Circular REMON 1-998: Minimum Cash Adjustments

2020 - YEAR OF GENERAL MANUEL BELGRANO

COMMUNICATION “A” 6901
13/02/2020

TO FINANCIAL INSTITUTIONS:

Ref.: Circular
REMON 1 - 998

Minimum cash. Adjustments.

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We address you to inform you that this Institution adopted the resolution that, in its pertinent part, establishes:

“- Replace, with effect from 17.2.2020, the second paragraph of point 1.5.4. of the rules on “Minimum cash” with the following:

“The requirement shall be reduced by an amount equivalent to 30 % of the sum of peso financing to MSMEs –in accordance with the definition contained in the rules on “Determination of the condition of micro, small or medium-sized enterprise”– granted at a maximum interest rate of:

− 40 % fixed nominal annual until 16.2.2020 inclusive (which may continue to be computed until their cancellation).

− 35 % fixed nominal annual from 17.2.2020.”

On the other hand, we send you the pages that, in replacement of those previously provided, should be incorporated into the reference rules. In this regard, it is recalled that on the page of this Institution www.bcra.gob.ar, by accessing “Financial System - LEGAL AND REGULATORY FRAMEWORK - Compilations and summaries - Ordered texts of general regulations”, you will find the modifications made with texts highlighted in special characters (strikethrough and bold).

We greet you attentively.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

Darío C. Stefanelli
Principal Manager of Issuance and
Regulatory Applications

María D. Bossio
General Deputy Manager of Financial Regulation a/c

ANNEX

1.5.3. Based on cash withdrawals made through the entity's automated teller machines.

The requirement shall be reduced by the amount resulting from the following expression, without being able to exceed the amount of the requirement previously determined, considering the provisions of the preceding point:

where:

Msi : monthly average of the total daily cash withdrawals from automated teller machines, corresponding to the previous month, located in the entity's operating premises, according to the jurisdiction in which it is located, in accordance with the provisions of the rules on “Categorization of localities for financial institutions”.

Mni : monthly average of the total daily cash withdrawals from automated teller machines, corresponding to the previous month, outside its operating premises (neutral) and according to the jurisdiction in which they are located, in accordance with the aforementioned categories.

Psi : weighting factor applicable to the amount Msi .

Pni : weighting factor applicable to the amount Mni .

Weighting factors applicable based on the categories in which the automated teller machines are located
i	Psi	Pni
1 (categories I and II)	0,95	1,65
2 (categories III and IV)	4,25	7,05
3 (categories V and VI)	7,50	14,80

For these purposes, those automated teller machines that –at a minimum– allow users to make cash withdrawals regardless of the entity of which they are clients and of the network administering those equipment and that –on a monthly average, counting business and non-business days– have remained accessible to the public for at least ten hours per day shall be counted.

1.5.4. Special for entities included in Group “A”, in accordance with the provisions of Section 4. of the rules on “Authorities of financial institutions” and the branches or subsidiaries of foreign banks qualified as systemically important (G-SIB) not included in that group.

The requirement shall be reduced by an amount equivalent to 30 % of the sum of peso financing to MSMEs –in accordance with the definition contained in the rules on “Determination of the condition of micro, small or medium-sized enterprise”– granted at a maximum interest rate of:

− 40 % fixed nominal annual until 16.2.2020 inclusive (which may continue to be computed until their cancellation).

Version: 9th. COMMUNICATION “A” 6901
Effective date:
17/02/2020
Page 12

− 35 % fixed nominal annual from 17.2.2020.

For this purpose, the monthly average balance of the financing covered from the period prior to the computation of the requirement that meet the indicated conditions shall be considered.

This deduction may not exceed 2 % of the peso items subject to requirement, on average, of the month prior to the computation.

The financing computed for the deduction of point 1.5.4. may not be considered for the determination of the deduction of point 1.5.1.

1.6. Specific increases in requirement due to concentration of liabilities.

When an excessive concentration of liabilities (in holders and/or terms) is verified, which implies a significant risk with respect to the individual liquidity of the financial institution and/or has a significant negative effect on systemic liquidity, additional minimum cash requirements may be set on the covered liabilities of the financial institution and/or those complementary measures deemed pertinent.

This situation shall be considered to be configured when, among others, any of the following factors is present:

• A high percentage of liabilities is concentrated in a single holder or holders.

• In term obligations, the term is short.

• The aforementioned liabilities represent a significant percentage with respect to the integration of the minimum cash and/or total private sector deposits in the entity.

1.7. Transfers.

1.7.1. Allowed margin.

The integration of the minimum cash of the average position for the period may not be less than 80% of the requirement resulting from the following expression:

EEMA (n) = EEF (n) + ENI (n-1)

Where

EEMA (n): adjusted minimum cash requirement corresponding to period “n”.

EEF (n): minimum cash requirement according to current regulations corresponding to period “n”.

ENI (n-1): non-integrated requirement in period “n-1”.

Period: month or two-month period, as applicable.

Version: 5th. COMMUNICATION “A” 6901
Effective date:
17/02/2020
Page 13

MINIMUM CASH

CONSOLIDATED TEXT			SOURCE STANDARD					OBSERVATIONS
Sec.	Point	Paragraph	Com.	Annex	Sec.	Point	Para.
1.	1.3.8.		“A” 4360			2.		According to Com. “A” 5356 and 6616.
	1.3.9.		“A” 4754			6.		According to Com. “A” 5356, 5980, 6195, 6526, 6532, 6616 and 6728.
	1.3.10.		“A” 5945			4.		According to Com. “A” 6069, 6204 and 6616.
	1.3.11.		“A” 6341					According to Com. “A” 6616.
	1.3.12.		“A” 6069			4.		According to Com. “A” 6616.
	1.3.13.		“A” 5356			1.		According to Com. “A” 6616 and 6706.
	1.3.14.		“A” 6526					According to Com. “A” 6532, 6550, 6587, 6616 and 6706.
	1.3.15.		“A” 6550					According to Com. “A” 6556, 6559, 6575, 6587, 6616, 6706, 6738, 6740 and 6817.
	1.3.	Last	“A” 6526					According to Com. "A" 6532, 6556, 6569, 6575, 6587, 6616, 6628 and 6740.
	1.4.		"A" 3905			3.		According to Com. "A" 4179, 4449, 4473, 5671, 5740, 6232, 6349, 6719 and 6871.
	1.5.		"A" 5356			2.		According to Com. "A" 5471.
	1.5.1.		"A" 5356			2.		According to Com. "A" 5471, 5623, 6531, 6703 and 6705.
	1.5.2.		"A" 5631			1.		According to Com. "A" 5638, 6217, 6531 and 6857.
	1.5.3.		"A" 6740			1.
	1.5.4.		"A" 6858			1.		According to Com. "A" 6901.
	1.6.		"A" 3274	II	1.	1.5.		According to Com. "A" 3498.
	1.7.		"A" 3274	II	1.	1.6.
	1.7.1.		"A" 3274	II	1.	1.6.1.		According to Com. "A" 4405, 4449, 6349 and 6719.
	1.7.2.		"A" 3274	II	1.	1.6.2.		According to Com. "A" 3304, 4449, 6349 and 6719.
	1.7.3.		"A" 6728			2.
	1.8.		"A" 3498	único	1.	1.8.		According to Com. "A" 4147 and 6537.
	1.9.		"A" 5380					According to Com. "A" 5449, 5516, 5600, 5654 and 5771. Includes interpretive clarification.
2.	2.1.		"A" 3274	II	2.	2.1.		According to Com. "A" 3498, 3597, 4716, 4815, 6288, 6763 and "B" 9186.