Circular OPRAC 1-370: Credit Graduation. Assistance Based on Clients' Equity

BANCO CENTRAL DE LA REPUBLICA ARGENTINA
__________________________________________________________________ COMUNICACION " A " 2233 05/08/94 __________________________________________________________________ TO FINANCIAL ENTITIES:
Ref.: Circular
OPRAC 1 - 370.
Credit Graduation. Assistance based on clients' equity

We address you to inform you that this Institution adopted the following resolution:

"- Substitute, with effect from August 1994, point 1 of the Annex to Communication "A" 467, text according to Communications "A" 467, 612 and 2140, with the following:

"1. Applicable relationships for credit graduation.
The total of operations included in national or foreign currency, that each financial entity grants, may not exceed 300% of the computable equity responsibility of clients, established in accordance with the norms contained in point 6.1., whether natural or legal persons, groups or economic sets, linked or not.

Participations in companies that do not have as their corporate object the provision of complementary services to the activity developed by the financial entity may not exceed 12.5% of its computable equity, without prejudice to which financial support for any concept may not exceed 300%.

Within that maximum assistance limit, entities must analyze the cash flow of credit applicants against obligations assumed with third parties in order to weigh the repayment capacity of the financings, without prejudice to studying the risk emerging from each allocation to require the constitution of guarantees they deem adequate."

We salute you very attentively.
BANCO CENTRAL DE LA REPUBLICA ARGENTINA
Juan Carlos Isi Alfredo A. Besio
Deputy Manager of Standards Deputy Manager of Standards for Financial Entities for Financial Entities