2020 - YEAR OF GENERAL MANUEL BELGRANO

COMMUNICATION “A” 6993 24/04/2020

TO THE FINANCIAL INSTITUTIONS,
TO THE FOREIGN EXCHANGE OPERATORS:

Ref.: Circular
OPRAC 1 - 1024
CAMEX 1 - 841
REMON 1 - 1010
OPASI 2 - 594
RUNOR 1 - 1560
LISOL 1 - 879

Zero-rate credits (Decree No. 332/2020).
Minimum cash. Foreign exchange and changes. Ad- justments. Communication “A” 6992. Updat- ing .

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

“1. Financial institutions must grant the peso financings “Zero-Rate Credit” provided for in Decree No. 332/2020 (and amendments) to all clients who request them.

For the purposes of verifying who is eligible, for up to what amount and at which entity, the entities must only consult the list of beneficiaries made known by AFIP.

From the moment the request is submitted, the financial institution will have up to 2 business days to proceed with the crediting of the financing.

These financings must be credited to the credit card – issued by the entity – of the applicant for the financing; all financial institutions must allow these clients to request the “Zero-Rate Credits” through Internet banking – “homebanking” –. If the applicant does not have a credit card, the financial institution appearing in the AFIP list must:

− issue a credit card with a purchase limit at least equal to the financing credited to them, without allowing the charging of any cost for the issuance of that card or for its maintenance, except in the latter case that the client makes purchases for amounts greater than the credited amount or, once the financing is canceled, wishes to keep the card; or

− proceed with the opening of a “Demand account for purchases in stores” – point 3.9. of the rules on “Savings deposits, salary account and special accounts” –;

− keep the product active – credit card or demand account for purchases in stores – until the total cancellation of the “Zero-Rate Credit”, except that the client expressly requests cancellation;

− allow these clients to process this request entirely through the use of electronic communication mechanisms.

When the entity must issue the card to the client, it must arrange the means to prioritize its delivery in the shortest possible time.

The financing must be credited in three monthly, equal and consecutive installments; the available credit limit will be increased by the amount credited in each installment. From the moment of the first crediting and until the total cancellation of the “Zero-Rate Credit”, the possibility of obtaining cash advances with the card will be prohibited.

To each of those installments will be added the amount equivalent to the payment of the total sums that must be paid for the resulting monthly periods as integrated tax and pension contributions charged to taxpayers adhering to the Simplified Regime for Small Taxpayers or mandatory pension contributions of the regime for self-employed workers. The referred amount will be withheld and deposited by the financial institution with AFIP.

The financing will have a grace period of 6 months from the first crediting. From the following month, it will be repaid in at least 12 equal and consecutive monthly installments.

In the event of partial payment of the settled balance of the credit card, the funds that the financial institutions receive must be allocated first to the cancellation of these installments.

The corresponding account statement must report the collection of each installment as a separate and duly identified concept.

The interest rate that FONDEP will recognize to financial institutions, as provided in article 9°bis of Decree No. 332/2020, will be 15 % nominal annual on the balances of the disbursed financings.

2. Incorporate into the rules on “Minimum cash”, the following:

“1.5.6. Special within the framework of Decree No. 332/2020 (and amendments).

The requirement will be reduced by an amount equivalent to 60 % of the sum of the “Zero-Rate Credits” granted within the framework of article 9° of Decree No. 332/2020 (and amendments).

Its average monthly balance in the period prior to that of the computation of the requirement will be considered.”

3. Replace the last paragraph of point 1.5. of the rules on “Minimum cash” with the following:

“The financings computed for the deduction of points 1.5.1. and 1.5.4. to 1.5.6. may only be computed in one of the aforementioned points.”

4. Establish that persons who access “Zero-Rate Credits” granted within the framework of article 9° of Decree No. 332/2020 (and amendments) may not, until their total cancellation:

4.1. access the foreign exchange market to carry out operations corresponding to formation
of external assets of residents, remittance of family assistance and derivatives, under the terms of point 3.8. of the Consolidated Text on the rules of “Foreign exchange and changes”;

4.2. sell securities with settlement in foreign currency or transfer them to other depository
entities.

5. Entities authorized to operate in foreign exchange must request from clients who require access to the foreign exchange market to carry out operations of formation of external assets, remittance of family assistance and operations with derivatives, set forth in point 3.8. of the rules of “Foreign exchange and changes”, a sworn declaration stating that they are not a beneficiary of the “Zero-Rate Credits” granted within the framework of article 9° of Decree No. 332/2020 (and amendments).”

Likewise, we send you the sheets that, replacing those previously provided, should be incorporated –including the provision made known through Communication “A” 6992– into the rules on “Minimum cash” and “Cash transactions to be settled and forward, repos, collateralized loans, other derivatives and mutual investment funds”. In this regard, it is recalled that on this Institution's website www.bcra.gob.ar, by accessing “Financial System - LEGAL AND REGULATORY FRAMEWORK - Compilations and summaries - Ordered texts of general regulations”, you will find the amendments made with texts highlighted in special characters (strikethrough and bold).

We greet you attentively.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

Matías A. Gutiérrez Girault
Issuance Manager of Regulations

Darío C. Stefanelli
Principal Manager of Issuance and
Regulatory Applications

ANNEX

	Rates in %
Concept	Group “A” and G-SIB not included in that group	Remaining entities
1.3.12. Time deposits and investments constituted in the name of minors with funds received as a gift.	0	0
1.3.13. Demand deposits in pesos that constitute the assets of money market mutual funds (“money market”).	0	0

1.3.14. In the case of transactions in pesos, when the locality in which the operating office where they are made is located, in accordance with the provisions of the rules on “Categorization of localities for financial entities”, belongs to categories II to VI, the rates provided for demand placements shall be reduced by 2 percentage points and for time placements by 1 percentage point up to a minimum of zero (including point 1.3.11.). In both cases, it does not include deposits in securities. Time deposits in pesos arranged remotely (e.g. through “home banking”, web time deposit, etc.) shall receive the same treatment as those captured in categories II to VI.

1.3.15. Financial entities included in Group “A” and branches or subsidiaries of G-SIBs not included in that group may integrate the peso requirement –for the period and daily– with “National Treasury Bonds in pesos at fixed rate due November 2020” up to:

a) 5 percentage points of the rates provided in points 1.3.1., 1.3.2.1., 1.3.3. and 1.3.9. and in subsections i) and ii) of points 1.3.5.1. and 1.3.7.1.

b) 2 percentage points of the rates provided in subsection iii) of points 1.3.5.1. and 1.3.7.1.

1.3.16. Financial entities may integrate the peso requirement –for the period and daily– with BCRA Liquidity Bills (LELIQ) and/or BCRA Notes (NOBAC) in accordance with the following:

1.3.16.1. Included in Group “A” and branches or subsidiaries of G-SIBs not included in that group: up to 16 percentage points of the rate provided in subsection i) of point 1.3.5.1. and in point 1.3.9.; up to 13 percentage points of the rates provided in subsections ii) of point 1.3.5.1.; up to 3 percentage points of the rates provided in subsections i) to iii) of point 1.3.10. and in point 1.3.11. and up to 2 percentage points of the rate provided in subsection iii) of point 1.3.5.1.

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1.3.16.2. Entities not included in the preceding point: up to 3 percentage points of the rates provided in subsections i) and ii) of point 1.3.5.1., in point 1.3.9., in subsections i) to iii) of point 1.3.10. and in point 1.3.11. and up to 2 percentage points of the rate provided in subsection iii) of point 1.3.5.1.

For the integration with “National Treasury Bonds in pesos at fixed rate due November 2020”, LELIQ and/or NOBAC as provided in points 1.3.7.1., 1.3.15. and 1.3.16. to be admitted, they must be valued at market prices and be deposited in Subaccount 60 minimum cash enabled in the Central Registry and Settlement of Public Debt Instruments, Monetary Regulation and Financial Trusts (CRyL).

1.4. Residual term.

1.4.1. Determination.

1.4.1.1. General case.

The residual term of each time obligation is equivalent to the number of days remaining until its maturity.

1.4.1.2. Time investments.

In the cases of time investments, the following criteria shall apply:

i) At constant term.

The remaining term until maturity shall be considered, taking into account the automatic extension or, where applicable, the term arising from the exercise of the option to revoke it.

ii) With early cancellation option.

The remaining term until the date on which the investor may exercise the early cancellation option shall be considered, to the extent that the investor is the holder of the right, except for deposits with early cancellation option in Purchasing Value Units updatable by “CER” - Law 25.827 (“UVA”), or the term originally agreed, in the event that the entity is the holder of that right.

iii) With renewal option for a determined term.

The remaining term until maturity shall be considered, taking into account for this purpose the term that would result from the eventual exercise of the extension option by the entity, to the extent that it is the holder of the right.

When the investor is the holder of that right, the term originally agreed or, where applicable, the term resulting from the renewal when the option has been exercised shall be considered.

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1.4.1.3. Refinanceable time obligations.

When the financial entity enters into agreements or option contracts that ensure the total or partial refinancing of time obligations, for the purpose of establishing the residual term until maturity of the obligations, the term arising from making use of those facilities shall be considered, for the portion of the liability covered by the agreement.

This criterion is applicable when the agreement is entered into with a foreign bank that complies with the provisions of point 3.1. of the rules on "Credit Assessments" – requiring for that purpose at least an international risk rating of "investment grade" –, to the extent that it is not the parent company or the controlling or controlled company or branches of the local entity.

1.4.1.4. Liabilities for foreign financial lines (not linked to the financing of foreign trade operations).

i) With early cancellation clauses.

To determine the residual term, the remaining term until the date on which the foreign entity is contractually entitled to require early cancellation, or the originally agreed term when it is subject to a decision of the local entity, shall be taken into account.

ii) Without early cancellation clauses.

The remaining term until maturity shall be taken into account to the extent that early cancellation is explicitly excluded by any of the parties. Otherwise, they shall be treated as demand liabilities.

1.4.2. Fixed-term deposits.

In the case of fixed-term deposits in pesos, the established rates – according to the breakdown by terms set – shall be applied to the daily balances of the aforementioned liabilities determined in accordance with point 1.2.

In the case of fixed-term deposits in foreign currency, the established rates – according to the breakdown by terms set – shall be applied to the amounts resulting from multiplying the total daily balance of those liabilities – recorded in the corresponding month – by the percentages resulting from the residual term structure of the previous month, considering the number of days remaining in that period until the maturity of each liability, counted from each of the days of said period.

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1.4.3. Remaining term operations.

In these cases – including term investments and computable liabilities with foreign banks and correspondents –, the residual terms shall be equivalent to the number of days remaining until the maturity of each liability, counted from each of the days of the period prior to the one corresponding to the minimum cash integration, in the case of peso deposits, or of the same period in the case of operations in foreign currency or securities.

The requirement shall arise from applying the established rates to the daily balances of the aforementioned liabilities according to the different residual term brackets set.

In the particular case of liabilities payable in principal installments, the amounts of amortization services maturing within the year, counted from each of the days of the period prior to the one corresponding to the minimum cash in pesos or of the same period in the case of liabilities in foreign currency, shall be considered independently for the purposes of applying to them the rate that is applicable according to the number of days remaining until their maturity.

For fixed-term deposits and for the remaining term operations, both in pesos, in September and February the residual terms of August and January, respectively, shall be considered.

1.5. Reduction of the requirement on average in pesos.

1.5.1. Based on certain financings.

The requirement shall be reduced in accordance with the share in the total financing to the non-financial private sector in pesos at the entity of financing to micro, small and medium-sized enterprises (MiPyMEs) in the same currency – in accordance with the definition contained in the rules on "Determination of the condition of micro, small or medium-sized enterprise" – considering that classification at the time of granting, according to the following table:

Share of financing to MiPyMEs with respect to total financing to the non-financial private sector, at the entity. In %	Deduction (on the total of the concepts included in pesos). In %
Less than 4	0,00
Between 4 and less than 6	0,75
Between 6 and less than 8	1,00
Between 8 and less than 10	1,25
Between 10 and less than 12	1,50
Between 12 and less than 14	1,75
Between 14 and less than 16	2,00
Between 16 and less than 18	2,20
Between 18 and less than 20	2,40
Between 20 and less than 22	2,60
Between 22 and less than 24	2,80
Between 24 and less than 26	3,00
Between 26 and less than 28	3,20
Between 28 and less than 30	3,40
30 or more	3,60

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Financings granted to other financial entities and to non-financial credit providers – registered in the corresponding registries authorized by the SEFyC – may be included in that sum, provided that: i) within 3 business days from the date on which they receive the assistance, those entities use the funds to grant financings to MiPyMEs under the conditions of this point and ii) they have a special report from an external auditor – registered in the "Registro de auditores" of the SEFyC –, which complies with the provisions of point 1.5.4. of the rules on "Efectivo mínimo".

This deduction may not exceed 4% of the concepts in pesos subject to requirement on average, for the month prior to the computation month.

1.5.6. Special within the framework of Decree No. 332/2020 (and amendments).

The requirement shall be reduced by an amount equivalent to 60% of the sum of the “Zero Rate Credits” granted under Article 9 of Decree No. 332/2020 (and amendments).

Its average monthly balance in the period prior to the period of computation of the requirement shall be considered.

The financings computed for the deduction of points 1.5.1. and 1.5.4. to 1.5.6. may only be computed in one of the aforementioned points.

1.6. One-time increases in requirement due to liability concentration.

When an excessive concentration of liabilities is verified (in holders and/or terms), 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 reserves may be set on the included 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 reserve and/or the total private-sector deposits in the institution.

1.7. Transfers.

1.7.1. Admitted margin.

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

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

Where

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

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

ENI (n-1): requirement not integrated in period “n-1”.

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

1.7.2. Period of use.

The admitted transfer of the requirement not integrated in each period to the following position may be made up to a maximum of six periods, counted from the first– inclusive– in which its use is opted for in accordance with the provisions above or from the first position immediately following that in which the transferred defects are offset or a charge is paid on them.

For its calculation, the numerals transferred from the period to which they correspond shall be computed, divided by the number of days of the period to which the transfer is made.

1.7.3. Optional treatment for two-month periods.

It may be opted to integrate in the months of July and December of each year the transfers of the requirement not integrated in pesos from the previous month, maintaining the computation method in force for the requirement of each two-month period.

For this purpose, those responsible for managing the institution's liquidity policy must inform the Superintendency of Financial and Exchange Institutions (SEFyC) that they have exercised that option.

1.8. Defect in the application of resources in foreign currency.

The defect in the application of resources corresponding to foreign currency deposits, net of cash balances in the institutions, in custody in other financial institutions, in transit and in Securities Transporters (TV), determined in a month, shall be computed for an equivalent amount in the calculation of the minimum cash reserve requirement for that same period of the respective currency.

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1.9. Increase in the requirement for noncompliance with the rules on “Credit line for productive investment”.

The defect in the application of the 2013 Quota verified –as of 1.7.13 or 1.1.14, as the case may be, when it is the first tranche and 1.1.14 or 1.7.14, as the case may be, when it is the second tranche– shall be computed for an equivalent amount in the calculation of the minimum cash reserve requirement on average in pesos, as of those dates and for 24 months.

The defect in the application of the 2014 Quota verified –as of 1.7.14 or 1.1.15, as the case may be, when it is the first tranche and as of 1.1.15 or 1.7.15, as the case may be, when it is the second tranche– shall be computed for an equivalent amount in the calculation of the minimum cash reserve requirement on average in pesos, as of those dates and for 24 months.

Noncompliance with the provisions of the second paragraph of point 3.5.3.2. of the rules on “Credit line for productive investment” (register as of 30.9.14 agreements for at least 50% of the total amount of the second tranche of the 2014 Quota and at least 50% to MSMEs) shall generate an increase in the minimum cash reserve requirement on average in pesos for an equivalent amount as of the day following its verification (1.10.14) for 3 months.

Noncompliance with the provisions of the third paragraph of point 3.5.4.1. of the rules on “Credit line for productive investment” (register as of 31.3.15 agreements for at least 30% of the total amount of the first tranche of the 2015 Quota) shall generate an increase in the minimum cash reserve requirement on average in pesos for an equivalent amount as of the day following its verification (1.4.15) for 3 months.

Noncompliance with the provisions of the third paragraph of point 3.5.4.2. of the rules on “Credit line for productive investment” (register as of 30.9.15 agreements for at least 30% of the total amount of the second tranche of the 2015 Quota) shall generate an increase in the minimum cash reserve requirement on average in pesos for an equivalent amount as of the day following its verification (1.10.15) for 3 months.

The failure to apply the second tranche of the 2015 Quota verified – as of 1.4.16 or 1.7.16, as the case may be – shall be computed for an equivalent amount in the calculation of the minimum cash requirement on average in pesos, as from said dates and for 24 months.

This is without prejudice to the provisions of point 8.3. of the rules on “Credit line for productive investment”.

Version: 2nd. COMMUNICATION “A” 6993
Effective date:
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MINIMUM CASH


ORDERED TEXT			SOURCE RULE					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” 6992
	1.3.14.		“A” 5356			1.		According to Com. “A” 6616 and 6706.
	1.3.15.		“A” 6526					According to Com. “A” 6532, 6550, 6587, 6616 and 6706.
	1.3.16.		“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, 6857, 6910 and 6937.
	1.5.3.		“A” 6740			1.
	1.5.4.		“A” 6858			1.		According to Com. “A” 6901 and 6907.
	1.5.5.		“A” 6937			2.		According to Com. “A” 6943.
	1.5.6.		“A” 6993			2.
	1.5.	last	“A” 6858			2.		According to Com. “A” 6965 and 6993.
	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	sole	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.

CENTRAL BANK
OF THE ARGENTINE REPUBLIC

SPOT TRANSACTIONS TO BE SETTLED AND FORWARD, REPOS, GUARANTEES, B.C.R.A.
OTHER DERIVATIVES AND WITH MUTUAL INVESTMENT FUNDS
Section 8. Daily net position in LELIQ.

8.1. Daily net position.

The daily net position that financial institutions record in BCRA Liquidity Bills (LELIQ) may not exceed the greater of:

8.1.1. Its computable equity responsibility (RPC) for the previous month.

8.1.2. 100% of the monthly average of daily balances of total deposits in pesos –excluding those of the financial sector– and the residual value of its negotiable obligations in pesos –issued up to 8.2.19–, during the current month.

LELIQ included in passive repo transactions carried out by financial institutions with the BCRA are not counted within the aforementioned limit.

8.2. Special provisions.

8.2.1. From 17.4.2020 and until 30.4.2020, the net LELIQ position (not counting those admitted for the integration of the minimum cash requirement in pesos, provided in point 1.3.16. of the rules on “Minimum cash”) may not exceed 90% of the excess holdings recorded as of 19.3.2020. In order to comply, they must decrease their net position as they collect the LELIQ.

8.2.2. From May 2020, the net LELIQ position (not counting those admitted for the integration of the minimum cash requirement in pesos, provided in point 1.3.16. of the rules on “Minimum cash”), may not exceed –at all times– that arising from the following table, according to the financings computed from the previous period:

Financings as a percentage of potential credit to MSMEs	Excess net position admitted (as a percentage of the excess holdings recorded as of 19.3.2020)
100 %	90 %
< 100 % up to 75 %	85 %
< 75 % up to 50 %	80 %
< 50% up to 25 %	75 %
< 25 %	70 %

where “potential credit to MSMEs” is defined for this scheme as the sum of:

− 10% of the LELIQ holdings that exceed those admitted for the integration of the minimum cash requirement in pesos, provided in point 1.3.16. of the rules on “Minimum cash”, recorded as of 19.3.2020; and

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Effective date:
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