CMN Resolution No. 4298 — Authorizes Rebate for Settlement and Renegotiation of Credit Operations under Pronaf Groups A and A/C

The Central Bank of Brazil, in accordance with Article 9 of Law No. 4,595 of December 31, 1964, makes public that the National Monetary Council, in an extraordinary session held on December 30, 2013, and considering the provisions of Articles 4, item VI, of Law No. 4,595 of 1964, Articles 4 and 14 of Law No. 4,829 of November 5, 1965, Article 5-A of Law No. 8,427 of May 27, 1992, Article 1 of Law No. 10,177 of January 12, 2001, Article 5 of Law No. 10,186 of February 12, 2001, Article 21 of Law No. 11,775 of September 17, 2008, and Article 1, sole paragraph, and Article 2, § 2, of Decree No. 8,177 of December 27, 2013,

RESOLVES:

Article 1. The granting of a rebate for the settlement of rural credit operations for working capital and investment contracted until December 31, 2010, under the auspices of Groups “A” and “A/C” of the National Program for Strengthening Family Agriculture (Pronaf), whose risk is borne by the Constitutional Financing Funds of the North (FNO), Northeast (FNE), and Center-West (FCO) or by the Union, which were in a state of default on December 30, 2013, is authorized, observing the following conditions:

I - calculation of the outstanding balance: the outstanding balance must be recalculated with normal financial charges until the settlement date, without the incidence of contractual compliance bonuses, without the calculation of fines, late fees, or any other charges for default or legal fees, except as provided in the sole paragraph;

II - settlement until December 31, 2014: an 80% (eighty percent) rebate on the updated outstanding balance, in substitution for all contractual compliance and settlement bonuses.

Sole paragraph. In operations where contracts provide for adjustment by the Long-Term Interest Rate (TJLP) or financial charges higher than 3.25% a.a. (three and twenty-five hundredths percent per year), the outstanding balance must be recalculated at an effective interest rate of 3.25% a.a. (three and twenty-five hundredths percent per year) until the settlement date.

Article 2. Financial institutions are authorized to renegotiate operations contracted until December 31, 2010, under the auspices of Groups “A” and A/C of Pronaf in a state of default on December 30, 2013, observing the following conditions:

I - deadlines:

a) until June 30, 2014, for the borrower to formally express interest to the financial institution in renegotiating the operation;

b) until November 20, 2014, for the formalization of the renegotiation;

II - calculation of the value to be renegotiated: the outstanding balance must be recalculated with normal financial charges until the renegotiation date, without the incidence of contractual compliance bonuses, without the calculation of fines, late fees, or any other charges for default or legal fees, except as provided in § 1 of this article;

III - mandatory minimum amortization: 5% (five percent) of the value calculated in accordance with item II;

IV - repayment: up to ten years in annual installments, with the first installment due in 2015;

V - financial charges: effective interest rate of 0.5% a.a. (five tenths percent per year) from the date of renegotiation;

VI - compliance bonus: applicable from the date of renegotiation, on each installment paid until the agreed due date, in substitution for all contractual compliance and settlement bonuses:

a) for operations whose enterprises are located in the coverage area of the Superintendency for the Development of the Northeast (Sudene) and in the North region:

1. 50% (fifty percent), when the operation has technical assistance financed;

2. 45% (forty-five percent), when technical assistance was not included in the financing;

b) in other regions:

1. 45% (forty-five percent), when the operation has technical assistance financed;

2. 40% (forty percent), when technical assistance was not included in the financing;

VII - guarantees: only the personal obligation of the debtor;

VIII - risk of the operation: the same risk position as the renegotiated operation.

§ 1. In operations where contracts provide for adjustment by the TJLP or financial charges higher than 3.25% a.a. (three and twenty-five hundredths percent per year), the outstanding balance must be recalculated at an effective interest rate of 3.25% a.a. (three and twenty-five hundredths percent per year) until the date of renegotiation.

§ 2. It is admitted, at the discretion of the financial institution and with the borrower's consent, the substitution of a contractual amendment by a "text stamp" for the formalization of the renegotiations covered by this article, except as provided in § 3.

§ 3. The renegotiation provided for in this article may be carried out through the composition of all operations under the borrower's responsibility related to operations of Groups “A” and “A/C” of Pronaf, via contractual amendment, observing the following conditions:

I - the operations must have the same source of resources;

II - the outstanding balance must be recalculated in the manner provided in item II of the caput of this article.

Article 3. If the recalculation of the debt referred to in item I of Article 1 and item II of Article 2 results in an outstanding balance of zero or less than zero, the operation will be considered settled, and under no circumstances will there be a refund of values to borrowers.

Article 4. Debts already registered in the Active Debt of the Union (DAU) cannot be covered by this Resolution.

Article 5. The individualization of operations of Group “A” and Group “A/C” of Pronaf that fall under the conditions provided in the caput of Article 21 of Law No. 11,775 of September 17, 2008, is admitted, observing the following deadlines:

I - until June 30, 2014, for the borrower to formally express interest to the financial institution in the individualization;

II - until November 20, 2014, for the formalization of contracts.

Article 6. The burden resulting from the settlement and renegotiation covered by this Resolution shall be borne by the Constitutional Financing Funds of the Center-West (FCO), Northeast (FNE), and North (FNO), in operations backed by resources from the respective Funds, or by the General Budget of the Union, in operations backed by other sources of resources.

Article 7. Financial institutions must submit, by the 30th day of the month following the settlement or renegotiation, information on the number of operations and the amount of resources of the settled and renegotiated operations, destined:

I - to the National Treasury Secretariat, when referring to operations backed by resources from the General Budget of the Union (OGU);

II - to the Ministry of Integration, when referring to operations backed by resources from the FCO, FNE, and FNO.

Article 8. The provisions of this Resolution do not apply to operations renegotiated under Resolution No. 4,031 of November 18, 2011.

Article 9. This Resolution enters into force on the date of its publication.

Anthero de Moraes Meirelles
Deputy President of the Central Bank of Brazil