CMN Resolution No. 4801 Authorizes Extension of Repayment for Rural Credit Operations for Producers Affected by Social Distancing Measures Due to the Covid-19 Pandemic

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 April 8, 2020, considering the provisions of Article 4, item VI, of Law No. 4,595 of 1964, Articles 4, 14, and 21 of Law No. 4,829 of November 5, 1965, and Article 5 of Law No. 10,186 of February 12, 2001,

R E S O L V E S:

Article 1. Financial institutions are authorized to extend, until August 15, 2020, the maturity of installments due or to become due in the period from January 1, 2020, to August 14, 2020, of rural credit operations for working capital and investment contracted by rural producers, including family farmers, and their agricultural production cooperatives, whose production marketing was hindered as a result of social distancing measures adopted to mitigate the impacts of the pandemic caused by Covid-19, maintaining the other agreed conditions.

§ 1. When the extension referred to in Article 1 involves rural credit operations or installments for working capital and investment contracted with financial charge equalization by the National Treasury, in accordance with the Rural Credit Manual (MCR 6-1-2-"c"), these must be previously reclassified by the financial institution to Mandatory Resources as defined in MCR 6-2, or another non-equalizable source, and the value of the operation or extended installment must be excluded from the calculation base for the purpose of calculating the payment of equalization.

§ 2. The prohibition referred to in item "a" of MCR 6-2-17-A does not apply to investment operations or installments that are reclassified to the Mandatory Resources source, as defined in MCR 6-2.

Article 2. Section 9 (Transitional Norms) of Chapter 6 (Resources) of the MCR shall be amended as follows:

"14 - Exceptionally, in the period from 9/4/2020 to 30/6/2020, the prohibition referred to in item "b" of MCR 6-2-17-A does not apply to the contracting of financing for price guarantee to the producer (FGPP), as defined in MCR 4-1, with beneficiaries whose production marketing was hindered as a result of social distancing measures adopted to mitigate the impacts of the pandemic caused by Covid-19, and this credit must observe the provisions of MCR 4-1 and the following special conditions:

a) credit limit: R$65,000,000.00 (sixty-five million reais) per beneficiary;

b) financial charges: effective interest rate:

I - up to 6% p.a. (six percent per annum), for family agro-industries and for cooperatives constituted by beneficiaries of the National Program for Strengthening Family Agriculture (Pronaf), provided they have an active Declaration of Aptitude for Pronaf (DAP); and

II - up to 8% p.a. (eight percent per annum), for other beneficiaries;

c) maximum maturity term, observing the adequate term for product marketing and the borrower's revenue flow, with intermediate amortizations admitted at the discretion of the financial institution: up to 240 (two hundred and forty) days.

15 - The balances of FGPP operations carried out with the beneficiaries cited in item I of item "b", of item 14 may be used to fulfill the Pronaf Sub-requirement, as defined in MCR 6-2-10, until the settlement of the operations." (NR)

Article 3. Section 19 (Transitional Credit Lines) of Chapter 10 (National Program for Strengthening Family Agriculture - Pronaf) of the MCR shall be amended as follows:

"12 - The granting of working capital credit to family farmers classified under Pronaf who carry out the activities described in MCR 10-4-2-"a", as well as floriculture, aquaculture, and fishing activities, and whose production marketing was hindered as a result of social distancing measures adopted to mitigate the impacts of the pandemic caused by Covid-19, is authorized, observing the general rural credit norms applied to Pronaf and the following special conditions:

a) purpose: agricultural and livestock working capital credit, which may be allocated up to 40% (forty percent) of the budget for the purposes provided in MCR 10-4-11;

b) credit limit: up to R$20,000.00 (twenty thousand reais) per borrower;

c) financial charges: effective interest rate of up to 4.6% p.a. (four and six-tenths percent per annum);

d) repayment term: up to 36 (thirty-six) months, including up to 12 (twelve) months of grace period;

e) contracting period: until 30/6/2020;

f) source of resources: Mandatory Resources, as defined in MCR 6-2." (NR)

Article 4. Section 2 (Transitional Norms) of Chapter 8 (National Program for Support to Medium Rural Producers - Pronamp) of the MCR shall be amended as follows:

"3 - The granting of working capital credit to rural producers classified under Pronamp who carry out the activities described in MCR 10-4-2-"a", as well as floriculture, aquaculture, and fishing activities, and whose production marketing was hindered as a result of social distancing measures adopted to mitigate the impacts of the pandemic caused by Covid-19, is authorized, observing the general rural credit norms applied to Pronamp, with the granting of credit admitted through a simplified proposal, and the following special conditions:

a) purpose: agricultural and livestock working capital credit, which may be allocated up to 25% (twenty-five percent) of the budget for the purposes provided in MCR 8-1-1-"b"-I;

b) credit limit: up to R$40,000.00 (forty thousand reais) per borrower;

c) financial charges: effective interest rate of up to 6% p.a. (six percent per annum);

d) repayment term: up to 36 (thirty-six) months, including up to 12 (twelve) months of grace period;

e) contracting period: until 30/6/2020;

f) source of resources: Mandatory Resources, as defined in MCR 6-2.

4 - The balances of the operations provided for in item 3 may be used to fulfill the Pronaf Sub-requirement, as defined in MCR 6-2-10, until the settlement of the operations." (NR)

Article 5. This Resolution enters into force on the date of its publication.

Roberto de Oliveira Campos Neto
President of the Central Bank of Brazil