC that express their willingness to participate, in the proportion determined for each by the CENTRAL BANK OF THE ARGENTINE REPUBLIC based on their contributions to the FGD. Until the constitution of SEDESA, contributions to the FGD will enter the account and entity determined by the CENTRAL BANK OF THE ARGENTINE REPUBLIC.
Article 3: SEDESA will not receive any compensation for its performance as trustee of the FGD. The operating expenses of the company will be strictly necessary to operate and must be covered by the income of the FGD. The modification of its bylaws or capital will require at least the favorable vote of the shares owned by the CENTRAL BANK OF THE ARGENTINE REPUBLIC.
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+----------+-------------------------------------+-------------+ I I DECRETO 540/95. CONSOLIDATED TEXT I Annex III B.C.R.A. I WITH THE MODIFICATIONS OF THE I a to I DECREES 1292/96 AND 1127/98 ICom. "A" 2807I +----------+-------------------------------------+-------------+ and to take note of the registration of SEDESA in the registry under its charge.
Article 6: Financial entities authorized to operate in the ARGENTINE REPUBLIC must integrate the FGD with a normal monthly contribution determined by the CENTRAL BANK OF THE ARGENTINE REPUBLIC between a minimum of ZERO POINT ZERO FIFTEEN PERCENT (0.015%) and a maximum of ZERO POINT ZERO SIX PERCENT (0.06%) of the average of the daily balances of deposits in pesos and foreign currency held in the financial entities, and with additional contributions that the CENTRAL BANK OF THE ARGENTINE REPUBLIC establishes for each entity based on the risk indicators it deems appropriate. In no case can the additional contribution exceed the equivalent of a normal contribution. For the purpose of calculating the average of daily balances of deposits in pesos and foreign currency, deposits corresponding to official national accounts opened in the NATIONAL BANK OF ARGENTINA are excluded.
THE CENTRAL BANK OF THE ARGENTINE REPUBLIC may provide that the integration of the contribution, whether in cash or by assuming the commitment to make the same, instrumented under the conditions and formalities determined by the CENTRAL BANK OF THE ARGENTINE REPUBLIC, the contributing financial entities must comply with the current regulations on minimum capital. Such commitments may not exceed FIFTY PERCENT (50%) of the contribution to be made.
Article 7: THE CENTRAL BANK OF THE ARGENTINE REPUBLIC will determine the due date for the obligation to deposit the contributions. Financial entities must deposit their contributions punctually as a condition to operate regularly. Financial entities that begin their operations in the ARGENTINE REPUBLIC may enter the trust referred to in Article 2 of this Decree, and those that cease to operate will lose the condition to integrate it, ceding their rights at the nominal value of the SEDESA shares. The Regulatory Authority will establish annually the proportion of participation in the trust for each financial entity, and the corresponding transfers to the nominal value of the shares must be made immediately.
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+----------+-------------------------------------+-------------+ I I DECRETO 540/95. CONSOLIDATED TEXT I Annex III B.C.R.A. I WITH THE MODIFICATIONS OF THE I a to I DECREES 1292/96 AND 1127/98 ICom. "A" 2807I +----------+-------------------------------------+-------------+ establish the proportion of participation in the trust for each financial entity, and the corresponding transfers to the nominal value of the shares must be made immediately.
Article 8: When the FGD reaches the sum of TWO BILLION PESOS ($ 2,000,000,000) or FIVE PERCENT (5%) of the total deposits of the financial system, if that proportion is greater, the CENTRAL BANK OF THE ARGENTINE REPUBLIC may suspend or reduce the obligation to make contributions to the FGD, restoring said obligation totally or partially when the FGD decreases from that amount or proportion. For the purposes of this Article, only the cash contributions made by financial entities will be counted. THE CENTRAL BANK OF THE ARGENTINE REPUBLIC may adjust the total amount that the FGD must reach, when it considers that the accumulated amount is prudent in relation to the situation of the financial market and the functions of the FGD.
Article 9: At any time, the CENTRAL BANK OF THE ARGENTINE REPUBLIC may require financial entities to advance the integration of up to two years of the minimum provided for normal contributions, either entirely in cash or including contribution commitments up to the maximum authorized in Article 6 of this Decree. THE CENTRAL BANK OF THE ARGENTINE REPUBLIC may, at the request of SEDESA, directly debit the normal or additional contributions owed by financial entities from the funds they have deposited in said Institution. It may proceed in the same manner in case of not granting the contribution commitments provided for in Article 6 of this Decree.
Article 10: The resources of the FGD will be invested under conditions similar to those established for the placement of the foreign exchange reserves of the CENTRAL BANK OF THE ARGENTINE REPUBLIC. Without prejudice to this, the CENTRAL BANK OF THE ARGENTINE REPUBLIC may authorize that up to FIFTY PERCENT (50%) of the assets comprising the FGD be invested in national public bonds. The returns of the FGD will form part of it and will be rein-
+-----------+---------------------+------------------+---------+ Version: 1st. ICommunication "A" 2807IEffective: 19.11.98IPage 3 I +-----------+---------------------+------------------+---------+

+----------+-------------------------------------+-------------+ I I DECRETO 540/95. CONSOLIDATED TEXT I Annex III B.C.R.A. I WITH THE MODIFICATIONS OF THE I a to I DECREES 1292/96 AND 1127/98 ICom. "A" 2807I +----------+-------------------------------------+-------------+ verted under the same conditions. SEDESA will inform the public and the SUPERINTENDENCY OF FINANCIAL AND EXCHANGE ENTITIES monthly of the balance of the FGD.
Article 10 bis: SEDESA may carry out the following operations with the resources of the FGD:
a) Effectuate the coverage of the guarantee to depositors, within the limits and conditions established in this and its regulatory, complementary, and clarifying norms. b) Make capital contributions, non-refundable contributions, or loans to:
(I) Financial entities that are subject to a regularization and recovery plan and for the purpose of supporting its compliance; (II) Financial entities that acquire assets and assume the payment of deposits of another entity subject to the regime of Article 35 bis and concordant articles of the Financial Entities Law, when it is convenient to compensate for the insufficiency of said assets with respect to the total of the transferred deposits; or (III) Absorbing or acquiring financial entities of financial entities within the framework of a regularization and recovery plan. c) Enter into a call option contract with financial entities that acquire assets and assume the payment of deposits of another entity subject to the regime of Article 35 bis and concordant articles of the Financial Entities Law, in favor of the acquiring entity over all or part of the transferred assets. d) Acquire deposits of suspended banks under Article 49 of the Organic Charter of the Central Bank (Law 24.144) up to the guarantee amounts provided for in Article 13 of this Decree, subrogating into the rights of the depositors. e) Contract obligations against the FGD, in its capacity as administrator thereof, and with the guarantee of all contributing financial entities, for up to an amount equivalent to TWO (2) years of the total current contribution flows, including the cash contribution and those that may be made with guarantees from financial entities according to applicable regulations. The guarantee to be granted by financial entities will be determined by the amounts individually corresponding to them and will be on first demand and under the conditions and formalities established by the CENTRAL BANK OF THE ARGENTINE REPUBLIC. f) Carry out, maintain, or finance swap programs with foreign banks that aim to contribute to the stability of the Financial System, with the prior approval of the CENTRAL BANK OF THE ARGENTINE REPUBLIC and charged to the FGD. The application of the alternatives provided for in the preceding letters b), c), and d) will be decided exclusively by a Management Committee, whose decisions will be binding on SEDESA. Such Committee will be integrated by a representative of the CENTRAL BANK OF THE ARGENTINE REPUBLIC and a number of board members to be determined in the Trust Agreement between a minimum of four and a maximum of seven representatives of the financial entities contributing to the FGD. The representative of the CENTRAL BANK OF THE ARGENTINE REPUBLIC will serve as President and have the right of veto but not of vote. Board members will have the right to vote in proportion to the contributions they make to the FGD by the entities they represent and according to what is provided in the Trust Agreement. The Management Committee must decide the application of any of the alternatives provided for in the preceding letters b), c), and d) when, according to the estimates that can be made at the moment the decision must be taken, its adoption
implies a direct cost to the FGD lower than that which would be borne by the FGD in the case of the authorization for the affected entity to function being revoked and the payment to depositors provided for in the preceding letter a) must be fulfilled, for which the financial situation of the affected entity and the probable recovery of SEDESA's disbursements by subrogation must be taken into account. Everything related to the Management Committee will be provided for in the trust agreement celebrated between the CENTRAL BANK OF THE ARGENTINE REPUBLIC AND SEDESA.
Article 11: The coverage offered by the system will cover deposits in PESOS and foreign currency held in participating entities in the form of checking accounts, savings accounts, time deposits, or other modalities determined by the CENTRAL BANK OF THE ARGENTINE REPUBLIC, which meet the requirements established in this decree and the others established by the Regulatory Authority.
Article 12: The following are not covered by the guarantee system:
a) deposits of financial entities in other intermediaries, including time deposit certificates acquired through secondary negotiation. b) deposits made by persons linked, directly or indirectly, to the entity according to the guidelines established or to be established in the future by the CENTRAL BANK OF THE ARGENTINE REPUBLIC. c) time deposits of securities, acceptances, or guarantees. d) deposits constituted after 1.7.95, on which an interest rate higher by two percentage points annually than the passive interest rate for equivalent terms of the NATIONAL BANK OF ARGENTINA corresponding to the day prior to the deposit has been agreed. THE CENTRAL BANK OF THE ARGENTINE REPUBLIC may modify the reference rate established in this letter, communicating it FIVE (5) banking days in advance. e) other deposits that the Regulatory Authority excludes in the future.
Article 13: (*) The guarantee will cover the return of demand or time deposits up to the sum of THIRTY THOUSAND PESOS ($ 30,000).
THE CENTRAL BANK OF THE ARGENTINE REPUBLIC may provide, at any time and generally, the modification of that coverage amount of the guarantee system, based on the evolution of the consolidation process of the financial system and other indicators it deems appropriate. Deposits for amounts higher than the coverage amount are also included in the guarantee regime up to that maximum limit.
Article 14: The receipt by depositors of the sums disbursed by SEDESA with the FGD's availability implies the legal subrogation in favor of SEDESA in the collection rights in the liquidation or bankruptcy of the entity, with the privileges corresponding to the depositors and with priority of collection over them up to the concurrence of the sums paid by SEDESA according to what is provided in Article 13 of this Decree.
Article 15: The guarantee applies under equal conditions for natural and legal persons. To determine the amount covered and its return to the depositor, the total of the deposits registered by each person in the entity on the date of the revocation of its authorization to function will be computed. In accounts and deposits in the name of TWO (2) or more persons, it will be understood that only one of them enjoys the guarantee, prorating it among the participants.

(*) Decree 1127/98. Effective: 28.9.98
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Article 16: ()
Article 17: The guarantee will be effective in a subsidiary and complementary manner to the reimbursement of deposits by applying the privileges established by the Financial Entities Law, within THIRTY (30) business days counted from the day following the revocation of the authorization to function of the entity, to the extent that depositants meet the established requirements and the FGD has availability. At the request of SEDESA, the CENTRAL BANK OF THE ARGENTINE REPUBLIC may authorize the extension of said term when the number of beneficiaries in liquidation proceedings justifies it.
When the resources of the FGD are insufficient to cover the payment of guaranteed sums, the reimbursement will be made pro rata of the available funds. The balance will be settled within THIRTY (30) days counted from the date the FGD informs the existence of financial availability. In these situations and when there is more than one entity whose authorization has been revoked, the precedence for reimbursement will be governed by the chronological order resulting from the start of the computation of the payment term of the guarantee. In no case will the FGD cover or recognize interest for the period between the original maturity of the deposit and the date of payment of the guarantee.
Article 18: The payment of guaranteed sums will be made in pesos or foreign currency, according to the proportion of each species resulting from the total of the deposited capital. For this latter purpose and to homogenize the balances of the total deposited when it comes to deposits in foreign currency, their equivalent in pesos will be taken according to the selling exchange rate for bills of the NATIONAL BANK OF ARGENTINA, corresponding to the day prior to the revocation of the authorization to function of the included entity.
Article 19: SEDESA may reject or postpone until its judicial recognition the request for guarantee coverage when the respective deposits do not meet the formal or substantial requirements established in this regulation or other provisions issued by the CENTRAL BANK OF THE ARGENTINE REPUBLIC.
Article 20: SEDESA may exercise the corresponding judicial actions when, in its judgment, there are real possibilities of recovering the disbursed amounts.
Article 21: The regime established in this Decree will apply to time deposits that are constituted or renewed from April 18, 1995, and to demand deposits that are registered in the balances corresponding to the close of that day, constituted in financial entities that were not suspended by the CENTRAL BANK OF THE ARGENTINE REPUBLIC nor had their authorization to function revoked.
Article 22: THE CENTRAL BANK OF THE ARGENTINE REPUBLIC will be the Regulatory Authority of the system created by law 24.485 and regulated by this Decree, being empowered to issue the interpretative and application norms that are necessary.
Article 23: The Board of Directors of SEDESA must communicate to the SUPERINTENDENCY OF FINANCIAL AND EXCHANGE ENTITIES dependent on the CENTRAL BANK OF THE ARGENTINE REPUBLIC, its opinion regarding financial entities that, in its judgment, have credit or commercial policies that are considered higher risk than normal. It may also be requested for an opinion regarding authorization requests to function or transformation that are under consideration by the CENTRAL BANK OF THE ARGENTINE REPUBLIC.
Article 24: () This Decree will enter into force from the same day of its publication in the Official Bulletin.
Article 25: Form.

(*) Applicable to decrees 540/95, 1292/96 and 1127/98, in their respective dates.
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