Circular REMON 1 - 753. Minimum Cash. Modifications

BANCO CENTRAL DE LA REPÚBLICA ARGENTINA
__________________________________________________________________ COMUNICACIÓN " A " 3549 I 27/03/02 __________________________________________________________________ TO FINANCIAL ENTITIES:
Ref.: Circular
REMON 1 - 753
Minimum Cash. Modifications

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

"1. Incorporate, with effect from 1.3.02, in Section 1. of the norms on "Minimum Cash" the following points:

"1.3.17. Obligations with the Fiduciary Fund for Assistance to Financial and Insurance Entities. 0"

"1.3.18. Demand and fixed-term deposits made by order of the Judiciary with funds originating in the cases in which it intervenes, and their immobilized balances. 10"

2. Replace, with effect from 1.3.02, points 1.3.8., 1.3.9. and 1.3.10. of Section 1. of the norms on "Minimum Cash" with the following:

"1.3.8. Fixed-term deposits, obligations for "acceptances" -including liabilities for the sale or assignment of credits to subjects other than financial entities-, passive repos, sureties and passive stock market repos, constant-term investments, with option for early cancellation or renewal for a fixed term and with variable remuneration, and other fixed-term obligations, with the exception of rescheduled deposits included in points 1.3.9. and 1.3.10. and of the deposits and acceptances contemplated in points 1.3.14., 1.3.15., 1.3.17. and 1.3.18. 40"

"1.3.9. Deposits included in the "Deposit Rescheduling Regime", except those included in point 1.3.10. 40"

"1.3.10. Deposits included in the "Deposit Rescheduling Regime" in cases where the maturity of the last installment of the schedule operates from March 2003 (for the total amount of the deposit included, even if the maturity of some of the installments occurs before that month). 0"

3. Add, with validity from 1.3.02, in point 1.6. of Section 1. of the norms on "Minimum Cash" as non-computable concepts for the determination of the requirement for deposit increment, the following items:

• obligations for "acceptances" if there is the entry of cash, or by debit of "special accounts for cash deposits", or of transfers entered from abroad susceptible to be paid in cash, not linked to foreign trade operations.
• deposits made by order of the Judiciary in the cases in which it intervenes when their receipt by the depository entity is mandatory according to the legislation of the jurisdiction.

4. Replace, with validity from April 2002, point 3.1.1. of Section 3. of the norms on "Minimum Cash", with the following:

"3.1.1. Deficiencies in the integration of minimum cash and of the daily minimum integration will be subject to a charge equivalent to twice the nominal annual effective interest rate arising from the tenders of the Letters of the Central Bank of the Argentine Republic, in pesos or in US dollars, depending on whether it concerns deficiencies in national currency or in foreign currencies. The accepted cut-off rate reported by this Institution will be taken into account, which is expressed as a nominal annual effective rate, corresponding to the last tender carried out in the period under report.

In the event that letters are awarded for different terms on the same date, the rate corresponding to the operation of the shortest term will be considered. When deficiencies in the average position and in the daily minimum integration are verified concurrently in the same month, the charge resulting from the greater amount must be paid. To determine the deficiencies of the average position, the following will be considered:
i) those for which the option of their transfer is not used.

ii) those that are not susceptible to be transferred to the following month by exceeding the admitted margin."

5. Replace, with validity from 1.4.02, the first paragraph of point 2.4. of Section 2. of the norms on "Minimum Cash", with the following:
   "On no day of the month, the sum of the balances of the concepts admitted as integration referred to in points 2.1.2. to 2.1.5. and 2.1.7., recorded at the close of each day, may be less than 60% of the total minimum cash requirement, excluding the requirement for deposit increment, determined for the immediate previous month, recalculated based on the requirements and concepts in force in the month to which the reserves correspond, without considering the effects of the application of what is provided in point 1.5.1. of Section 1."
6. Establish that the rate to be used to determine the charge for minimum cash deficiencies in the monthly average position, in pesos and in foreign currency, which are registered in March 2002, will be equivalent to 28% nominal annual."

We send you attached the sheets that, in replacement of those previously provided, should be incorporated into the ordering on "Minimum Cash".

We salute you very attentively.

BANCO CENTRAL DE LA REPUBLICA ARGENTINA

Ana María Lemmi José Rutman
Submanager of Emission Principal Manager of of Norms Norms and Authorizations

ANEXO

B.C.R.A. ORDERED TEXT OF THE NORMS ON
MINIMUM CASH
-IndexSection 1. Requirement.
1.1. Obligations included.
1.2. Application base.
1.3. Minimum cash.
1.4. Specific increases in requirement due to liability concentration.
1.5. Transfers.
1.6. Requirement for deposit increment.
1.7. Deductible concept.
1.8. Defect of application of resources in foreign currency.
Section 2. Integration.
2.1. Admitted concepts.
2.2. Computation.
2.3. Maximum computation limit.
2.4. Daily minimum integration.
2.5. Additional remuneration.
Section 3. Non-compliance.
3.1. Charge.
3.2. Framing programs.
3.3. Regularization and sanitation plans.
Section 4. Base of observance of the norms.
4.1. Individual base.
Section 5. Responsible parties and sanctions.
5.1. Responsible for liquidity policy.
Section 6. Transitional provisions.
Version: 7a. Communication “A” 3549 Validity:
01.03.02

1.3. Minimum cash.
The amounts of minimum cash arising from applying the following rates must be integrated:
Concept Rate in %
1.3.1. Checking account deposits. 40
1.3.2. Savings account deposits. 40
1.3.3. Pupilar usuras, special accounts for closed circles,
special accounts for cash deposits, “Unemployment Fund for workers in the construction industry”, “Payment of remuneration”, special checking accounts for legal entities and savings pension fund. 40
1.3.4. Other demand deposits and obligations, pension
benefits credited by ANSES pending effectuation and immobilized balances corresponding to obligations included in these norms. 40
1.3.5. Unused balances of formalized current account
advances. 40
1.3.6. Demand placements -whatever the form of
deposit- that, as a minimum, must constitute the assets of common investment funds (in accordance with what is provided in the Norms of the National Securities Commission). 100
1.3.7. Deposits in checking accounts of non-banking financial entities,
computable for the integration of their minimum cash. 100
1.3.8. Fixed-term deposits, obligations for “acceptances”
-including liabilities for the sale or assignment of credits to subjects other than financial entities-, passive repos, sureties and passive stock market repos, investments at constant term, with option for early cancellation or renewal for a fixed term and with variable remuneration, and other fixed-term obligations, with the exception of rescheduled deposits included in points 1.3.9. and 1.3.10. and of the deposits and acceptances contemplated in the points 1.3.14. to 1.3.18. 40 Version: 8a. Communication “A” 3549 Validity:
01.03.02

1.3.9. Deposits included in the “Deposit Rescheduling
Regime”, except those included in point 1.3.10. 40
1.3.10. Deposits included in the “Deposit Rescheduling
Regime” in cases where the maturity of the last installment of the schedule operates from March 2003 (for the total amount of the deposit included, even if the maturity of some of the installments occurs before that month). 0
1.3.11. Obligations for foreign financial lines, including the
obligations with correspondents. 0
1.3.12. Negotiable obligations. 0
1.3.13. Rescheduled deposits assigned by other financial entities, maintained under rescheduling conditions,
with the purpose of carrying out the operation provided for in point 5. of the “Deposit Rescheduling Regime”. 100
1.3.14. Fixed-term deposits constituted with cash,
by debit of "special accounts for cash deposits", or with transfers entered from abroad susceptible to be paid in cash, not linked to operations of foreign trade, except those included in point 1.3.16.:
i) From 7 to 13 days ii) From 14 to 29 days iii) From 30 days or more 9 7 5
1.3.15. Obligations for "acceptances" if there is the entry of cash, or by debit of "special accounts for cash deposits", or of transfers entered from abroad susceptible
to be paid in cash, not linked to foreign trade operations:
i) From 7 to 13 days ii) From 14 to 29 days iii) From 30 days or more 5 4 3
1.3.16. Fixed-term deposits in US dollars payable in pesos. (Validity: 25.03.02) 0
1.3.17. Obligations with the Fiduciary Fund for Assistance to Financial and Insurance Entities. 0
Version: 8a. Communication “A” 3549 Validity:
01.03.02

1.3.18. Demand and fixed-term deposits made by order of the
Judiciary with funds originating in the cases in which it intervenes, and their immobilized balances. 10
1.4. Specific increases in requirement due to liability concentration.
When excessive concentration of liabilities (in titleholders and/or terms) is verified, which implies a significant risk regarding the individual liquidity of the financial entity and/or has a significant negative effect on systemic liquidity, additional minimum cash may be fixed on the liabilities included in the financial entity and/or complementary measures that are deemed pertinent. It will be considered that this situation is configured when, among others, any of the following factors are present:

• A high percentage of liabilities is concentrated in the same titleholder or
  holders.
• In term obligations, the term is short.
• The aforementioned liabilities represent a significant percentage with respect to the
  integration of minimum cash and/or the total of private sector deposits in the entity.
  1.5. Transfers.
  1.5.1. Admitted margin.
  The integration of the minimum cash of the monthly average positions of daily balances of the included obligations cannot be less than 90% of the requirement resulting from the following expression:
  EEMA (n) = EEF (n) + ENI (n-1)
  Where
  EEMA (n): adjusted minimum cash requirement corresponding to month “n”.
  EEF (n): minimum cash requirement according to current norms corresponding to month “n”. ENI (n-1): requirement not integrated in month “n-1”. Version: 4a. Communication “A” 3549 Validity:
  01.03.02

1.5.2. Utilization period.
The admitted transfer of the requirement not integrated in each month to the next position may be carried out for a maximum of six months, counted from the first month -inclusive- in which the option to use it is chosen in accordance with the preceding provisions or from the first immediate position following that in which the transferred defects are compensated or charge is paid on them.
1.6. Requirement for deposit increment.
A minimum cash requirement of 75% must be observed on the monthly average (considering only positive balances) of the daily increment that is registered in the deposits (demand and term, including all obligations subject to minimum cash requirement, except obligations with foreign banks - including parent companies and controlling entities of local entities and their branches - by lines that do not have as destination the financing of foreign trade operations, negotiable obligations and unused balances of current account advances computable), from 1.3.02, with respect to the balance verified on 30.11.01 (in this case, including computable obligations, according to the preceding criterion, subject to minimum liquidity requirements). Additionally, a minimum cash requirement of 25% must be observed on the monthly average (considering only positive balances) of the daily increment that is registered in the deposits (demand and term, including all obligations subject to minimum cash requirement, except obligations with foreign banks -including parent companies and controlling entities of local entities and their branches - by lines that do not have as destination the financing of foreign trade operations, negotiable obligations and unused balances of current account advances computable), from 1.3.02, with respect to the balance verified on 4.1.02 (in this case, including computable obligations, according to the preceding criterion, subject to minimum liquidity requirements). In the determination of such requirements, the following deposits will not be considered, for all purposes:

• official,

• fixed-term deposits constituted with cash from 3.12.01, by debit of
  "special accounts for cash deposits", or with transfers entered from abroad susceptible to be paid in cash, not linked to foreign trade operations,

• in special accounts for cash deposits,
  Version: 4a. Communication “A” 3549 Validity:
  14.03.02

• corresponding to foreign diplomatic or consular representations, international
  organizations, special missions and commissions or bilateral or multilateral organs established by treaties in which the Argentine Republic is a party, and to foreign officials of those entities, accredited before the Ministry of Foreign Relations, International Trade and Worship, provided that the accounts are related to the performance of their functions,

• rescheduled balances that are assigned by other financial entities, maintained
  as a deposit in the receiving entity under rescheduling conditions, with the purpose of carrying out an operation provided for in point 5. of the “Regime of Deposit Rescheduling”, and

• made by order of the Judiciary in the cases in which it
  intervenes when their receipt by the depository entity is mandatory according to the legislation of the jurisdiction. Nor will obligations for "acceptances" be considered if there is the entry of cash, or by debit of "special accounts for cash deposits", or of transfers entered from abroad susceptible to be paid in cash, not linked to foreign trade operations. For the purpose of determining the computable growth, the obligations included in foreign currency and the respective comparison base will be converted to pesos at a rate of one peso with forty cents for each US dollar ($ 1,40 = US$ 1) or its equivalent.
  1.7. Deductible concept.
  Amounts contributed from 1.3.02 to the Banking Liquidity Fund, including the amounts that exceed the equivalent of the mandatory integration.
  1.8. Defect of application of resources in foreign currency.
  The defect of application of resources corresponding to deposits in foreign currency that is determined in a month will be computed by an equivalent amount in the calculation of the minimum cash requirement of that same period. Version: 1a. Communication “A” 3549 Validity:
  14.03.02

MINIMUM CASH B.C.R.A. Section 2. Integration.
2.3. Maximum computation limit.
For the purpose of determining the integration of the requirement in foreign currencies, computing up to 50% of the cash (banknotes and coins, in the entity's offices, in custody in other financial entities, in transit and in cash transport companies) will be admitted.
2.4. Daily minimum integration.
On no day of the month, the sum of the balances of the concepts admitted as integration referred to in points 2.1.2. to 2.1.5. and 2.1.7., recorded at the close of each day, may be less than 60% of the total minimum cash requirement, excluding the requirement for deposit increment, determined for the immediate previous month, recalculated based on the requirements and concepts in force in the month to which the reserves correspond, without considering the effects of the application of what is provided in point 1.5.1. of Section 1. This daily requirement will be 70% when in the previous computation period a deficiency in average monthly integration has been registered exceeding the admitted transfer margin. To the amount obtained as applicable, the requirements for deposit increment referred to in point 1.6. of Section 1. will be added, which must be integrated exclusively in the checking account in pesos opened at the Central Bank of the Argentine Republic, on the third business day following the calculation.
2.5. Additional remuneration.
An interest rate equivalent to 0.75 times the monthly average rate arising from the daily survey conducted by the Central Bank of the Argentine Republic for fixed-term deposits in pesos for terms of 7 to 59 days, not exceeding the average of current rediscount rates during the month under report, applied to the lesser amount between:
i) the monthly average of daily balances that register the accounts referred to in points 2.1.2. and 2.1.4., and ii) the minimum cash requirement corresponding to fixed-term deposits in pesos of 14 days or more included in point 1.3.8. of Section 1. To the sum obtained as provided in the preceding provisions, the amount resulting from applying to the computable base value -paragraph i) or ii)- the monthly average rate used to settle interest daily on those accounts will be deducted. The settlement and credit will be made per month expired as established by the relevant information regime. Version: 9a. Communication “A” 3549 Validity:
01.04.02

MINIMUM CASH B.C.R.A. Section 3. Non-compliance.
3.1. Charge.
3.1.1. Deficiencies in the integration of minimum cash and of the daily minimum
integration will be subject to a charge equivalent to twice the nominal annual effective interest rate arising from the tenders of the Letters of the Central Bank of the Argentine Republic, in pesos or in US dollars, depending on whether it concerns deficiencies in national currency or in foreign currencies. The accepted cut-off rate reported by this Institution will be taken into account, which is expressed as a nominal annual effective rate, corresponding to the last tender carried out in the period under report. In the event that letters are awarded for different terms on the same date, the rate corresponding to the operation of the shortest term will be considered. When deficiencies in the average position and in the daily minimum integration are verified concurrently in the same month, the charge resulting from the greater amount must be paid. To determine the deficiencies of the average position, the following will be considered:
i) those for which the option of their transfer is not used. ii) those that are not susceptible to be transferred to the following month by exceeding the admitted margin.
3.1.2. Charges may be reduced in exceptional cases, when mitigating circumstances are given and weighing the causes that originated the
non-compliance.
3.1.3. Charges not paid in time and form will be subject during the period
of non-compliance to an interest equivalent to the rate arising from adding a 50% to the rate applicable to the deficiency, as provided in point 3.1.1.
3.1.4. The charge will be calculated with the following expression:
c = D *
TNA / 36500
Where c : amount of the charge.
D: deficiency subject to charge, expressed in numerals.
TNA: nominal annual rate applicable to the non-compliance, as a percentage. To determine the interest on charges not paid in time and form, the following expression will be applied:
i = [(1 + EAR) n/365 - 1] *
100
Version: 5a. Communication “A” 3549 Validity:
01.04.02

MINIMUM CASH B.C.R.A. Section 6. Transitional provisions.
6.1. Charge rate applicable to March 2002.
The rate to be used to determine the charge for minimum cash deficiencies in the monthly average position, in pesos and in foreign currency, will be equivalent to 28% nominal annual. Version: 1a. Communication “A” 3549 Validity:
01.03.02

B.C.R.A. ORIGIN OF THE PROVISIONS INCLUDED IN THE ORDERED TEXT OF THE NORMS ON MINIMUM CASH ORDERED TEXT ORIGIN NORM OBSERVATIONS Sec. Point Para. Com. Annex Sec. Point Para.
1.1. “A” 3274 II 1. 1.1.
1.1.1. “A” 3274 II 1. 1.1.1. According to Com. “A” 3498
1.1.2. “A” 3274 II 1. 1.1.2.
1.1.3. “A” 3274 II 1. 1.1.3. According to Com. “A” 3498
1.2. “A” 3274 II 1. 1.2. According to Com. “A” 3304 and
“A” 3498.
1.3. “A” 3274 II 1. 1.3.
1.3.1. “A” 3274 II 1. 1.3.1. According to Com. “A” 3338,
“A” 3417 and “A” 3498.
1.3.2. “A” 3274 II 1. 1.3.2. According to Com. “A” 3338,
“A” 3417 and “A” 3498.
1.3.3. “A” 3274 II 1. 1.3.3. According to Com. “A” 3338,
“A” 3399, “A” 3417 and “A”
3498.
1.3.4. “A” 3274 II 1. 1.3.4. According to Com. “A” 3338,
“A” 3417 and “A” 3498.
1.3.5. “A” 3274 II 1. 1.3.5. According to Com. “A” 3338,
“A” 3417 and “A” 3498.
1.3.6. “A” 3274 II 1. 1.3.6. According to Com. “A” 3365 and
“A” 3498.
1.3.7. “A” 3274 II 1. 1.3.7.
1.3.8. “A” 3498 unique 1. 1.3.8. According to Com. “A” 3506 -
pt. 2.- and 3549.
1.3.9. “A” 3498 unique 1. 1.3.9.
1.3.10. “A” 3498 unique 1. 1.3.10. According to Com. “A” 3549.
1.3.11. “A” 3498 unique 1. 1.3.11.
1.3.12. “A” 3498 unique 1. 1.3.12.
1.3.13. “A” 3498 unique 1. 1.3.13.
1.3.14. “A” 3506 3.
1.3.15. “A” 3506 3.
1.3.16. “A” 3527 3.
1.3.17. “A” 3549 1.
1.3.18. “A” 3549 1.
1.4. “A” 3274 II 1. 1.5. According to Com. “A” 3498
1.5. “A” 3274 II 1. 1.6.
1.5.1. “A” 3274 II 1. 1.6.1.
1.5.2. “A” 3274 II 1. 1.6.2. According to Com. “A” 3304.
1.6. “A” 3470 1. According to Com. “A” 3498 and
3549.
1.7. “A” 3498 unique 1. 1.7. According to Com. “A” 3508
1.
1.8. “A” 3498 unique 1. 1.8.

MINIMUM CASH
ORDERED TEXT RULE OF ORIGIN OBSERVATIONS
Sec. Point Para. Com. Annex Sec. Point Para.
2.1. “A” 3274 II 2. 2.1. According to Com. “A” 3498
2.1.1. “A” 3274 II 2. 2.1.1. According to Com. "A" 3304.
2.1.2. “A” 3274 II 2. 2.1.2. According to Com. “A” 3304 and
“A” 3498.
2.1.3. “A” 3498 unique 2. 2.1.3.
2.1.4. “A” 3274 II 2. 2.1.3. According to Com. “A” 3498
2.1.5. “A” 3274 II 2. 2.1.4.
2.1.6. “A” 3311
2.1.7. “A” 3498 unique 2. 2.1.7.
2.2. “A” 3274 II 2. 2.2. According to Com. “A” 3498
2.3. “A” 3274 II 2. 2.3. According to Com. “A” 3311,
2.4. “A” 3365 2. 3338 and “A” 3498. According to Com. “A” 3387,
3470, “A” 3498 and 3549.
2.
2.5. “A” 3527 4.
3.1. “A” 3274 II 3. 3.1.
3.1.1. “A” 3274 II 3. 3.1.1. According to Com. “A” 3326,
3365, “A” 3498 and 3549.
3.1.2. “A” 3274 II 3. 3.1.2.
3.1.3. “A” 3274 II 3. 3.1.3. According to Com. “A” 3326.
3.1.4. “A” 3274 II 3. 3.1.4.
3.2. “A” 3274 II 3. 3.2.
3.2.1. “A” 3274 II 3. 3.2.2.1.
3.2.2. “A” 3274 II 3. 3.2.2.2.
3.3. “A” 3274 II 3. 3.3. According to Com. “A” 3498
3.3.1. “A” 3274 II 3. 3.3.1.
3.
3.3.2. “A” 3274 II 3. 3.3.2.
4. 4.1. “A” 3274 II 4. 4.1.
5. 5.1. “A” 3274 II 5. 5.1. According to Com. “A” 3498
6. 6.1. “A” 3549 6.