Circular REMON 1-1062: Minimum Cash Requirements. Adjustments.

"Las Malvinas son argentinas"
"Las Malvinas son argentinas"

COMMUNICATION "A" 7536 30/06/2022
TO FINANCIAL ENTITIES:
Ref.: Circular
REMON 1-1062:
Minimum Cash. Adjustments.
___________________________________________________________________________ We address you to inform you that this Institution has adopted the resolution that, in its pertinent part, establishes:

“1. Substitute, with effect from 1.10.22, point 1.3. of the norms on “Minimum Cash” with the following:

“1.3. Minimum Cash.
The amounts of minimum cash resulting from applying the following rates shall be integrated, depending on whether they correspond to entities included in: i) Group “A” and branches or subsidiaries of foreign banks classified as systemically important (G-SIB) not included in that group or ii) the remaining financial entities –in accordance with what is provided in Section 4. of the norms on “Authorities of financial entities”, for which the indicator provided in point 4.1. of those norms shall be calculated, for all financial entities, solely on an individual basis–:

Concept
Rates in %
Group “A” and
G-SIB not included in that group
Remaining entities

1.3.1. Current account deposits and sight accounts opened in cooperative credit unions.
45
20

1.3.2. Savings account deposits, salary/social security accounts and special accounts –with the exception of deposits included in points 1.3.7. and 1.3.11.–, other deposits and sight obligations, pension benefits credited by ANSES pending cashing and immobilized balances corresponding to obligations included in these norms.

1.3.2.1. In pesos.
45
20

1.3.2.2. In foreign currency.
25
25

1.3.3. Unused balances of formalized current account advances.
45
20

1.3.4. Deposits in current accounts of non-bank financial entities, calculable for the integration of their minimum cash. This includes accounts opened in the name of the BCRA for the supervision of Internet Banking and/or Mobile Banking services.
100
100

1.3.5. Time deposits, obligations for “acceptances” –including liabilities from the sale or assignment of credits to subjects other than financial entities–, reverse repos and passive stock market repos, term investments with constant term, with option for early cancellation or renewal for a determined term –with variable remuneration, and other term obligations with the exception of deposits included in points 1.3.7. to 1.3.10. and 1.3.12.– and debt securities (including debentures), according to their residual term:

1.3.5.1. In pesos.
i) Up to 29 days.
25
11 ii) From 30 to 59 days.
14
7 iii) From 60 to 89 days.
4
2 iv) 90 days or more.
0
0

1.3.5.2. In foreign currency.
i) Up to 29 days.
23
23 ii) From 30 to 59 days.
17
17 iii) From 60 to 89 days.
11
11 iv) From 90 to 179 days.
5
5 v) From 180 to 365 days.
2
2 vi) More than 365 days.
0
0

1.3.6. Obligations for foreign financial lines.
0
0

Does not include those instrumented through:

1.3.6.1. Time deposits made by residents abroad linked to the entity pursuant to point 1.2.2. of the norms on “Large exposures to credit risk”, according to their residual term, to which the following correspond:
i) Up to 29 days.
23
23 ii) From 30 to 59 days.
17
17 iii) From 60 to 89 days.
11
11 iv) From 90 to 179 days.
5
5 v) From 180 to 365 days.
2
2 vi) More than 365 days.
0
0

1.3.6.2. Instrumented through time deposits –except those provided in point 1.3.6.1.– or the acquisition of debt securities:
the requirement provided in point 1.3.5. applies.

1.3.7. Sight and term deposits made by order of the Judiciary with funds originating in the cases in which it intervenes, and their immobilized balances.

1.3.7.1. In pesos, according to their residual term, being able to be integrated with LELIQ –those with the shortest issuance term– and/or NOBAC and/or national public titles in pesos –including those adjustable by the Reference Stabilization Coefficient (CER) and excluding those linked to the evolution of the US dollar– with a residual term (at the time of subscription) a) not less than 180 days nor greater than 450 calendar days acquired by primary subscription since 1.6.21 and b) not less than 120 days nor greater than 450 calendar days acquired by primary subscription since 1.11.21 –which will continue to be calculated until their maturity, as long as their integration is maintained– the requirement arising from term placements, except in the maximum proportion admitted for integration in “National Treasury Bonds in pesos maturing May 23, 2027”.
i) Up to 29 days.
22
10 ii) From 30 to 59 days.
14
7 iii) From 60 to 89 days.
4
2 iv) 90 days or more.
0
0

1.3.7.2. In foreign currency.
15
15

1.3.8. Special deposits linked to the inflow of funds from abroad - Decree 616/05.
100
100

1.3.9. Term investments instrumented in non-transferable named certificates, in pesos, corresponding to public sector holders who have the right to exercise the option for early cancellation in a term of less than 30 days counted from their constitution.
25
11

1.3.10. Time deposits and investments of “UVA” and “UVI” –including savings accounts and debt securities (including debentures) in “UVA” and “UVI”–, according to their residual term.
i) Up to 29 days.
7
7 ii) From 30 to 59 days.
5
5 iii) From 60 to 89 days.
3
3 iv) 90 days or more.
0
0

1.3.11. Severance Fund for Workers in the Construction Industry in UVA.
7
7

1.3.12. Time deposits and investments constituted in the name of minors with funds received gratuitously.
0
0

1.3.13. Sight deposits in pesos that constitute the assets of money market mutual funds (“money market”).
0
0

1.3.14. Deposits in pesos in accounts of payment service providers that offer payment accounts (PSPOCP) in which their clients' funds are deposited.
100
100

1.3.15. Financial entities may integrate the requirement in pesos –for the period and daily– with “National Treasury Bonds in pesos maturing May 23, 2027” up to:
a) 5 percentage points of the rates provided in point 1.3.9. and in subsections i) and ii) of points 1.3.5.1. and 1.3.7.1. b) 2 percentage points of the rates provided in subsection iii) of points 1.3.5.1. and 1.3.7.1. c) Entities included in Group “A” and branches or subsidiaries of G-SIB not included in that group: 5 percentage points of the rates provided in points 1.3.1., 1.3.2.1. and 1.3.3.

1.3.16. Financial entities may integrate the requirement in pesos –for the period and daily– with BCRA Liquidity Letters (LELIQ) –those with the shortest issuance term– and/or BCRA Notes (NOBAC) and/or national public titles in pesos –including those adjustable by the CER and excluding those linked to the evolution of the US dollar– with a residual term (at the time of subscription): a) not less than 180 days nor greater than 450 calendar days acquired by primary subscription since 1.6.21 and b) not less than 120 days nor greater than 450 calendar days acquired by primary subscription since 1.11.21 –which will continue to be calculated until their maturity, as long as their integration is maintained– in accordance with the following:

1.3.16.1. Sight deposits provided for in points 1.3.1., 1.3.2.1. and 1.3.3.
i. Entities included in Group “A” and branches or subsidiaries of G-SIB not included in that group up to 4 percentage points of the rate provided.
ii. Entities not included in the preceding subsection up to 10 percentage points of the rate provided.

1.3.16.2. Time deposits and term investments made by holders of the non-financial private and non-financial public sectors, and those provided in point 1.3.11.: the entire requirement, except for the maximum proportion admitted for integration in “National Treasury Bonds in pesos” (point 1.3.15.).

1.3.16.3. Term investments with variable remuneration made by clients with agricultural activity pursuant to point 2.5.2.2. of the norms on “Deposits and term investments”: the entire requirement.

1.3.16.4. Other placements.
i. Entities included in Group “A” and branches or subsidiaries of G-SIB not included in that group:
a) up to 9 percentage points of the rate provided in subsection i) of point 1.3.5.1.; b) up to 7 percentage points of the rate provided in subsection ii) of point 1.3.5.1.; c) up to 3 percentage points of the rates provided in subsections i) to iii) of point 1.3.10.; and d) up to 2 percentage points of the rate provided in subsection iii) of point 1.3.5.1.
ii. Entities not included in the preceding subsection:
a) up to 3 percentage points of the rates provided in subsection i) of point 1.3.5.1., and in subsections i) to iii) of point 1.3.10.; and b) up to 2 percentage points of the rate provided in subsection ii) of point 1.3.5.1.

To be admitted, integration with “National Treasury Bonds in pesos maturing May 23, 2027”, national public titles in pesos –including those adjustable by the CER and excluding those linked to the evolution of the US dollar–, LELIQ and/or NOBAC as provided for in points 1.3.7.1., 1.3.15. and 1.3.16., must be valued at market prices –regardless of the valuation criterion for their accounting registration– and be deposited in Subaccount 60 minimum cash enabled in the Central Registry and Settlement of Public Debt, Monetary Regulation and Financial Trust Instruments (CRyL).”

2. Replace, with effect from 1.10.22; point 1.5. of the norms on “Minimum Cash” with the following:

“1.5. Decrease in the requirement in average pesos.

1.5.1. Based on certain financings.

The requirement shall be reduced in accordance with the participation in total financings to the non-financial private sector in pesos in the entity of the financings to micro, small and medium-sized enterprises (MSMEs) in the same currency –in accordance with the definition contained in the norms on “Determination of the condition of micro, small or medium-sized enterprise”– considering that classification at the time of granting, according to the following table:

Participation of MSME financings with respect to total financings to the non-financial private sector, in the entity.
In %
Deduction
(on the total of concepts included in pesos).
In %
Less than 4
0.00
Between 4 and less than 6
1.00
Between 6 and less than 8
1.25
Between 8 and less than 10
1.50
Between 10 and less than 12
1.75
Between 12 and less than 14
2.00
Between 14 and less than 16
2.25
Between 16 and less than 18
2.50
Between 18 and less than 20
2.75
Between 20 and less than 22
3.00
Between 22 and less than 24
3.25
Between 24 and less than 26
3.50
26 or more
3.75

For the purposes of calculating MSME financings, to determine the percentage of participation, it will be taken into account whether they meet that condition at the time of granting the assistance, considering all financings currently in effect. If the borrower ceases to meet the MSME condition, the financings granted up to that moment will be calculated. The moving average balance at the end of the last 12 months prior to the reporting of financings in pesos (Loans and Credits for Financial Leasing) granted to MSMEs with respect to the total of those financings to the non-financial private sector of the entity will be considered.

1.5.2. Based on the granting of financings within the framework of the “AHORA 12” Program.

For those financial entities that are adhered to that program, the requirement shall be reduced by an amount equivalent to:

• 35% of the sum of financings in pesos granted up to 30.9.2020,
• 50% of the sum of financings in pesos granted from 1.10.2020 and up to 31.1.22, and
• 40% of the sums of financings in pesos that they grant from 1.2.22.

In all cases:

1.5.2.1. As provided by the “AHORA 12” Program referred to in Joint Resolution No. 671/14 and 267/14 of the former Ministry of Economy and Public Finances and the former Ministry of Industry, respectively, whose purpose is the acquisition of goods and services included in said resolution and its complementary norms.
To this effect, the balance of the financings covered from the period prior to the calculation of the requirement that meet the indicated requirements will be considered.

1.5.2.2. To non-financial companies issuing credit cards at an interest rate of up to 17% nominal annual, insofar as those companies have adhered to the “AHORA 12” Program.
To this effect, the financings of the period prior to the calculation of the requirement, measured by average monthly daily balances, will be considered. The financial entity must require and have documentation that accredits that the borrowing company has destined the funds to grant financings under the conditions of said Program. This deduction may not exceed 8% of the concepts in pesos subject to requirement, on average, of the month prior to the calculation.

1.5.3. Financings included in the “Financing Line for Productive Investment of MSMEs”.

The requirement shall be reduced by an amount equivalent to 34% of the financings provided in point 4.1. of the “Financing Line for Productive Investment of MSMEs” that are agreed at a nominal annual interest rate that does not exceed that provided in point 5.1.1. of those norms, measured by average monthly daily balances of the previous month.

1.5.4. Special for financial entities that have implemented the remote and in-person opening of the “Universal free account (CGU)” provided in point 3.11. of the norms on “Savings deposits, salary and special accounts”.

The requirement shall be reduced by an amount equivalent to the financings in pesos granted from 1.4.21 to natural persons and MSMEs –in accordance with the definition contained in the norms on “Determination of the condition of micro, small or medium-sized enterprise”– that have not been reported by financial entities in the “Central of debtors of the financial system” (CENDEU) in December 2020, provided that they have been agreed at a nominal annual interest rate that does not exceed, at that time, the maximum rate established in the first paragraph of point 2.1.1. of the norms on “Interest rates in credit operations”– when they are entities of Groups “A”, “B” and branches or subsidiaries of G-SIB not included in those groups, and regardless of the amount of the financing– or the current one according to point 2.1.2. of those norms for the rest of the financial entities. The average monthly balance of the financings covered from the period prior to the integration of the requirement will be considered.

The financings calculated for the deduction of points 1.5.1., 1.5.3. and 1.5.4. may only be calculated in one of the aforementioned points.”

3. Establish that the provisions of points 1.5.4., 1.5.5., 1.5.6., 1.5.7. and 1.5.10. of the norms on “Minimum Cash” in force until 30.9.22, will continue to be calculated as a decrease in the minimum cash requirement in pesos for the balances of the financings included disbursed up to that date.
   In addition, the decrease in the minimum cash requirement in pesos for cash withdrawals made through the entity's ATMs, in force until 30.9.22 as point 1.5.3. of said norms, will continue to be calculated until 31.12.22.

4. Repeal, with effect from 1.10.22, point 6.3. of the norms on “Minimum Cash.””

Likewise, we inform you that we will subsequently send you the sheets that, in replacement of those previously provided, should be incorporated into the norms in reference. We salute you attentively. CENTRAL BANK OF THE ARGENTINE REPUBLIC Darío C. Stefanelli María D. Bossio Principal Manager of Issuance and Normative Applications Deputy General Manager of Financial Regulation