CMN Resolution No. 2697 — Criteria for Classifying Credit Operations and Disclosure of Information in Financial Statement Notes

RESOLUTION NO. 2697

Establishes criteria for the classification of credit operations and disclosure of information in notes to financial statements.

The CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595 of December 31, 1964, makes public that the MONETARY COUNCIL, in a session held on February 24, 2000, based on Article 4, items XI and XII, of the aforementioned Law,

RESOLVES:

Article 1. Admit that credit operations be classified into the risk levels established in Article 1 of Resolution No. 2,682 of December 21, 1999, based on the criteria provided in Article 2 of that Resolution, observing the following schedule:

I - by March 31, 2000, operations with clients whose total liability is equal to or greater than R$500,000.00 (five hundred thousand reais);

II - by July 31, 2000, operations with clients whose total liability is equal to or greater than R$50,000.00 (fifty thousand reais) and less than R$500,000.00 (five hundred thousand reais).

Article 2. Amend Article 5 of Resolution No. 2,682 of 1999, which shall now read as follows:

"Article 5. Credit operations contracted with a client whose total liability is less than R$50,000.00 (fifty thousand reais) may be classified through the adoption of an internal assessment model or based on the delays recorded in Article 4, item I, of this Resolution, observing that the classification must correspond, at minimum, to risk level A.

Sole Paragraph. The Central Bank of Brazil may alter the value referred to in this article."

Article 3. Information regarding the composition of the credit operations portfolio, distributed across the corresponding risk levels provided for in Article 1 of Resolution No. 2,682 of 1999, must be disclosed in the notes to the financial statements, segregating the operations, at least, into performing credits with delays less than 15 days, and past due credits with delays equal to or greater than 15 days.

Article 4. This Resolution enters into force on the date of its publication.

Article 5. Paragraph 1 of Article 4 of Resolution No. 2,682 of 1999 is hereby repealed, as well as Paragraphs 2 and 3 of the same article being renumbered.

Brasília, February 24, 2000

Arminio Fraga Neto
President