Clarifications related to the regulations of the new financial framework

BANCO CENTRAL DE LA REPÚBLICA ARGENTINA
COMMUNICATION "A" 172 21/07/82
TO FINANCIAL ENTITIES:
Ref.: Clarifications related to the regulations of the new financial framework

We address you to deliver to you attached complementary clarifications to those disseminated through Communication "A" 168, regarding interpretive criteria of norms that constitute the new financial framework.

We salute you very attentively.

BANCO CENTRAL DE LA REPÚBLICA ARGENTINA
Néstor J. Taró
Manager of Standards for
Financial Entities
Daniel E. de Pablo
Deputy General Manager

ANNEX

B.C.R.A. CLARIFICATIONS LINKED TO THE REGULATIONS OF THE NEW FINANCIAL FRAMEWORK
Annex to
Comm. "A" 172

QUESTION: What selectivity criteria govern the application of own resources of the entities?
ANSWER: There are no qualitative and quantitative orientation provisions for credit and investment operations carried out with own funds, nor for the application of resources from non-transferable fixed-term deposits at free rates; from deposits and other obligations in foreign currency; from items exempt from constituting minimum cash, and from authorized interfinancial loans. Furthermore, no specific selectivity has been established for credits that are charged to the special loan limit enabled based on non-transferable fixed-term deposits adjustable to medium term (point 2. of section II of the CIRCULAR MONETARY REGULATIONS - REMON - 1 - 23 (Communication "A" 146). The operations attended with the mentioned resource sources are not covered, furthermore, by the maximum interest rate requirement, except for the credits provided for in the cited Communication "A" 146.

QUESTION: Does the special loan limit referred to in the CIRCULAR MONETARY REGULATIONS - REMON - 1 - 23 (Communication "A" 146) arise automatically from the non-transferable fixed-term deposits adjustable to medium term captured, or is it at the discretion of the entities to request its enablement? ANSWER: These loans from the Central Bank are simultaneously assigned based on the monthly average of the deposits collected, except in the initial period July/September, in which that limit will be determined by the effective use made of it. Consequently, it will be essential to scale the collection to the real possibilities of their application to credits, since from next October the Central Bank will settle for the part not used in the credits contemplated in the aforementioned Communication "A" 146 and up to 97% of the monthly average of the cited deposits, an adjustment equivalent to the variation of the consumer price index.

QUESTION: Does the issuance of Decree 46/82 modify the requirement to liquidate investments in Adjustable National Securities referred to in point 3. of Title I of the CIRCULAR MONETARY REGULATIONS - REMON - 1 - 22 (Communication "A" 144)? ANSWER: Yes. As anticipated through Telephone Communication No. 4667 (Communication "C" 278), the entities may adhere to the redemption regime of the Adjustable National Securities established by the aforementioned legal device.

QUESTION: Will the "Additional" loan increase during August and next September?

• 2 -
  ANSWER: Yes, within the possibilities offered by the monetary programming. The guaranteed monthly increase (up to the amount of interest derived from the "Basic" loan) will operate from October 1982.

QUESTION: What criterion should be applied to determine the operations that must be assigned to the "Basic" loan and those that are excluded, when the amount of said credit is less than that of the active portfolio? ANSWER: It is at the discretion of the financial entities to perform such discrimination in the way they deem most appropriate.

QUESTION: Does the reference made in the first paragraph of point 3. of the CIRCULAR MONETARY REGULATIONS - REMON - 1 - 30 (Communication "A" 156) to "debtor balances for capitals and adjustments and accrued interest pending collection at 30.6.82", remain in force? ANSWER: No, the date to which such concepts must be considered is 2.7.82, in accordance with what is established in point 1. of the CIRCULAR MONETARY REGULATIONS - REMON - 1 - 28 (Communication "A" 154).

QUESTION: Do interfinancial loans that originate in resources assigned according to the regime of the CIRCULAR MONETARY REGULATIONS - REMON - 1

• 1 (Communication "A" 22 and complements), have to be computed for the determination of the "Basic" loan and correspondingly cancelled?
  ANSWER: No. It corresponds to keep these operations in force, therefore they must not have influence on item 8 of formula 3734.

QUESTION: What interest rate can be agreed upon in operations contracted with funds coming from recoveries of loans granted with attribution to the enablements of the regime cited previously?
ANSWER: These resources may be destined for the granting of financings that observe the maximum interest rate fixed in point 1. of the resolution given publicity by Communication "B" 384.

QUESTION: Which entities must integrate item 2 of formula 3734, for the determination of the "Basic" loan?
ANSWER: According to what is provided in the procedural rules (Annex to Communication "A" 157) this item will be covered only by commercial banks, which will register the balances of deposits of mortgage and investment banks and of non-bank financial entities.