Credit management, classification of debtors, credit risk splitting, credit rating, guarantees, minimum bad debt provisions, adjustments — BCRA — AR

2018 - YEAR OF THE CENTENARY OF THE UNIVERSITY REFORM

COMMUNICATION “A” 6558
04/09/2018

TO FINANCIAL INSTITUTIONS,
TO MUTUAL GUARANTEE SOCIETIES,
TO NON-FINANCIAL COMPANIES ISSUING CREDIT CARDS, TO ADMINISTRATORS OF CREDIT PORTFOLIOS OF FORMER FINANCIAL INSTITUTIONS, TO TRUSTEES OF FINANCIAL TRUSTS INCLUDED IN THE LAW OF FIN- ANCIAL INSTITUTIONS, TO PUBLIC-SECTOR GUARANTEE FUNDS, TO OTHER NON-FINANCIAL CREDIT PROVIDERS, TO NON-FINANCIAL COMPANIES ISSUING PURCHASE CARDS:

Ref.: Circular
OPRAC 1 - 954
LISOL 1 - 806

Credit management. Classification of debtors. Splitting of credit risk. Credit rating. Guarantees. Minimum provisions for bad debt risk. Adjustments .

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

“1. Incorporate as subsection vi) in point 1.1.3.2. of the rules on “Credit management” the following:

“vi) In the cases of credit instruments assigned in favor of the entity without recourse to the assignor, the latter must complete the file with the data that allow identification of the party obligated to payment –drawer, endorser, acceptor or guarantor of the instrument– and may assign it the credit margin through specific evaluation methods, in accordance with the provisions of subsection b) of point 1.1.3.3., to the extent that the assigned instruments come from sale or service provision transactions corresponding to the assignor's activity and with respect to the party obligated to payment the following is met:

− it is not a natural or legal person related to the entity in accordance with point 2.2. of the rules on “Splitting of credit risk”;

− it does not record debt in the “Central de deudores del sistema financiero” with a classification other than “in normal situation”; and

− it does not record in the “Central de cheques rechazados” check rejections for lack of sufficient available funds credited in account and/or authorization to overdraw that, in the last 24 months, had not been canceled within 90 calendar days of such rejection.

The entity must also complete the file of the party obligated to payment with the evidence of the verifications of the conditions provided in this point.
At the entity's option, it may apply the provisions of this subsection in the cases of credit instruments acquired with recourse to the assignor.”

2. Replace the third paragraph of subsection ii) of point 1.1.3.2., subsections i) to iii) of subsection b) of point 1.1.3.3. and point 1.3.6. of the rules on “Credit management” with the following:

“The file must contain information about the maximum global credit margin for which the client qualifies in accordance with each entity's credit policy, as well as the margin that has actually been granted to it, including the financing agreed and the contingent liabilities assumed with respect to it, whatever the concept or credit line, and detail the credit evaluation method applied, and the methods may differ when new assistance is granted.”

“i) Covered borrowers: natural and legal persons, not related to the financial institution.

ii) Individual limit.

− For natural persons the estimated installment/income ratio must not exceed 50 %.

For the purposes of verifying the maximum ratio provided above, the installments of all financing of the financial institution that have periodic amortization must be taken into account, without considering the installments of loans from other entities.

Consequently, the margins agreed for current account overdrafts and the purchase limits of credit cards –in both cases, both the used and the available–, as well as pre-agreed personal loans –to the extent that they have not yet been formalized or disbursed to the client–, will not form part of the numerator of the estimated installment/income ratio because they do not have periodic amortization. However, those installments that the client has for financed purchases under the credit card system must be considered within the concept of “installments”.

The income and installments to be considered will be those of the debtor and/or, where applicable, of the co-debtors.

− For MSMEs and legal persons, not related to the entity, the capital owed at no time may exceed in its entirety the equivalent of 50 % of the reference amount established in point 1.10.

iii) Global limit for financing to MSMEs and non-related legal persons.

40 % of the entity's computable equity responsibility for the month prior to the corresponding one.”

“1.3.6. Assignment of rights or credit instruments without recourse to the assignor.

The obligation to present the sworn statement on whether or not they have the character of related to the entity will fall both on the signer or drawer of the documents and on the direct beneficiary of the assistance.

When the signer or drawer of the documents is not a client of the financial institution, it will not be mandatory to require the presentation of the sworn statement referred to in the preceding paragraph. In its replacement, the financial institution must verify in its records its condition of related or not to the entity –leaving record of it in the file that must be opened for that purpose– in accordance with the provisions of Section 2. of the rules on “Splitting of credit risk”.

3. Replace points 3.3.3., 4.6. and 5.1.1.1., the first paragraph of point 5.1.1.2. and point 5.1.2.4. of the rules on “Classification of debtors” with the following:

“3.3.3. The exercise of the option to group commercial financing up to the equivalent of the reference amount established in point 3.7., whether or not they have preferred collateral, together with consumer or housing loans.”

“4.6. Financings – without recourse for the transferor – covered by credit insurance for commercial risk and by credit risk insurance “with public buyer coverage”.

The insurance company shall be classified based on delinquency according to the criteria applicable to the consumer portfolio, taking into account the due date of the first unpaid overdue obligation, from the moment in which, the claim not having been rejected, the lack of payment of the claim is verified after the deadlines committed in the policy have expired (180 or 270 days, as applicable).

Those who are debtors in transfer operations without recourse for the transferor shall not be subject to classification.

The preceding criteria shall only apply when dealing with operations of the title that, at origin, have met the pertinent requirements established in the rules on “Guarantees”.”

“5.1.1.1. Consumer or housing loans.

Loans of this class that exceed the equivalent of the reference amount established in point 3.7. and whose repayment is not linked to fixed or periodic income of the client but to the evolution of their productive or commercial activity shall be included within the commercial portfolio.”

“5.1.1.2. At the option of the entity, commercial financing up to the equivalent of the reference amount established in point 3.7., whether or not they have preferred collateral, may be grouped together with consumer or housing loans, in which case they shall receive the treatment provided for the latter.”

“5.1.2.4. Commercial financing up to the equivalent of the reference amount established in point 3.7., whether or not they have preferred collateral, when the entity has opted for it.

4. Replace points 1.2.2. and 1.4., heading iii) of point 5.3.1.2. and point 6.1.2.2. of the rules on “Credit risk splitting” with the following:

“1.2.2. Discount of credit instruments (points 1.1.10. and 1.1.14. of the rules on “Guarantees”): to the drawer, endorser, acceptor or guarantor taken into account to consider the operation with preferred collateral “A”, provided that the entity has – or can open – a credit file, or to the transferor, at the option of the entity.”

“1.4. Financings covered by credit insurance.

Financings incorporated by transfer without recourse for the transferor, which are covered by credit insurance for commercial risk that constitute preferred collateral “A” or “B” (points 1.1.16. and 1.2.6. of the rules on “Guarantees”), shall be allocated to the corresponding insurance company.”

“iii) To each credit insurance company, according to point 1.4. 15 %”

“6.1.2.2. Credit insurance (point 1.2.6. of the rules on “Guarantees”).”

5. Incorporate into point 2.2.8.1. of the rules on “Credit grading” the following:

“ix) Commercial operations covered with credit insurance.”

6. Replace point 2.2.8.2. and the first paragraph of point 2.2.10. of the rules on “Credit grading” with the following:

“2.2.8.2. Coverage margin.

Preferred collateral shall be computed by the coverage margin provided by the rules on “Guarantees”.”

“2.2.10. Loans (net of amortizations produced) to natural or legal persons or groups or economic conglomerates not related that, in total for each client, do not exceed the equivalent of the reference amount established in point 2.3.”

7. Repeal point 2.2.15. of the rules on “Credit grading” and the last paragraph of point 1.1.10.2. of the rules on “Guarantees”.

8. Replace the first paragraph of point 1.1.16. and points 1.2.6. and 3.1.20. of the rules on “Guarantees” with the following:

“1.1.16. Internal (domestic) and export commercial credit insurance – operations without recourse for the transferor – that cover commercial risk and, if applicable, extraordinary risks (borne by the National State, Law 20.299), including credit risk insurance “with public buyer coverage”.”

“1.2.6. Credit insurance, to the extent that the periods for effective payment of claims for commercial risk exceed 180 days without exceeding 270 days counted consecutively from the maturity of the credits and the other requirements provided in point 1.1.16. are observed.

“3.1.20. Credit insurance (points 1.1.16. and 1.2.6.): 100 %.”

9. Replace the first paragraph of point 2.1.2.5. of the rules on “Minimum provisions for bad debt risk” with the following:

“2.1.2.5. Financings – without recourse for the transferor – covered by credit insurance for commercial risk and by credit risk insurance “with public buyer coverage” shall be subject to the constitution of the following provisions:”

On the other hand, we send you in annex the sheets that, replacing those previously provided, should be incorporated into the reference rules. Likewise, it is recalled that on the page of this Institution www.bcra.gob.ar, accessing “Sistema Financiero – MARCO LEGAL Y NORMATIVO – Ordenamientos y resúmenes – Textos ordenados de normativa general”, you will find the modifications made with texts highlighted in special characters (strikethrough and bold).

We greet you attentively.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

Darío C. Stefanelli
Senior Issuance Manager and
Aplicaciones Normativas

Agustín Torcassi
Subgerente General de Normas

ANNEX

When, in accordance with the rules on “Debtor Classification,” it is not appropriate to assess the debtor's repayment capacity because the debt is covered by preferred “A” guarantees, it shall not be mandatory to include in the customer's file the cash flow, the financial or accounting statements –as applicable– or any other information necessary to carry out that analysis.

The evaluations that must be carried out as a result of the application of the rules on “Debtor Classification” and “Credit Rating” shall be recorded and, likewise, they must contain data that allow verifying compliance with the regulations established in credit matters.

With respect to customers in the consumer portfolio whose respective salaries the lending entity credits to an account, the entity may use that information as evidence of their payment capacity.

Additionally, where applicable, the requirements referred to in points 1.2. to 1.5. shall be recorded.

1.1.3.2. Specific aspects.

i) In matters of the evaluations provided for by the rules on “Debtor Classification,” according to which the reviews carried out and the classification assigned must be recorded, it shall be permitted for the classification to be kept in separate spreadsheets, provided that the procedure adopted –which must be described in the “Manual of classification and provisioning procedures”– allows precise identification of the classification assigned to each customer from the spreadsheet to the file and vice versa.

ii) The file must contain information about the entirety of the credit margin assigned to the customer and contingent liabilities assumed with respect to the customer, whatever the concept or credit line.

On the other hand, the updated balance of all financings granted –which shall include the facilities assigned by all subsidiaries and operating units of the entity– must be available, broken down by concept, according to the accounting information system used by the entity, at the location where the customer's file is kept or at the head office, where a copy must be kept at the latter, in accordance with the pertinent rules.

The file must contain information about the maximum global credit margin for which the customer qualifies in accordance with each entity's credit policy, as well as the margin actually granted to the customer, including the financings agreed and the contingent liabilities assumed with respect to the customer, whatever the concept or credit line, and must detail the credit evaluation method applied, it being possible for the methods to differ when new assistance is granted.

On the other hand, the file must contain the updated balance of all financings granted, which shall include the facilities assigned by all subsidiaries and operating units of the entity.

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When it is the policy of the financial entity to break down the global margin and/or the margin actually granted –by type or line of loan–, that information must appear in each customer's credit file, which must be located at the place where the account is kept or at the head office, in accordance with the pertinent rules.

The policy that each entity adopts to define the credit margins it assigns to each customer must be approved by its Board of Directors or equivalent authority.

iii) In the case of correspondents, the file must contain the information and other elements of judgment that allow knowing their identification, rating, credit margins and any other data linked to that relationship, in accordance with the provisions of the rules on “Correspondent Accounts.”

iv) In the case of loans to natural persons with a first-degree mortgage guarantee on a dwelling or with a first-degree pledge guarantee on automobiles or light utility vehicles 0 km for private, commercial or rental use, the credit, legal and administration folders shall be attached to the debtor's file when the guidelines provided in the respective origination and administration manuals are observed.

v) When the financial entity has contracted life insurance on outstanding balance for its customers who are users of financial services, the file must contain the identification of the policy contracted for that purpose.

vi) In the case of credit instruments assigned in favor of the entity without recourse to the assignor, the entity must complete the file with the data that allow identification of the party obligated to pay –drawer, endorser, acceptor or guarantor of the instrument– and may assign it a credit margin through specific evaluation methods, in accordance with the provisions of subsection b) of point 1.1.3.3., to the extent that the assigned instruments come from sale operations or provision of services corresponding to the assignor's activity and, with respect to the party obligated to pay, the following is met:

− it is not a natural or legal person related to the entity in accordance with point 2.2. of the rules on “Credit Risk Fragmentation”;

− it does not record debt in the “Central de deudores del sistema financiero” with a classification other than “in normal situation”; and

− it does not record in the “Central de cheques rechazados” check rejections for lack of sufficient available funds credited to the account and/or overdraft authorization that, in the last 24 months, had not been canceled within 90 calendar days of the occurrence of said rejection.

The entity must also complete the file of the party obligated to pay with the evidence of the verifications of the conditions provided for in this point.

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At the entity's option, the provisions of this section may be applied in the case of credit instruments acquired with recourse against the transferor.

1.1.3.3. Special transactions.

a) Of reduced amount.

It shall only be required that the file contain the data that allow the identification of the client, in accordance with the rules on "Valid identification documents".

i) Borrowers.

Natural persons not related to the financial entity, to the extent that they have not received financing under the terms set forth in point 1.1.3.4., subsection a).

ii) Individual limit.

The outstanding principal may at no time exceed the equivalent of 8 (eight) times the Minimum, Vital and Mobile Wage established by the National Council for Employment, Productivity and the Minimum, Vital and Mobile Wage for monthly-paid workers who work the full legal workday per client, under the French or German amortization system.

iii) Global portfolio limit.

20 % of the entity's computable equity responsibility (RPC) for the month prior to the corresponding month. This limit shall be computable for the purposes of calculating the global limit set forth in point 1.1.3.4., subsection a), paragraph iii), in the event that the entity has also granted financing under that modality (loans for micro-entrepreneurs).

iv) Maximum installment frequency.

The frequency of installment payment may not be for a period longer than monthly.

v) Classification of the client and information to the "Central de Deudores del Sistema Financiero".

It shall be carried out on the basis of the objective guidelines as established in Section 7. of the rules on "Classification of debtors".

Likewise, the data that the financial entity, at its discretion, deems necessary for its credit assessment shall be included.

The granting of this type of assistance does not prevent, in the event that other credit facilities are granted to the same borrower, the provisions regarding the content of the credit file established in point 1.1.3.1. from being observed.

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b) Assignment through specific evaluation methods ("screening" systems and "credit scoring" models) to decide on the granting of the credits referred to in subsection ii).

"Screening" systems are understood as the set of steps and decision rules that gather the experience accumulated in the granting of credits, the monitoring of their subsequent behavior and the entity's credit policy.

This method must be applied systematically and updated periodically, in order to draw conclusions regarding the granting of credits and assign financing margins.

On the other hand, "credit scoring" models are mathematical or statistical-econometric methods used to measure the risk and/or probability of default of credit applicants.

Both techniques must be based on the variables that financial entities consider relevant to measure the risk of uncollectibility associated with each debtor and class of credit, and may use the same type of information.

The methodology and information used to replace the demonstration of income through specific documentation must ensure that the assessment of repayment capacity is incorporated into the result of the "screening" or "credit scoring" used for the purposes of inferring credit behavior (probability of repayment of obligations in the future).

Likewise, the aforementioned methodologies must allow estimating the client's income level.

Additionally, in both cases, the predictions made must be compared with the credit behavior finally observed, in order to adopt, where appropriate, the adjustments deemed pertinent.

The following conditions must be observed:

i) Covered borrowers: natural and legal persons, not related to the financial entity.

ii) Individual limit.

− For natural persons, the estimated installment/income ratio must not exceed 50 %.

For the purposes of verifying the maximum ratio provided above, the installments of all financings of the financial entity that have periodic amortization must be taken into account, without considering the installments of credits from other entities.

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Consequently, the margins granted for current account overdrafts and the purchase limits of credit cards –in both cases, both the used and the available–, as well as pre-agreed personal loans –to the extent that they have not yet been formalized or disbursed to the client–, shall not form part of the numerator of the estimated installment/income ratio because they do not have periodic amortization. However, installments for purchases financed under the credit card system must be considered within the concept of "installments".

The income and installments to be considered shall be those of the debtor and/or, where applicable, of the co-debtors.

− For MSMEs and legal persons, not related to the entity, the outstanding principal may at no time exceed, in the aggregate, the equivalent of 50 % of the reference amount established in point 1.10.

iii) Global limit for financings to MSMEs and non-related legal persons.

40 % of the entity's RPC for the month prior to the corresponding month.

iv) Classification of the client and information to the "Central de Deudores del Sistema Financiero".

It shall be carried out on the basis of the objective guidelines as established in Section 7. of the rules on "Classification of debtors".

v) The client's file must record the evaluation carried out in accordance with this procedure and, in the case of natural persons, the estimated income of the debtor and/or, where applicable, of the co-debtors.

Likewise, it may contain other elements that the financial institution, at its discretion, deems necessary for the credit evaluation, without this constituting a necessary condition for its application.

The entities must carry out a detailed description of the procedure adopted for the evaluation of the client and the assignment of differentiated credit margins, if applicable, according to the class of credit.

vi) This procedure must have the prior opinion of:

− The highest-ranking official of the credit or commercial area responsible for deciding on credit matters.

− General Manager or equivalent authority.

− Credit Committee, unless it does not exist in the functional structure of the entity.

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Likewise, it will be necessary to have the approval of the aforementioned procedure by the Board of Directors, Board of Administration or equivalent authority of the financial institution.

vii) In cases where the evaluation of the payment capacity is carried out directly on the basis of supporting documentation of the borrower's income or where the provisions of the fourth paragraph of point 1.1.3.1. apply, even when the methods indicated in this section are used in a complementary manner, the provisions regarding the content of the file established in point 1.1.3.1. must be observed.

1.1.3.4. Loans for microentrepreneurs and financing to Microcredit Institutions.

a) Loans for microentrepreneurs.

These are understood as loans destined to low-income natural persons to meet needs related to productive, commercial and service activities, training for microentrepreneurs and financing destined to the improvement of the single dwelling and family housing, in which specific methodologies are used for the prior evaluation, granting and monitoring of the financial assistance in accordance with the provisions of subsection v) of this point.

Additionally, and to the extent that they have available financing margin within this class of credit, microentrepreneurs may be granted credits for the acquisition of goods or services for consumption.

i) Borrowers. Natural persons or associative groups of natural persons who carry out activities on their own account, not linked to the financial institution.

Borrowers who have received financial assistance under this modality may not access the reduced-amount financing referred to in point 1.1.3.3., subsection a).

ii) Individual limit. The outstanding principal may at no time exceed the amount equivalent to 50 (fifty) times the Minimum, Vital and Mobile Wage established by the National Council of Employment, Productivity and the Minimum, Vital and Mobile Wage for monthly workers who complete the full legal working day per client. In the event that the client already has a credit granted according to the provisions of point 1.1.3.3., subsection a), the residual principal owed for both types of financing may not exceed the aforementioned limit.

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iii) Global limit for financing. 30 % of the RPC of the entity of the month prior to the corresponding one. 5 % of the RPC of the entity of the month prior to the corresponding one, with respect to the total financing in which the periodicity of any of the installments is greater than 90 days or has grace periods greater than that term. The total financing granted under the modalities established in points 1.1.3.3., subsection a) – without exceeding the specific limit of 20 % – and 1.1.3.4., subsection a), may not exceed the aforementioned limit of 30 %.

iv) Periodicity of the installment. Depending on the economic cycles corresponding to the activity carried out by the client.

v) Origination of credits and evaluation and monitoring criteria. The granting of financing may be carried out directly to the credit applicant or through the management of legal persons that meet the characteristics provided in subsection b) of this point. For the prior evaluation, granting and monitoring of financial assistance under this modality, credit methodologies must be used that provide, among other techniques, the following: − observation of quantitative and qualitative aspects in order to determine the repayment capacity of clients, − credit evaluation, monitoring and/or collection carried out “in-situ”, − granting of group credits, − granting of sequential credits (agreement of a first short-term small-amount credit, which once canceled, may be granted for larger amounts and terms and/or lower interest rates, based on compliance with the assumed obligations).

vi) Classification of the client and information to the “Central de deudores del sistema financiero”. The classification of the debtor must be carried out in accordance with the periodicity and other conditions established for the consumer or housing portfolio, as established in Section 7. of the rules on “Classification of debtors”.

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vii) In cases where the evaluation of the payment capacity is carried out directly on the basis of supporting documentation of the borrower's income, even when the methods indicated in this point are used in a complementary manner, the provisions regarding the content of the file established in point 1.1.3.1. must be observed.

b) Financing to Microcredit Institutions.

i) Borrowers.

Legal entities not related to the financial institution (except for those companies in which the financial institution holds an equity interest under the terms set forth in point 2.2.20. of the rules on “Complementary services to financial activity and permitted activities”), whose corporate purpose and main activity is the provision of microcredit activities, as defined in subsection a) of this point, aimed at the natural persons referred to in said subsection under item i).

Their provision may also include the supply of technical assistance, monitoring and training services to borrowers for the development of their entrepreneurial capacity, provided they meet the following requirements:

− They have authorization to operate from the competent authority according to their type and, where applicable, are registered in the relevant public registry.

− They have financial or accounting statements –as applicable– in accordance with the applicable professional accounting standards.

ii) Regarding the content of the file, the provisions of point 1.1.3.1. must be observed.

1.1.4. Location.

The debtor's file must be kept at the place where the account is located.

It will be permitted for the customer's file to be located at a place other than where the account is located (for example: head office or branch that is the seat of regional management), when this has been determined for operational reasons –related to the evaluation, granting and monitoring of credits– and said circumstance is included in the “Manual of classification and provisioning procedures”.

In addition, a copy of the file of each customer whose indebtedness (included financings) is equal to or greater than 1% of the RPC must be kept at the entity's head office.

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These provisions are also applicable to the annexes to the customer's file.

1.1.5. Formal aspects.

The file and the annexes may be kept on magnetic, electronic or other similar technology media. In these last two cases, the provisions of point 1.1.4. shall not apply, while the requirements included in point 1. of the rules on “Instrumentation, conservation and reproduction of documents” must be observed.

1.2.1. Evidences.

The file must include the evidences demonstrating the degree of compliance with the customer's social security obligations in accordance with the legal provisions in force in the matter.

1.2.1.1. Law 14.499, article 12.

“...banking credit institutions..., shall require from employers, prior to granting credit..., evidence that they do not owe to the national social security funds in which they are registered any amount for contributions and/or assessments, or that having availed themselves of a moratorium they are up to date in compliance with it, unless the loan is requested to pay owed contributions and/or assessments.”

“The national social security funds shall grant the necessary certificate within 15 days of having been requested, except in the case that they have an impediment to do so, in which case they shall issue evidence of the fact, with which the banking institution..., shall proceed with the process. This evidence shall be valid for a term of 6 months.”

“The evidence referred to in the preceding paragraph,..., may be replaced by a sworn statement from the employers regarding the non-existence of such debts, intervened by the respective Fund as proof that it has received the corresponding copy for the purposes of subsequent verifications that may be appropriate. The documented proof of the falsity of such sworn statements shall be sufficient cause for the respective National Social Security Fund to request from the corresponding banking institution the cancellation of the granted credit, which is obliged to proceed accordingly. This sworn statement shall also be valid for 6 months.”

1.2.1.2. Law 18.214, article 1.

“The obligation established in art. 12 of Law 14.499 also applies to financial entities covered by the regime of Law 18.061” (currently Law of Financial Entities).

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1.2.2. Covered operations.

The preceding provisions apply to any credit operation, including those carried out between financial entities and with the public sector, and their non-compliance may give rise to the application of the sanctions provided in the rules on “Disciplinary regime in charge of the Central Bank of the Argentine Republic, Laws 21.526 and 25.065 and their amendments”.

1.2.3. Exclusion.

The concept “financial entities” does not include the Central Bank of the Argentine Republic (BCRA) since the rules contained in Laws 14.499 and 18.214 are intended for financial entities governed by the Law of Financial Entities, that is, those that regularly perform intermediation between the supply and demand of money. This situation is different from the operations carried out by the BCRA by virtue of the provisions set forth in its Charter.

1.2.4. Debtors of the social security system.

In order to become aware of who has the status of debtors, the users designated by the entities must enter with their Tax Key, through the website of the Federal Administration of Public Revenues (AFIP) www.afip.gob.ar to the option “Consultation for Financial Entities of Social Security Debtors”.

For this purpose, the entities must previously observe the procedure for delegating access to the service "Consulta para Entidades Financieras de Deudores Previsionales" to the users responsible for carrying out the query, following the guidelines of General Resolution No. 2.239 of the AFIP (Registration, authentication and authorization procedure for users called Clave Fiscal) and its amendments.

1.2.5. Lifting of the inhibition.

If situations arise in which a taxpayer is affected by a credit restriction due to their status as a social security debtor, they must go to the AFIP office where they are registered, so that through it such status may be resolved.

1.3. Sworn statement on linkage to the financial entity.

1.3.1. Requirement.

An updated sworn statement as to whether or not they are related parties to the respective financial intermediary, or whether their relationship with it implies the existence of controlling influence, shall be kept in the file of the clients covered, permanently available to the Superintendency of Financial and Exchange Entities (SEFyC).

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The sworn statement shall be formulated in the terms of the models set forth in item 1.3.8., as applicable. Said statement shall be made out in duplicate, which shall be delivered to the applicant with the acknowledgment of receipt by the entity.

Financial entities are obliged to supply the applicants for the assistance with the necessary information in a timely manner for the correct completion of the data contained in said statement.

1.3.2. Clients covered.

Clients of the non-financial private sector whose debt with the lending entity (for all purposes) plus the amount of the requested financing, at the time of granting it, exceeds 2.5% of the entity's RPC as of the last day of the month prior to the corresponding one, or the equivalent to the reference amount established in item 1.10., whichever is lower.

1.3.3. Scope.

For these purposes, financings covered within the scope established in the rules on "Credit Risk Fractionation" shall be considered.

In matters of relatedness, the definitions contained in the rules on "Credit Risk Fractionation" shall apply.

1.3.4. Conditioning of the assistance.

The granting of the assistance shall be subject to the applicant submitting the sworn statement.

1.3.5. Updating.

The sworn statement shall be updated within the five calendar days following the date on which the facts determining the modification of the declared situation occur.

Debtors in bankruptcy or with an out-of-court preventive agreement requested or in judicial proceedings are exempt from this update for a period of up to 540 days counted from the opening of the bankruptcy, the request for the preventive agreement or the initiation of the judicial collection proceedings, as applicable, provided that there is a report from a lawyer of the creditor financial entity on the reasonableness of the recovery of the credits covered.

This shall be without prejudice to the fact that they are debts that meet all the conditions provided for in item 2.2.3.2. of the rules on "Minimum Provisions for Default Risk".

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1.3.6. Assignment of rights or credit instruments without liability for the assignor.

The obligation to submit the sworn statement as to whether or not they are related parties to the entity shall fall both on the signatory or drawer of the documents and on the direct beneficiary of the assistance.

When the signatory or drawer of the documents is not a client of the financial entity, it shall not be mandatory to require the submission of the sworn statement referred to in the preceding paragraph. In its place, the financial entity shall verify in its records their condition as related or not to the entity –recording this in the file that shall be opened for such purpose– in accordance with the provisions of Section 2. of the rules on "Credit Risk Fractionation".

1.3.7. Exceptions.

Those obligated by facilities arising from occasional mismatches in repo operations, term, spot to settle, and repo and securities collateral operations in which the financial entity has already made the payment (or delivered the agreed counterparty) and the delivery of the agreed counterparty is pending (or the agreed actual payment has not been received) are exempt from submitting the sworn statement.

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1.3.8. Models of sworn statements.

1.3.8.1. Related client.

CENTRAL BANK OF THE ARGENTINE REPUBLIC
ARGENTINA
SWORN STATEMENT ON THE CONDITION
OF THE DEBTOR UNDER THE RELATEDNESS RULES
ESTABLISHED BY THE B.C.R.A.
RELATED CLIENT

ENTITY: The undersigned (1), (2), declares under oath that the data set forth herein are correct, complete and a true expression of the truth and that it is/ the signature it represents is (1) covered (1) by the relatedness guidelines provided for in items 2.2.1., 2.2.2. and 2.2.3. of the rules on "Credit Risk Fractionation". Furthermore, it undertakes to report any modification that may occur in this regard within the five calendar days of its occurrence, by submitting a new sworn statement.

Date:
Signature:
Document:
Type (3)
No. Country and Issuing Authority
(4):
Capacity invoked (5):
Name of the legal entity (6):
CUIT/CUIL (1) No.:

We certify that the signature above matches the one registered in our books/was placed in our presence (1).

(Entity seal and signatures of two authorized officials)

Remarks:

[1] Strike out what does not apply.

[2] Complete with the first and last name of the client, in the case of natural persons, even when an attorney-in-fact signs on their behalf.

[3] Indicate the type of identity document, in accordance with the rules on "Identity Documents in Force".

[4] Complete only in the case of foreigners who do not have residence in the country.

[5] Indicate holder, legal representative, attorney-in-fact. In the case of an attorney-in-fact, the power of attorney granted must be broad and general and in force on the date this declaration is signed.

[6] Complete only in cases where the signatory signs in the capacity of attorney-in-fact or legal representative of a legal entity.

This declaration must be completed in duplicate; the copy endorsed by the financial institution shall serve for the borrower as proof of receipt of this declaration. On the back, transcribe points 2.2.1., 2.2.2. and 2.2.3. of the rules on "Fraccionamiento del riesgo crediticio" and article 41 of the Ley de Entidades Financieras.

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1.3.8.2. Non-related client.

CENTRAL BANK OF THE ARGENTINE REPUBLIC	SWORN DECLARATION ON THE DEBTOR'S STATUS WITH RESPECT TO THE RELATEDNESS RULES ESTABLISHED BY THE CENTRAL BANK OF THE ARGENTINE REPUBLIC
	NON-RELATED CLIENT
INSTITUTION:
The(1) undersigned, (2), declares under oath that the data contained herein are correct, complete and a true expression of the truth, and that he/she is not/the signatory he/she represents is not (1) covered (1) by the relatedness guidelines set forth in points 2.2.1., 2.2.2. and 2.2.3. of the rules on "Fraccionamiento del riesgo crediticio".
Furthermore, he/she declares that he/she is aware that, in the event of falsity of the content of this submission, the applicable sanction shall be the one corresponding in accordance with the rules on "Régimen disciplinario a cargo del Banco Central de la República Argentina, Leyes 21.526 y 25.065 y sus modificatorias", without prejudice to the sanctions provided for in article 296 of the Código Penal.
In addition, he/she undertakes to report any modification that may occur in this regard within five consecutive days of its occurrence, by submitting a new sworn declaration.
Date:	Signature:
Document:	Type (3) No. Country and Issuing Authority (4):
Capacity invoked (5):
Name of the legal entity (6):
CUIT/CUIL (1) No.:
We certify that the signature above matches the one registered in our records/was placed in our presence (1).
(Seal of the institution and signatures of two authorized officials)
Remarks:
(1) Strike out what does not apply.
(2) Complete with the client's first and last name, in the case of natural persons, even when an attorney-in-fact signs on their behalf.
(3) Indicate the type of identity document, in accordance with the rules on "Documentos de identificación en vigencia".
(4) Complete only in the case of foreigners who do not reside in the country.
(5) Indicate holder, legal representative, attorney-in-fact. In the case of an attorney-in-fact, the power of attorney granted must be broad and general and in force on the date this declaration is signed.
(6) Complete only in cases where the signatory signs in the capacity of attorney-in-fact or legal representative of a legal entity.
This declaration must be completed in duplicate; the copy endorsed by the financial institution shall serve for the borrower as proof of receipt of this declaration. On the back, transcribe points 2.2.1., 2.2.2. and 2.2.3. of the rules on "Fraccionamiento del riesgo crediticio" and article 41 of the Ley de Entidades Financieras.

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1.3.9. Non-compliance.

Failure to submit the first declaration or the subsequent updates shall result in the following treatment:

i) The debtor will be considered as related to the entity and, therefore, all assistance granted will be subject to the limits applicable to clients of such character according to the rules on "Credit risk fragmentation".

ii) All the debt recorded by the borrower must be classified as "unrecoverable by technical disposition" in relation to the provisions on "Debtor classification".

The application of the established treatment must be made from the date of granting of the assistance, when it is the first declaration or, in the case of subsequent updates, as from 1.12. When it is sworn declarations submitted late, those provisions must be observed until the day or month prior to the date on which the client makes the pertinent submission, depending on whether it concerns the credit assistance limits or the classification of the debtor in the "unrecoverable by technical disposition" category, respectively.

1.3.10. Falsity of the declaration.

When the SEFyC determines falsity in the sworn declaration submitted, which gives rise to the entity not reporting the debtor as a related client, without prejudice to the application of the treatment established in point 1.3.9., the debtor and the entity –jointly and severally– will be subject to the fine in accordance with the provisions of the rules on "Disciplinary regime under the Central Bank of the Argentine Republic, Laws 21.526 and 25.065 and their amendments".

1.4. Significant financings.

1.4.1. Financings covered.

Financings, whatever their modality –except interfinancial operations– that exceed 2.5% of the RPC of the financial institution registered as of the last day of the second month prior to the one in which the granting of the credit support is decided.

The economic sets or groups of the non-financial private sector –defined in the rules on "Credit risk fragmentation"– must be considered as a single client.

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1.4.2. Procedure for granting.

The prior opinion of the following must be obtained:

− Branch manager, except when the application is processed by the head office.

− Regional or zone manager – as applicable and when the assistance has not been processed by the head office –.

− The highest-ranking officer of the credit or commercial area responsible for deciding on credit matters.

− General Manager or equivalent authority.

− Credit Committee, unless it does not exist in the entity's functional structure.

Such interventions must be fulfilled in all cases covered, except for the established exceptions, to the extent that such positions are contemplated in the entity's organic-functional structure, even when this is not required under the regime of resolutory powers for the allocation of credits in force at the lending financial institution, whereby the provision does not imply the modification of said structure or the creation of specific positions for its compliance.

For this purpose, the immediately higher functional unit must control the effective intervention of previous levels.

1.4.3. Approval.

Without prejudice to the procedure established in point 1.4.2., the granting of the credit assistance must have the approval of the Board of Directors or Board of Administration – by simple majority of its members, except in the case of credit support to related firms, in which case the conformity of at least two thirds of the directors or board members will be required –, or equivalent authority of the lending entity.

In the latter case, if the highest local authority must leave the country, the material task of approving the assistance may be delegated to an officer of the highest level, without this implying releasing the absent authority from responsibility for the credit allocations made in accordance with this procedure.

The required majorities of the Board of Directors or Board of Administration must be computed based on the totality of the members composing said bodies.

The decisions of the mentioned authorities must be recorded in the corresponding minute books.

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CENTRAL BANK OF THE ARGENTINE REPUBLIC

1.4.4. Credit agreements with partial disbursements.

In cases where, for operational reasons, credit lines are assigned whose validity does not exceed one year, through agreements that may or may not be communicated to clients, with partial disbursements referred to the respective framework agreement based on the needs of the debtors, their approval by the mentioned authorities complies with the requirement set in point 1.4.3., to the extent that the opinion of the officers provided for in point 1.4.2. is available, in both cases in advance.

Without prejudice to this, the agreement must be subject to periodic review – with the conformity of the mentioned authorities – whenever the borrower must be reclassified into a lower quality category in accordance with the pertinent rules.

The obligated officers must intervene prior to each disbursement in order to verify compliance with the conditions that enable this special treatment.

1.4.5. Overdrafts on current accounts.

In cases of overdrafts on current accounts or one-off fast-track operations, it is allowed that the approval of the Board of Directors, Board of Administration or highest-ranking local officer be made within 30 days following the granting of the credit.

1.4.6. Bases for observance of the provisions.

1.4.6.1. Individual basis.

Financial institutions (including their subsidiaries in the country and abroad) shall observe the provisions on significant financings on an individual basis.

1.4.6.2. Monthly consolidated basis.

Without prejudice to compliance on an individual basis, controlling financial institutions subject to consolidated supervision shall observe the rules on significant financings on a monthly consolidated basis.

1.4.7. Non-compliances.

The provisions of the rules on “Disciplinary regime in charge of the Central Bank of the Argentine Republic, Laws 21.526 and 25.065 and their amendments” shall be applicable.

1.5. Credit cards.

Financial institutions must refrain from issuing and renewing credit cards to holders who are delinquent debtors of an entity in liquidation, whether judicial or extrajudicial.

This circumstance must be communicated to the credit card holders.

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1.6. Effecting credits in deposit accounts.

Disbursements for financings exceeding $ 50,000 must be effected by crediting them to deposit accounts, in accordance with the provisions of Section 3. of the rules on “Prevention of money laundering, terrorist financing and other illicit activities”.

1.7. Operations for the account and order of the head office.

Excluded from the scope of the provisions of this section are clients that only receive financings and guarantees, sureties and other liabilities granted by local branches and subsidiaries of foreign financial institutions, for the account and order of their head office or its branches in other countries or of the controlling entity, provided that the following requirements are observed:

1.7.1. The rules of the country where the head office or controlling entity is located, the latter defined according to the provisions in force in that jurisdiction, must cover supervision on a consolidated basis of the local branches or subsidiaries.

1.7.2. The entity must comply with the provisions of point 3.1. of the rules on “Credit assessments”, requiring for this purpose an international risk rating included in the “investment grade” category.

1.7.3. In the case of financing, it must be provided by the local subsidiaries or branches only with funds from lines assigned to them by the aforementioned foreign intermediaries.

If the assistance is granted in a currency other than that of the foreign resources, the local entity may not assume the exchange risk between pesos or US dollars and currencies other than those or between the latter when they are not the same.

1.7.4. In the case of guarantees granted locally, there must be counter-guarantees extended by the parent company or its branches in other countries or by a foreign controlling entity, whose enforcement operates without restriction upon simple request of the local subsidiary or branch and immediately upon its eventual execution by the beneficiary.

Furthermore, the aforementioned transactions are not covered by the rules on “Minimum capital of financial institutions”, “Debtor classification” and “Credit risk diversification”.

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1.8. Prohibitions.

1.8.1. Financial institutions that make use of rediscounts or advances from the BCRA for temporary illiquidity situations may not grant credit assistance in which certificates of time deposit –in pesos, in foreign currency or of public securities– or negotiable obligations issued by them are received as collateral for the fulfillment of loans, even if the minimum term of 30 days has elapsed from the date of issuance, last negotiation or transfer, while such facilities remain in force.

1.8.2. Financial institutions issuing subordinated debt securities, admitted to determine computable equity responsibility, or convertible into shares of the institution may not receive such securities as collateral for financing or as counter-guarantee of guarantees granted in favor of third parties or of contingent liabilities assumed on behalf of third parties.

1.9. Minimum verifications on non-financial credit providers.

In the cases of financing requests from clients of the commercial portfolio or commercial assimilable to consumption that are subjects included in point 1.1. of the rules on “Credit assistance to non-financial credit providers”, it must be verified –prior to granting– that –if applicable– they are registered in the respective registries, whose list appears on the BCRA website (www.bcra.gob.ar).

1.10. Reference amount.

The amount to be considered shall be the maximum level of the value of total annual sales for the “Micro” category corresponding to the “Commerce” sector determined by the enforcement authority of Law 24.467 (and its amendments).

B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN
THE RULES ON “CREDIT MANAGEMENT”

CENTRAL BANK OF THE ARGENTINE REPUBLIC

CONSOLIDATED TEXT			SOURCE RULE					OBSERVATIONS
Sec.	Point	Para.	Comm.	Annex	Chap.	Sec.	Point	Para.
1.	1.1.1.		“A” 3051
	1.1.2.		“A” 2729			3.	3.4.1.		S/Com. “A” 2950, 4972 (point 2.), 5093 and 5520.
	1.1.3.1.	1st	“A” 49	I.		3.1.			S/Com. “A” 5387.
		2nd	“A” 5482
		3rd	“A” 5387						S/Com. “A” 5728.
		4th	“A” 2729			3.	3.4.2.	2nd	S/Com. “A” 2950 and 6327.
		5th	“A” 2729			3.	3.4.2.	8°	S/Com. “A” 2950 and 3051.
		6°	“A” 4972				2.
		7°	“A” 3051
	1.1.3.2.	i)	“A” 2729			3.	3.4.2.	3°	S/Com. “A” 2950 and 3051.
		ii)	“A” 2729			3.	3.4.2.	4° and 5°	S/Com. “A” 2950, 5093 and 6558.
		iii)	“A” 2729			3.	3.4.2.	7°	S/Com. “A” 2950.
		iv)	“A” 2729			3.	3.4.3.		S/Com. “A” 2950.
		v)	“A” 5482						S/Com. “A” 6091.
		vi)	“A” 6558			1.
	1.1.3.3.	a)	“A” 3142			1.			S/Com. “A” 3182, 4325 (point 3.), 4556, 4559, 4891, 4972, 5557, 5995 and 6221.
		b)	“A” 4325			3.			S/Com. “A” 4559, 4572, 4637, 4891, 4972, 5557, 5637, 5998, 6221 and 6558.
	1.1.3.4.	a)	“A” 4891			2.			S/Com. “A” 5226, 5533, 5884 and 6221.
		b)	“A” 4891			2.			S/Com. “A” 5700 and 6327.
	1.1.4.		“A” 2729			3.	3.4.4.		S/Com. “A” 2950.
	1.1.5.		"A" 2729			3.	3.4.5.		S/Com. "A" 2950 and 6068.
	1.2.1.		"A" 3051
	1.2.1.1.		"B" 5464
	1.2.1.2.		"B" 5464
	1.2.2.		"B" 5464					Last	S/Com. "A" 6167.
	1.2.3.		"B" 5664						S/Com. "A" 3051.
	1.2.4.		"C" 18820						S/Com. "B" 8833 and 9063.
	1.2.5.		"C" 18820						S/Com. "B" 9063.
	1.3.1.	1st	"A" 2573			1.		1st	S/Com. "A" 3051.
		2nd	"A" 2573			1.		5th
		3rd	"A" 2573			1.		6th
	1.3.2.		"A" 2573			1.		2nd	S/Com. "A" 3051, 4522, 5557 and 5998.
	1.3.3.	1st	"A" 2573			1.		3rd	S/Com. "A" 3051.
		2nd	"A" 2573			1.		4th
	1.3.4.		"A" 2573			1.		7th
	1.3.5.	1st	"A" 2573			1.		8°	S/Com. “A” 6329.
		2°	“A” 4972			2.			S/Com. “A” 6329.
		3°	“A” 4972			2.			S/Com. “A” 6329.

CREDIT MANAGEMENT

ORDERED TEXT			SOURCE STANDARD					OBSERVATIONS
Sec.	Point	Para.	Comm.	Annex	Chap.	Sec.	Point	Para.
1.	1.3.6.		“A” 3051						S/Com. “A” 6558.
	1.3.7.		“A” 3051
	1.3.8.1.		“A” 2573	I					S/Com. “A” 5520 and 6334.
	1.3.8.2.		“A” 2573	II					S/Com. “A” 5520, 6167 and 6334.
	1.3.9.	i)	“A” 2573				1.	9°
		ii)	“A” 2573				1.	10°
		Last	“A” 2573				1.	11°
	1.3.10.		“A” 2573				1.	12°	S/Com. “A” 6167.
	1.4.1.	1°	“A” 2373				3.	1°
		2°	“B” 5902				9.
	1.4.2.		“A” 2373				3.	1° and 2°
			“B” 5902				2.
	1.4.3.	1°	“A” 2373				3.	3°	S/Com. “A” 3051.
		2°	“A” 3051
		3°	“B” 5902				6.
		4°	“A” 3051
	1.4.4.	1°	“B” 5902				1.	1° and 2°
		2°	“B” 5902				1.	2°
		3°	“B” 5902				1.	3°
	1.4.5.		“B” 5902				1.	4°
	1.4.6.1.		“A” 2989			5.	5.1.
	1.4.6.2.		“A” 2989			5.	5.2.1.5.
	1.4.7.		“A” 2373				3.	4°, 5° and 6°	S/Com. “A” 6167.
	1.5.	1°	“A” 2102				1.
		2°	“A” 2102				2.
	1.6.		"A" 2814			3.	3.1.		S/Com. "A" 3051 and 5223.
	1.7.		"A" 2412						S/Com. "A" 5671 and 5740.
	1.8.1.		"A" 2308						S/Com. "A" 3918 and 4559.
	1.8.2.		"A" 2177				3.
	1.9.		"A" 5593				6.
	1.10.		"A" 5998				1.		S/ Com. "A" 6528.
2.	2.1.		"A" 49	I			3.2.1.	1°
	2.2.	1°	"A" 49	I			3.2.1.	2°
		2°	"A" 2729			7.	7.2.1.	2°	S/Com. "B" 9074.
	2.3.		"A" 476				4.
3.	3.1.		"A" 1465	I			2.
	3.2.1.		"A" 1465	I			2.		S/Com. "A" 2275 (point 2.3.).
	3.2.2.		"A" 2275				2.3.
	3.2.3.		"A" 2275				2.1.
	3.3.		"A" 1465	I			2.2.		S/Com. “A” 2275.
4.	4.1.		“A” 431						S/Com. “A” 4817, 4876, 4972 (item 2.) and 5520.
	4.2.		“A” 2322

B.C.R.A.
CONSOLIDATED TEXT OF THE RULES ON
“DEBTOR CLASSIFICATION”

-Index-

Section 1. Debtors included.

1.1. General criterion.

1.2. Special allocation criteria.

Section 2. Financings included.

2.1. Concepts included.

2.2. Exclusions.

Section 3. Classification task.

3.1. Portfolio analysis procedures.

3.2. Classification frequency.

3.3. Manual of classification and provisioning procedures.

3.4. Customer file.

3.5. Responsibility for the classification task.

3.6. Approval of the classification.

3.7. Reference amount.

Section 4. Classification criteria.

4.1. Classification levels.

4.2. Basic classification criterion.

4.3. Assessment of repayment capacity.

4.4. Financings covered with preferred “A” collateral.

4.5. Debtors that should not be subject to classification.

4.6. Financings –without liability for the assignor– covered by credit insurance for commercial risk and by credit risk insurance “with public buyer coverage”.

Section 5. Portfolio categories.

5.1. Categories.

Section 6. Classification of debtors in the commercial portfolio.

6.1. Basic information.

6.2. Classification criterion.

6.3. Minimum classification frequency.

6.4. Mandatory reconsideration of the classification.

6.5. Classification levels.

6.6. Mandatory recategorization.

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B.C.R.A.
DEBTOR CLASSIFICATION
Section 3. Classification task.

3.1. Portfolio analysis procedures.

The entity must develop portfolio analysis procedures that ensure: a) an adequate analysis of the debtor's economic and financial situation and b) a periodic review of its situation as regards the objective and subjective conditions of all risks assumed.

3.2. Classification frequency.

The classification of debtors must be carried out with a frequency that takes into account their importance –considering all the financings included–, and the analysis carried out must in all cases be documented.

3.3. Manual of classification and provisioning procedures.

The following shall be recorded in a “Manual of classification and provisioning procedures”:

3.3.1. The procedures implemented, in a manner that allows the process followed in this matter to be assessed.

3.3.2. The levels involved in the analysis and decision in the granting of facilities, the classification of debtors and the provisioning of receivables, according to the powers assigned to each of them and in accordance with the requirements established for the approval of the classification and provisioning.

3.3.3. The exercise of the option to group commercial financings of up to the equivalent of the reference amount established in point 3.7., whether or not they have preferred collateral, together with consumer or housing loans.

3.3.4. The circumstance that the customer file is located in a place other than where the account is located (for example: head office or branch that is the seat of regional management), when this has been determined for operational reasons –linked to the evaluation, granting and monitoring of loans–.

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CLASSIFICATION OF DEBTORS B.C.R.A.
Section 4. Classification criteria.

4.1. Classification levels.

Levels of grouping of clients have been provided for in decreasing order of quality, in direct proportion to the risk of uncollectibility arising from the situations they present.

4.2. Basic classification criterion.

The basic criterion to be used to carry out such classification is the future payment capacity of the debt or of the commitments subject to the financial institution's guarantee.

4.3. Evaluation of payment capacity.

4.3.1. When evaluating repayment capacity, emphasis should be placed on the analysis of cash flows performed by the institution.

4.3.2. Secondly, consideration should be given to the possibility of liquidating assets that are not essential for the company's operations.

4.4. Financing covered by preferred guarantees “A”.

Evaluation of repayment capacity shall not be required for financing that is backed by such guarantees.

4.5. Debtors that should not be subject to classification.

Debtors whose financing is fully covered by preferred guarantees “A” shall not be subject to classification, without prejudice to their reporting in accordance with the rules established in the respective regimes.

4.6. Financing –without recourse to the transferor– covered by credit insurance for commercial risk and by credit risk insurance “with public buyer coverage”.

The insurance company shall be classified based on delinquency according to the criteria applicable to the consumer portfolio, taking into account the due date of the first unpaid matured obligation, from the moment in which, the claim not having been rejected, the lack of payment of the claim is verified after the deadlines committed in the policy have expired (180 or 270 days, as applicable).

Those who are debtors in assignment transactions without recourse to the transferor shall not be subject to classification.

The preceding criteria shall only apply in the case of transactions of the title that, at origin, met the pertinent requirements established in the rules on “Guarantees”.

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Section 5. Portfolio categories.

5.1. Categories.

The portfolio shall be grouped into two basic categories:

5.1.1. Commercial portfolio.

It covers all included financing, except for the following:

5.1.1.1. Consumer or housing loans.

5.1.1.2. At the institution's option, commercial financing of up to the

equivalent of the reference amount established in point 3.7., whether or not they have preferred guarantees, may be grouped together with consumer or housing loans, in which case they shall receive the treatment provided for the latter.

When the client maintains financing for both concepts, consumer or housing loans shall be added to those of the commercial portfolio to determine their placement in one or the other portfolio based on the indicated amount, for which purpose loans with preferred guarantees shall be weighted at 50%.

If exercised, this option must be applied generally to the entire portfolio and be provided for in the “Manual of classification and provisioning procedures” and may only be changed with 6 months' prior notice to the Superintendency of Financial and Exchange Institutions.

5.1.2. Consumer or housing portfolio.

It comprises:

5.1.2.1. Consumer loans (personal and family, for professionals, for the acquisition of consumer goods, credit card financing).

5.1.2.2. Loans for own housing (purchase, construction or renovation).

5.1.2.3. Loans to Microcredit Institutions –up to the equivalent of 40% of the reference amount established in point 3.7.– and to microentrepreneurs (as provided in point 1.1.3.4. of the rules on “Credit management”).

5.1.2.4. Commercial financing of up to the equivalent of the reference amount established in point 3.7., whether or not they have preferred guarantees, when the institution has opted for it.

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B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON “CLASSIFICATION OF DEBTORS”

CENTRAL BANK OF THE ARGENTINE REPUBLIC

TEXT ORDERED			ORIGINATING RULE				OBSERVATIONS
Sect.	Point	Par.	Comm.	Annex	Point	Par.
1.	1.1.		“A” 2216	I		1°	Includes interpretive clarification.
	1.2.1.		“A” 2216	I	6.	2°
	1.2.2.		“A” 2216	I	I.d.	2° and 3°
	2.1.1. to 2.1.3. and 2.1.5.		“A” 2216	I		1°	According to Com. “A” 5067.
			“A” 2216	I	I.d.	1°
			“A” 2448				Statement of debtors' situation (point 6.1.).
			“A” 2587				Correspondence table between the Statement of debtors' situation and the Balance of balances (amended by Com. “A” 2514).
	2.1.4.		“A” 2736		3.
	2.1.6.		“A” 6396		2.		According to Com. “A” 6428. Includes interpretive clarification.
	2.2.1.		“A” 2448				Statement of debtors' situation (point 6.1., amended by Com. “A” 2421). According to Com. “A” 6396.
2.	2.2.1.1. to 2.2.1.4.		“A” 2448				Statement of debtors' situation (point 6.1., amended by Com. “A” 2421).
	2.2.1.5.		“A” 2448				Statement of debtors' situation (point 6.1., amended by Com. “A” 2421 and 3064).
	2.2.1.6. and 2.2.1.7.		“A” 2448				Statement of debtors' situation (point 6.1., amended by Com. “A” 2421).
	2.2.2.		“A” 2448				Statement of debtors' situation (point 6.2.).
	2.2.3.		“A” 2287		5.
	2.2.4.		“A” 2412				In the 2nd paragraph of point 2.2.4.3. it incorporates a criterion not previously made known on a general basis. According to Com. “A” 5671 and 5740.
	3.1.		“A” 2216	I	2.	1°
	3.2.		"A" 2216	I	4.
	3.3.	1°	"A" 2216	I	2.	2°
	3.3.1.		"A" 2216	I	2.	2°
	3.3.2.		"A" 2216	I	2.	2°	Includes interpretive clarification.
	3.3.3.		"A" 2216	I	6.	last	According to Com. "A" 2358 (point 1.), 4310 (point 1.), 4975, 5311, 5637, 5998 and 6558.
	3.3.4.		"A" 2216	I	7.	last
	3.3.5.		"B" 5644		2.
	3.3.6.						Incorporates criterion not previously made known on a general basis.
3.	3.3.7.		"A" 4325		2.		According to Com. "A" 4559 (point 6.).
	3.3.8.		"A" 4683		2.
	3.3.9.		"A" 4683		3.

CLASSIFICATION OF DEBTORS

ORDERED TEXT	SOURCE RULE	OBSERVATIONS
Sec.	Point	Para.	Com.	Annex	Point	Para.

3.	3.3.	last	"A" 2216	I	2.	2nd
	3.4.1.	1st	"A" 2216	I	7.	1st	According to Com. "A" 5093.
			"A" 2287		3.	last
		2nd	"A" 2216	I	6.	2nd
		3rd	"A" 2216	I	I.d.	3rd
		4th	"A" 4972		1.		According to Com. "A" 5520.
	3.4.2.		"A" 467			3rd	According to Com. "B" 5644, "A" 2287, 2573, 2932, 4545, 4738, 4781, 5093, 5311, 5470, 5557 and 5998.
			"A" 2216	I	7.
	3.4.3.		"A" 2563	I	II.		According to Com. "A" 2677 and 5998. Criterion is made explicit.
			"A" 2586	sole	II.
	3.4.4.	1st	"A" 2216	I	7.	1st
		2nd	"A" 2216		7.	last
		3rd	"A" 2216	I	7.	2°	According to Com. "A" 2223 (point 1.).
		last	"A" 2563	I	II.		According to Com. "A" 2677.
			"A" 2586	sole	II.		According to Com. "A" 2677.
	3.4.5.						It incorporates a criterion not previously made known on a general basis. According to Com. "A" 6068.
	3.5.		"A" 2216	I	3.	1°
	3.5.1.		"A" 2216	I	3.	1°
	3.5.2.	1°	"A" 2216	I	3.	1°
		2°	"A" 2216	I	3.	2°	According to Com. "A" 4972 (point 1.), 5311 and 5998.
		3°	"A" 2216	I	3.	3°	According to Com. "A" 2223 (point 1.).
		last	"A" 2216	I	3.	last
	3.5.3.						It incorporates a criterion not previously made known on a general basis.
	3.6.	1°	"A" 2373		8. and 3.		Includes an interpretive clarification.
		2°	"A" 2373		8.
		last	"B" 5902		3.		Includes interpretive clarification.
	3.7.		"A" 5998		1.		According to Com. "A" 6528.
4.	4.1.		"A" 2216	I	1.	1°
	4.2.		"A" 2216	I	1.	2°
	4.3.1.		"A" 2216	I	1.	3°	According to Com. "A" 2932 (point 3.).
	4.3.2.		"A" 2216	I	1.	last
	4.4.		"A" 2932		4.
	4.5.		“A” 2932		4.
	4.6.		“A” 3314		8.		According to Com. “A” 4529 and 6558.
5.	5.1.		“A” 2216	I	6.	1°
	5.1.1.	1°	“A” 2216	I	I.	1°	According to Com. “A” 2410.

CLASSIFICATION OF DEBTORS

CENTRAL BANK OF THE ARGENTINE REPUBLIC


CONSOLIDATED TEXT			ORIGINATING RULE				OBSERVATIONS
Sect.	Point	Para.	Com.	Annex	Point	Para.
5.	5.1.1.1.		"A" 2216	I	I.	1°	According to Com. "A" 2410, 4310 (point 1.), 4975, 5311, 5637, 5998 and 6558.
			"A" 2216	I	I.	2°
			"A" 2216	I	II.	4°
	5.1.1.2.	1°	"A" 2216	I	6.	last	According to Com. "A" 2358, 4310 (point 1.), 4975, 5311, 5637, 5998 and 6558.
		2°	"A" 2216	I	I.	1°	According to Com. "A" 2410.
		last	"A" 2216	I	6.	last	According to Com. "A" 2358.
	5.1.2.1.		"A" 2216	I	6.	1°
	5.1.2.2.		"A" 2216	I	6.	1°
	5.1.2.3.		"A" 4891		6.		According to Com. "A" 4975, 5637, 5998 and 6221.
	5.1.2.4.		"A" 2216	I	II.	3°	According to Com. "A" 2358, 4310 (point 1.), 4975, 5311, 5637, 5998 and 6558.
6.	6.1.		"A" 2216	I	I.	last	According to Com. "A" 6327.
	6.2.	1°	"A" 2216	I	I.a.	1°
		2°	"A" 3918				According to Com. "A" 3987.
		3°	"A" 4453				According to Com. "A" 4577 and 5398.
		4°	"A" 5398
		5°					It incorporates a criterion not previously made known on a general basis.
	6.3.		"A" 2216	I	I.a.	2°
	6.3.1.		"A" 2216	I	I.a.	2°, i)	According to Com. "A" 2223 (point 1.) and 3339.
	6.3.2.		"A" 2216	I	I.a.	2°, ii)	According to Com. "A" 2223 (point 1.), 3339, 4972 (point 10.), 5311 and 5998.
	6.3.3.		"A" 2216	I	I.a.	2°, iii)
	6.4.	1°	"A" 2216	I	I.b.	1°	According to Com. "A" 3339.
	6.4.1.		"A" 2216	I	I.b.	1°, i)	According to Com. "A" 3339.
	6.4.2.		"A" 2216	I	I.b.	1°, ii)	According to Com. “A” 3339.
	6.4.3.		“A” 2893		4.
	6.4.4.		“A” 3339	sole
	6.4.	last	“A” 2216	I	I.b.	last	According to Com. “A” 2223 (point 1.), 3339, 4972 (point 10.), 5311 and 5998.
	6.5.	1°	“A” 2216	I	I.d.	1°	According to Com. “A” 2440.
		2°	“A” 4060		10.
		3°	“A” 2216	I	I.d.	last	According to Com. “A” 3339 and 4972 (point 10.).
		last	“A” 2216	I	I.d.	last	Includes interpretive clarification.
	6.5.1.		“A” 2216	I	I.d.1.		According to Com. “A” 2932 (point 16.), 3339 and 5671.
	6.5.1.1.		“A” 2216	I	I.d.1.a)		According to Com. “A” 3955.
	6.5.1.2.		“A” 2216	I	I.d.1.b)		According to Com. “A” 3339.
	6.5.1.3.		“A” 2216	I	I.d.1.c)
	6.5.1.4.		“A” 2216	I	I.d.1.d)		According to Com. “A” 2932 (point 5.).
	6.5.1.5.		“A” 2216	I	I.d.1.e)
	6.5.1.6.		“A” 2216	I	I.d.1.f)		According to Com. “A” 3339.
	6.5.2.		“A” 2216	I	I.d.2.		According to Com. “A” 3339.
	6.5.2.1.		“A” 2216	I	I.d.2.	1°, 2° and 3°	According to Com. “A” 3339.
		i)	“A” 2216	I	I.d.2.a)		According to Com. “A” 3339 and 3955.
		ii)	“A” 2216		I.d.2.b)		According to Com. “A” 3339.
		iii)	“A” 2216	I	I.d.2.c)		According to Com. “A” 3339.

B.C.R.A.
CONSOLIDATED TEXT OF THE RULES ON
“CREDIT RISK SPLITTING”

-Index-

Section 1. Allocation of financings.

1.1. General criterion.

1.2. Financings covered by certain preferred “A” guarantees.

1.3. Financings guaranteed by mutual guarantee companies or public guarantee funds and other credit exposures with said counterparties.

1.4. Financings covered by credit insurance.

1.5. Financings with tax coparticipation guarantee.

1.6. Financings incorporated by transfer without recourse.

1.7. Financings incorporated with respect to related persons.

1.8. Financings guaranteed by persons other than the borrowers.

1.9. Receivables with respect to asset portfolios.

Section 2. Classes of clients.

2.1. General criterion.

2.2. Persons related to the financial institution.

2.3. Economic groups.

2.4. Non-financial public sector of the country.

2.5. Financial institutions.

2.6. Foreign banks.

Section 3. Included financings.

3.1. Included concepts.

3.2. Exclusions.

Section 4. Computation of financings.

4.1. General criterion.

4.2. Public securities that have normal and habitual trading in significant amounts in domestic markets.

4.3. Forward transactions, swaps, options and other derivatives.

4.4. Guarantees of financings.

4.5. Syndicated loans.

4.6. Financings to public trusts or fiduciary funds.

4.7. Granting of new financings.

Section 5. Credit margins.

5.1. Observance.

5.2. Basis of application.

5.3. Maximum limits.

Version: 4th COMMUNICATION “A” 6558
Effective date:
5/9/2018
Page 1

CREDIT RISK SPLITTING B.C.R.A.
Section 1. Allocation of financings.

1.1. General criterion.

Financings granted directly by financial institutions shall be allocated to the respective clients, residents in the country, from the public and private, financial and non-financial sectors, and residents abroad.

The client shall be considered to be the economic unit receiving the funds or with respect to which a guarantee is granted –contingent liability for the institution– which, in turn, must be the one that applies or obtains benefit from them, regardless of the legal form adopted to instrument the transaction.

Excluded are cases in which the financial assistance is granted for the account and order of the parent company or the controlling bank abroad.

Receivables from transactions carried out in markets with a central counterparty shall be allocated to the company exercising the function of clearing and settlement house (contractual counterparty in the transactions).

Financings to trusts that do not fall under the rules on “Financing to the non-financial public sector” shall be allocated to the recipients or beneficiaries in the proportion corresponding to each of them. The same criterion shall apply with respect to holdings of debt instruments corresponding to such trusts.

1.2. Financings covered by certain preferred guarantees “A”.

Financings covered by the following preferred guarantees “A” shall be allocated to the obligors by reason of them indicated in each case:

1.2.1. Avals and letters of credit issued by foreign banks or multilateral development banks (point 1.1.6. of the rules on “Guarantees”): to the guarantor or issuing bank.

1.2.2. Discount of credit instruments (points 1.1.10. and 1.1.14. of the rules on “Guarantees”): to the drawer, endorser, acceptor or guarantor taken into account to consider the transaction with preferred guarantee “A”, provided that the institution has –or can open– a credit file, or to the transferor, at the option of the institution.

1.2.3. Direct guarantees of central governments, their agencies or dependencies, of countries members of the Organisation for Economic Co-operation and Development (O.E.C.D.) (point 1.1.11. of the rules on “Guarantees”): to the guaranteeing government.

Financings covered by other preferred guarantees “A” shall be treated in accordance with the provisions of points 1.3. and 1.4. below, and in points 3.2.1.6. to 3.2.1.9. and 6.1.1.

Version: 3rd COMMUNICATION “A” 6558
Effective date:
5/9/2018
Page 1

CREDIT RISK SPLITTING B.C.R.A.
Section 1. Allocation of financings.

1.3. Financings guaranteed by mutual guarantee companies or public guarantee funds and other credit exposures with such counterparties.

Financings covered by guarantees of mutual guarantee companies or public guarantee funds, registered in the registries enabled in the Central Bank of the Argentine Republic, that constitute preferred guarantees “A” or “B” (points 1.1.15. and 1.2.4. of the rules on “Guarantees”), shall be allocated to the corresponding guarantee company or fund, as well as financings to the aforementioned entities and contributions to their risk funds.

1.4. Financings covered by credit insurance.

Financings, incorporated by assignment without liability for the transferor, that are covered by credit insurance for commercial risk that constitute preferred guarantees “A” or “B” (points 1.1.16. and 1.2.6. of the rules on “Guarantees”), shall be allocated to the corresponding insurance company.

1.5. Financings with guarantee of tax coparticipation.

1.5.1. With guarantee of federal tax coparticipation.

Financings to holders of the non-financial public sector with guarantee of federal tax coparticipation shall be allocated to the National State.

1.5.2. With guarantee of provincial tax coparticipation.

Financings to holders of the non-financial public sector with guarantee of provincial tax coparticipation shall be allocated to the respective provincial state.

1.6. Financings incorporated by transmission without liability.

The rights or credit instruments incorporated by purchase, assignment or other modalities without liability of the transferors shall be allocated to the drawers, debtors, co-debtors or acceptors of the respective instruments, which must be evaluated as credit subjects.

Excepted are “warrants” and assignments of rights mentioned in points 6.1.1.3. to 6.1.1.6., that constitute preferred guarantees “A” or “B”, in which case the credit margins of the transferors without liability shall be affected.

If the transferors are related persons and the obligors are not related, the allocation criterion established in the first two paragraphs of point 1.7.1. shall apply.

Incorporations shall be considered with liability if the transferors without liability assume it by other means, such as the separate granting of avals or sureties, payment of overdue installments, credit agreement to the transferor for amounts and/or on dates similar to the assigned portfolio.

Version: 4th COMMUNICATION “A” 6558
Effective date:
5/9/2018
Page 2

CREDIT RISK SPLITTING B.C.R.A.
Section 5. Credit margins.

5.3.1.2. To the non-financial private sector of the country and to the non-financial sector abroad.

Allocable financings	Maximum limit
i) To each borrower. a) Financings without computable guarantees. b) Total financings (whether or not they have computable guarantees) and/or guarantees included in point 1.8.2.	15 % 25 %
ii) To each mutual guarantee company (even if related) or public guarantee fund, in accordance with point 1.3.	25 %
iii) To each credit insurance company, in accordance with point 1.4.	15 %

In the event that the financings to the mutual guarantee company (even if related) or public guarantee fund, in accordance with point 1.3., do not exceed the basic margin provided in point 3.1.1. of the rules on “Credit Rating”, the maximum limit of subsection ii) will be extended up to 50 %.

5.3.1.3. To the country's financial sector.

Attributable financings	Maximum limit
i) If the lending entity has rating 1, 2 or 3 from the Superintendency of Financial and Exchange Entities (SEFyC) and is not a second-tier commercial bank. a) To each financial entity with rating 1, 2 or 3 from the SEFyC. - Basic margin. - Additional margins. * Tranche I * Tranche II b) To each financial entity with rating 4 or 5 from the SEFyC.	25 % 25 % 25 % 25 %
ii) If the lending entity has rating 4 or 5 from the SEFyC and is not a second-tier commercial bank. a) To each financial entity with rating 1 to 3 from the SEFyC. b) To each financial entity with rating 4 or 5 from the SEFyC.	25 % 0 %
iii) If the lending entity is a second-tier commercial bank and has rating 1, 2 or 3 from the SEFyC. - To each financial entity with rating 1 to 5 from the SEFyC.	100 %

Version: 3rd. COMMUNICATION “A” 6558
Effective:
5/9/2018
Page 2

CREDIT RISK SPLITTING B.C.R.A.
Section 6. Computable guarantees.

6.1. Included guarantees.

For the purposes of applying the maximum limits for financings with computable guarantees established in Section 5., the guarantees defined in the rules on “Guarantees” indicated below shall be considered:

6.1.1. The following preferred “A” guarantees:

6.1.1.1. In gold (point 1.1.2. of the rules on “Guarantees”).

6.1.1.2. Collateral of national public securities (point 1.1.5. of the rules on “Guarantees”).

6.1.1.3. “Warrants” (point 1.1.7. of the rules on “Guarantees”).

6.1.1.4. Assignment of collection rights of consumer invoices issued by public service companies (point 1.1.8. of the rules on “Guarantees”).

6.1.1.5. Assignment of collection rights regarding credit card coupons (point 1.1.9. of the rules on “Guarantees”).

6.1.1.6. Assignment of rights over the collection of fees and charges in public works concessions (point 1.1.12. of the rules on “Guarantees”).

6.1.1.7. Collateral of private securities (shares or bonds) issued by national or foreign companies (point 1.1.13. of the rules on “Guarantees”).

6.1.2. Preferred “B” guarantees, except the following:

6.1.2.1. Guarantees from mutual guarantee companies or public guarantee funds, registered in the registries enabled in the Central Bank of the Argentine Republic (point 1.2.4. of the rules on “Guarantees”).

6.1.2.2. Credit insurance (point 1.2.6. of the rules on “Guarantees”).

6.2. Exclusions.

From the computable guarantees in accordance with point 6.1., in cases of financings to related clients the following preferred “B” guarantees shall not be considered:

6.2.1. Mortgage (point 1.2.1. of the rules on “Guarantees”).

6.2.2. Pledge (points 1.2.2. and 1.2.3. of the rules on “Guarantees”).

6.2.3. Guarantee trusts (point 1.2.7. of the rules on “Guarantees”).

Version: 4th. COMMUNICATION “A” 6558
Effective:
5/9/2018
Page 1

B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON “CREDIT RISK SPLITTING”

CONSOLIDATED TEXT				SOURCE RULE					OBSERVATIONS
Sect.	Point	Para.	Comm.	Annex	Chap.	Sect.	Point	Para.
1.	1.1.	1°	“A” 3051			1.	1.1.1.	2°	According to Com. “A” 5472.
		2°	“A” 3051			1.	1.1.1.	1°
		3°	“A” 3051			1.	1.1.1.	3°	According to Com. “A” 5472.
		4°	“A” 4725				5.		According to Com. “A” 5472.
		last	“A” 5472
	1.2.1.		“A” 2932				12. to 14.		Includes interpretive clarification. According to Com. “A” 5472 and 6328.
			“A” 3129
	1.2.2.		"A" 2932				12 to 14.		According to Com. "A" 5472 and 6558.
			"A" 3129
	1.2.3.		"A" 2932				12 to 14.		Includes interpretive clarification. According to Com. "A" 5472.
			"A" 3129
	1.3.		"A" 2410				3. and 4.		According to Com. "A" 5472 and 6023.
			"A" 2932				12 to 14.
			"A" 3129
	1.4.		"A" 3314				10.		According to Com. "C" 32071, "A" 5472 and 6558.
	1.5.1.		"A" 3911				7.		According to Com. "A" 4230 (point 2.) and 5472.
	1.5.2.		"A" 3911				7.		According to Com. "A" 4230 (point 2.) and 5472.
	1.6.	1st	“A” 2140	II			4.2.		According to Com. “A” 5472.
		2°	“A” 2932				10.		According to Com. “A” 3918 (point 3.) and 5472.
		3°	“A” 2140	I			1.3.	3° and 4°	According to Com. “A” 2932 (point 8.) and 5472.
		last	“A” 5472
	1.7.	1.7.1.	“A” 2140	I			1.3.	3° and 4°	According to Com. “A” 2932 (point 8.), 3918 (point 3.) and 5472.
		1.7.2.	“A” 2140	I			1.3.	4°	According to Com. “A” 2932 (point 8.), 3918 (point 3.) and 5472.
	1.8.	1.8.1.	“A” 5472
		1.8.2.	“A” 2140	II			3.2.	2°	According to Com. “A” 5472.
	1.9.		“A” 2156				5.		According to Com. “A” 5472 and 5496.
2.	2.1.		“A” 5472
	2.2.1.1.	1°	“A” 2140	I			1.1.	1°
		i)	“A” 2140	I			1.1.1.		According to Com. “A” 5472.
		ii)	“A” 2140	I			1.1.1.		According to Com. “A” 5472.
		iii)	“A” 2140	I			1.1.2.		According to Com. “A” 5472.
		iv)	“A” 5472
		v)	“A” 2140	I			1.1.3.		According to Com. “A” 5472.
		vi)	“A” 5472
		vii)	“A” 2140	I			1.1.4.		Includes interpretive clarification. According to Com. “A” 5472.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

CREDIT RISK SPLITTING
CONSOLIDATED TEXT
ORIGINATING RULE


Sect.	Point	Para.	Com.	Annex	Chap.	Sect.	Point	Para.	OBSERVATIONS
4.	4.7.1.		“A” 414 LISOL-1		II	4.1.	last	According to Com. “A” 5472.
	4.7.2.		“A” 414 LISOL-1		II	4.1.	last	Includes interpretive clarification. According to Com. “A” 5472.
5.	5.1.		“A” 2140	II		3.	1st	According to Com. “A” 5472.
	5.2.1.		“A” 2140	II		3.	1st	According to Com. “A” 5472.
	5.2.2.		“A” 2227	sole		5.2.2.		According to Com. “A” 5472.
	5.3.1.1.	i)	“A” 3911			7.		According to Com. “A” 4230 (point 2.).
		ii)	“A” 4838			4.		According to Com. “A” 4926 (point 1.), 4932 (point 3.), 4937 (Annex, point 4.), 4996 (point 1.) and 5015 (Annex, point 4.).
	5.3.1.2.	i)	“A” 2140	II		3.1. and 3.2.		According to Com. “A” 5472.
		ii)	“A” 2410			3.		According to Com. “A” 5275 (point 10.) and 5472.
		iii)	“A” 3314			10.		According to Com. “C” 32071 and 6558.
		last	“A” 6467			1.
	5.3.1.3.	i)	“A” 2140	II		3.5.		According to Com. “A” 4972 (point 5.), 4975 (point 6.), 5193 and 5472.
		ii)	“A” 2140	II		3.5.		According to Com. “A” 4972 (point 5.), 4975 (point 6.), 5193 and 5472.
		iii)	“A” 2140	II		3.5.		According to Com. “A” 5193 and 5472.
		iv)	“A” 2140	II		3.5.		According to Com. “A” 5193 and 5472.
		v)	“A” 4972			5.		According to Com. “A” 4975 (point 6.), 5193, 5472 and “B” 9763. Includes interpretive clarification.
	5.3.1.4.	i)	“A” 2140	II		3.6.1.		According to Com. "A" 5472, 5671 and 5740.
		ii)	"A" 2140	II		3.6.2.		According to Com. "A" 5671 and 5740.
	5.3.2.1.	i), a)	"A" 3129					According to Com. "A" 4972 (point 3.) and 5472.
		i), b)	"A" 3129					According to Com. "A" 4817 (point 5.), 4972 (point 3.) and 5472.
		i), c)	"A" 3129					According to Com. "A" 4972 (point 3.) and 5472.
		i), d)	"A" 3129
		ii)	"A" 2800			1.		According to Com. "A" 2829 (point 1.).

CREDIT RISK FRACTIONING


CONSOLIDATED TEXT			SOURCE RULE						OBSERVATIONS
Sect.	Point	Para.	Com.	Annex	Chap.	Sect.	Point	Para.
5.	5.3.4.1.	i), 1°	"A" 2140	II			2.1.		According to Com. "A" 5472.
		i), 2°	"A" 2252				3.	last	According to Com. "A" 5472.
		ii), 1°	"A" 2140	II			2.2.	1°	According to Com. "A" 5472.
		ii), 2°	"A" 2252				3.	1°
		iii)	"A" 4838				5.		According to Com. “A” 4932 (point 3.), 4996 (point 1.), 5015 (Annex, point 5.) and 5472.
	5.3.4.2.	i)	“A” 3911				7.		According to Com. “A” 4230 (point 2.).
		ii)	“A” 6270
		iii)	“A” 3911				7.		According to Com. “A” 4230 (point 2.).
		iv)	“A” 4838				4.		According to Com. “A” 4926 (point 1.), 4932 (point 3.), 4937 (Annex, point 4.), 4996 (point 1.), 5015 (Annex, point 4.) and 5472.
	5.3.4.3.		“A” 3129						According to Com. “A” 5472.
	5.3.4.4.	i)	“A” 2140	II			3.3.		According to Com. “A” 2435 (point 2.), 2461 (point 6.), 5472 and 5496.
		ii)	“A” 2140	II			3.4.		According to Com. “A” 5472, 5496, 5671 and 5740. Includes interpretive clarification.
	5.3.4.5.		“A” 4742				1. e)
	5.3.5.		“A” 2140	I			5.		According to Com. “A” 5472.
	5.3.5.1.		“A” 2140	I			5.		According to Com. “A” 5472 and 5671.
	5.3.5.2.		“A” 3901	II			1.1.
	5.3.6.		“A” 5193						According to Com. “A” 5472.
6.	6.1.	1°	“A” 2140	I			4.	1°	According to Com. “A” 2932 (points 9. and 11.).
			“A” 2140	II			5.	1°
	6.1.1.1.		“A” 5472
	6.1.1.2.		“A” 5472
	6.1.1.3.		“A” 2140	I			4.1.		According to Com. “A” 2932 (points 9. and 11.).
			“A” 2140	II			5.1.
	6.1.1.4.		“A” 2140	I			4.1.		According to Com. “A” 2932 (points 9. and 11.).
			“A” 2140	II			5.1.
	6.1.1.5.		“A” 2140	I			4.1.		According to Com. “A” 2932 (points 9. and 11.).
			“A” 2140	II			5.1.
	6.1.1.6.		“A” 2140	I			4.1.		According to Com. “A” 2932 (points 9. and 11.).
			“A” 2140	II			5.1.
	6.1.1.7.		“A” 5472
	6.1.2.		“A” 2140	I			4.2.		According to Com. “A” 2932 (points 9. and 11.) and 5472.
			“A” 2140	II			5.2.
	6.1.2.1.		“A” 5472						According to Com. “A” 6453.
	6.1.2.2.		“A” 5472						According to Com. “A” 6453 and 6558.

GRADUATION OF THE B.C.R.A. CREDIT
Section 2. Financings included.

viii) Productive activities through the use of “warrants”.

ix) Commercial operations covered with credit insurance.

2.2.8.2. Coverage margin.

Preferred guarantees shall be computed using the coverage margin provided for by the rules on “Guarantees”.

2.2.9. Credits verified with debtors in insolvency proceedings that, following their refinancing by agreement of the creditors' meeting, exceed the maximum limits established, provided that the following conditions are observed:

2.2.9.1. The granting of the assistance must not have constituted, originally, excesses over said caps.

2.2.9.2. No new assistance may be granted.

2.2.9.3. The debtors must be duly classified.

2.2.10. Loans (net of repayments made) to natural or legal persons or non-related economic groups or conglomerates that, in the aggregate for each client, do not exceed the equivalent of the reference amount established in point 2.3.

If the assistance exceeds said amount, all financing granted to the client shall be subject to the maximum limits on credit grading.

This exemption is independent of the remaining exclusions and applies without prejudice to compliance with the rules in force on credit policy and administration, as well as those relating to the adoption of guarantee safeguards.

2.2.11. Credits that have guarantees extended by mutual guarantee companies or by public guarantee funds registered in the Registries authorized at the Central Bank of the Argentine Republic (BCRA).

2.2.12. Loans to other local financial institutions.

2.2.13. Financing granted to the non-financial public sector, considering for such purposes the definition in point 1.1. of the rules on “Financing to the non-financial public sector”, except those provided for in points 1.2.1. and 3.2.6. of that body of rules.

2.2.14. Commitments to provide funds assumed in loan syndication transactions, until they are reflected in debt balances at the so-called “managing bank” or in the event that, at that later stage, the latter assumes the obligation to guarantee to the remaining participating institutions the repayment of the funds they contribute for the required financing.

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CREDIT GRADING B.C.R.A.
Section 2. Financing included.

2.2.15. Financing to legal persons whose corporate purpose is the provision of microcredits (in accordance with the definition provided for in subsection b) of point 1.1.3.4. of the rules on “Credit management”), to the extent that the granting does not exceed:

a) Individual limit: 2.5 % of the computable equity responsibility (RPC) of the granting entity – as of the last day of the second month prior to the month in which the financing is granted – or the equivalent of 70 % of the reference amount established in point 2.3., whichever is greater.

b) Global limit: 10 % of the granting entity's RPC –as of the last day of the second month prior to that of the granting of the financing– or the equivalent of 170 % of the reference amount set out in point 2.3., whichever is greater.

2.3. Reference amount.

The amount to be taken into account shall be the maximum level of the annual total sales value for the “Micro” category corresponding to the “Commerce” sector as determined by the enforcement authority of Law 24.467 (and its amendments).

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B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON "GRADUATION OF CREDIT"

CONSOLIDATED TEXT			SOURCE RULE			REMARKS
Section	Point	Paragraph	Comm.	Annex	Point Paragraph
1.	1.1.	1°	"A" 467	sole	2.	Pursuant to Comm. "A" 5520.
			"A" 467	sole	6.1. last
		2°	"A" 3002			Incorporates an interpretive clarification.
2.	2.1.		"A" 467	sole	2.	Pursuant to Comm. "A" 5520.
	2.2.1.		"A" 467	sole	4.1.	Pursuant to Comm. "A" 5520.
	2.2.2.	1°	"A" 467	sole	3.1.
		last	"A" 490	sole	2.
	2.2.3.		"A" 467	sole	3.2.	Pursuant to Comm. "A" 6221.
	2.2.4.		"A" 467	sole	3.3.	According to Com. “A” 6221.
	2.2.5.		“A” 467	sole	4.2.
	2.2.6.	1°	“A” 467	sole	4.3.
		last	“A” 490	sole	4. and 5.
	2.2.7.		“A” 467	sole	4.4.
	2.2.8.		“A” 467	sole	4.5.	According to Com. “A” 2054, 5419 and 6558.
	2.2.8.1.	viii	“A” 467	sole	4.5.8.	According to Com. “A” 2074.
		ix	“A” 6558		5.
	2.2.9.		“A” 467	sole	4.6.	According to Com. “A” 2054.
	2.2.10.		“A” 467	sole	4.7.	According to Com. “A” 2098, “B” 5477, “A” 4310 (point 3.), 4975, 5311, 5637, 5998 and 6558.
	2.2.11.		“A” 467	sole	4.8.	According to Com. “A” 2410, 3307, 4093 (penultimate paragraph), 4465 and 5275.
			“A” 2410		7.
	2.2.12.		“B” 5902		10. last	According to Com. “A” 5013.
	2.2.13.		“B” 5902		10. last	According to Com. “A” 5013, 5154 and 5368.
	2.2.14.		“B” 5902		10. último	According to Com. “A” 5013.
	2.2.15.		“A” 4891		5.	According to Com. “A” 5998.
	2.3.		“A” 5998		1.	According to Com. “A” 6528.
3.	3.1.1.		“A” 467	único	1. 1°	According to Com. “A” 2373.
	3.1.2.1.		“A” 467	único	1. 2°	According to Com. “A” 2373, 5949 and 6467.
	3.1.2.2.	1°a 6°	“A” 467	único	1. 2°	According to Com. “A” 2373 and “B” 5902. Includes interpretive clarification.
		7°	“B” 5902		10. 1°
		último	“A” 3002			Incorporates interpretive clarification.
	3.2.1.		“A” 467	único	1. 3°	According to Com. “A” 2373, amended by Com. “A” 2960. Incorporates interpretive criterion.
	3.2.2.		“A” 2206		2.	According to Com. “A” 3183 and 6304.
	3.2.2.1.		“A” 2206		2.	According to Com. “A” 3086 and 3183.
	3.2.2.2.		“A” 2056		1.	According to Com. “A” 3086 and 4093 (penultimate paragraph).

CENTRAL BANK OF THE ARGENTINE REPUBLIC

GRADUATION OF CREDIT


ORDERED TEXT			SOURCE NORM				OBSERVATIONS
Section	Point	Paragraph	Com.	Annex	Point	Paragraph
3.	3.2.2.3.		“A” 2384		1.	1° and 2°	According to Com. “A” 3086 and 4093 (penultimate paragraph).
	3.3.		“A” 2156		5.
4.	4.1.		“A” 467	sole	5.		According to Com. “A” 5520.
5.	5.1.1. except		“A” 467	sole	6.1.	1°	According to Com. “A” 6327.
	5.1.1.1.i)	2°	“B” 1460			2°
	5.1.1.2.		“A” 490	sole	9.		According to Com. “A” 6327.
	5.1.2.		“A” 467	sole	6.1.	1°
	5.2.1.1.		“A” 467	sole	6.1.	last
			“A” 2373		2.
	5.2.1.2.		“A” 490	sole	8.
	5.2.2.		“A” 467	sole	6.1.	last
	5.2.3.		“A” 3002				Incorporates interpretive criterion.
	5.2.4.		“B” 5902		7.
	5.2.5.		“A” 4725		5.
6.	6.1.		“A” 3002		6.1.1.	2°
	6.2.	1°	“A” 3161		1. y 2.		According to Com. “A” 3171 and 4093 (penultimate paragraph).
		2°	“A” 2019		6.		According to Com. “A” 3161, 3171 and 5520.
	6.3.1.		“A” 3161		1.		According to Com. “A” 4093 (penultimate paragraph).
	6.3.2.		“A” 3161		1.		According to Com. “A” 3171 (item 2.) and 4093 (penultimate paragraph).
	6.3.3.		“A” 3161		1.		According to Com. “A” 4093 (penultimate paragraph).
	6.4.		“A” 3161		1.		According to Com. “A” 4093 (penultimate paragraph).
	6.4.1.		“A” 3161		1.		According to Com. “A” 4093 (penultimate paragraph).
	6.4.2.		“A” 3161		1.		According to Com. “A” 4093 (penultimate paragraph).
	6.4.3.		“A” 3161		1.		According to Com. “A” 3171 (item 3.) and 4093 (penultimate paragraph).
	6.5.		“A” 2019		5.	last
	6.5.1.		“A” 2019		5.	last	According to Com. “A” 5983.
	6.5.2.		“A” 3161		1.		According to Com. “A” 3171 (item 4.) and 4093 (penultimate paragraph).
	6.6.		“A” 3161		1.		According to Com. “A” 6327.
	6.7.		“A” 3183		1.		According to Com. “A” 4093 (par. 5.). Includes interpretive criterion.
7.	7.1.		“A” 2227	sole	5.1. and 5.2.1.	last	According to Com. “A” 2649.
	7.2.1.		“A” 2227	sole	5.1.4.		According to Com. “A” 2649.
			“A” 2227	sole	5.2.2.
	7.2.2.		“B” 5902		5.		According to Com. “A” 6023 and 6505. Includes interpretive clarification.
8.	8.1.		“A” 467	sole	1.	last	According to Com. “A” 2373.
	8.2.		“A” 467			3rd
	8.3.		“A” 490	sole	17.

− Classified in Category 1: 100 %

− Classified in Category 2 and not classified: 90 %

c) That they arise from sales operations or the provision of services corresponding to the assignor's activity. This condition may be verified by means of a sworn declaration made by the client or by any other means that the entity deems appropriate.

When the assignor client of the financial entity is a credit cooperative, a mutual providing the economic assistance service, or another legal entity not covered by Article 2° of the Financial Entities Law, whose activity is the discounting of third-party documents, the financial entity shall require said legal entity to state, under the terms of a sworn declaration, that it has verified that the discounted instruments arise from sales operations and/or the provision of services corresponding to the activity of each third-party assignor client of said legal entity, which shall be indicated in an annex to the aforementioned sworn declaration.

Without prejudice to the foregoing, treatment as a preferred guarantee “A” shall not apply when the third-party assignor is one of the legal entities indicated in the preceding paragraph.

In all cases in which “obligated party/parties to pay” is mentioned in this section, reference is made to any of the signatories of the documents who holds that condition in its capacity as drawer, endorser, acceptor or guarantor.

1.1.11. Direct guarantees issued by central governments, agencies or departments of central governments of member countries of the Organisation for Economic Co-operation and Development (OECD) that have an international risk rating of “A” or higher.

1.1.12. Guarantees constituted by the assignment of rights to the collection of fees and charges in public works concessions, provided that it does not exceed 50 % of projected income.

1.1.13. Guarantees or sureties of private securities (shares or bonds) issued by national or foreign companies, permanently taking into account their market value, which must reflect a normal and customary quotation in local or international markets, of wide dissemination and easy access to public knowledge.

Local issuing companies shall comply with the provisions of section 2.2.1. of the rules on “Credit Ratings”.

Foreign securities shall correspond to companies that comply with the provisions of section 3.2. of the rules on “Credit Ratings”, requiring for this purpose that their debt papers have an international risk rating of “A” or higher.

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1.1.14. Negotiable instruments (deferred payment checks, promissory notes, bills of exchange and credit invoices), discounted with recourse to the assignor, in which any of the parties legally obligated to pay, holding that condition in its capacity as drawer, endorser, acceptor or guarantor, meets at least one of the following conditions:

1.1.14.1. To register a level of indebtedness with the system equal to or higher than the equivalent of 170 % of the reference amount established in section 1.4., according to the latest information available in the “Debtors' Registry of the Financial System”, and to be reported by at least two financial entities in which the indebtedness –in each of them– is at least 85 % of said reference amount.

It shall be classified, in said registry, as “in normal standing” by all financial entities and, in the event of maintaining in force negotiable bonds or other debt securities, verify the provisions of section 1.1.14.2.

1.1.14.2. To maintain in force negotiable bonds or other debt securities in the local market for a sum not less than the equivalent of 90 % of the reference amount established in section 1.4. and to comply with the provisions of section 2.2.1. of the rules on “Credit Ratings”.

1.1.15. Guarantees granted by mutual guarantee companies or by public guarantee funds registered in the Registries enabled at the BCRA, regardless of the term of the operation, provided that they collect the unpaid credits within 30 calendar days of their maturity.

1.1.16. Internal (domestic) and export commercial credit insurance –operations without liability for the ceding party– covering commercial risk and, where applicable, extraordinary risks (borne by the National State, Law 20.299), including credit risk insurance "with public buyer scope".

The policy covering commercial risk shall contemplate the realization of credits within 180 consecutive days of their maturity and shall be issued by:

a) Local insurance companies for which the provisions of point 2.2.2 of the "Credit Evaluations" rules are met and which have reinsurance with insurance companies:

i) local companies with respect to which the provisions of the aforementioned point 2.2.2. of the rules on “Credit evaluations” are also verified; or

ii) foreign companies that comply with the provisions of point 3.2. of the rules on “Credit evaluations”, requiring for that purpose an international risk rating of “A” or higher.

The amount of the reinsurances must be adapted to the regulations issued by the Superintendence of Insurance of the Nation.

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B.C.R.A. GUARANTEES
Section 1. Classes.

1.2.5. Credits for financial leases (“leasing”) that had been agreed in accordance with the provisions of the Civil and Commercial Code of the Nation on real estate and on motor vehicles and agricultural, road and industrial machinery (to the extent that they are registered in the pertinent national registry of motor vehicle property and have a market that allows obtaining a reference value).

1.2.6. Credit insurance, to the extent that the periods for payment of claims for commercial risk exceed 180 days without exceeding 270 consecutive days counted from the maturity of the credits and the other requirements provided in point 1.1.16 are observed.

1.2.7. Trusts for guarantee constituted in accordance with the provisions of the Civil and Commercial Code of the Nation (article 1666 et seq.) for the purpose of backing the payment of financings granted for the construction of real estate provided that, at a minimum, the following requirements are verified:

1.2.7.1. The owner of the domain assigns to the trust for guarantee the real estate on which the construction of the development will be carried out and the rights and other assets resulting from the execution and completion of the works and their commercialization in fiduciary ownership, to the extent agreed in the trust contract.

1.2.7.2. The proceeds of such commercialization are destined to the partial or total cancellation of the obligations contracted by the borrower by reason of the financing agreed in the terms established in the trust contract.

1.2.7.3. The trustee has broad powers to carry out effective control of the tasks provided in point 1.2.7.1., as well as to remove from their functions the natural or legal persons that have been designated to carry them out and designate their replacements, in case of non-compliance or poor performance of their functions.

1.2.7.4. The assigned assets are free of liens.

1.2.7.5. In cases where there are other beneficiaries besides the lending financial institution, the respective contracts contemplate a clause establishing that in the event of non-compliance, by the borrower, of the payment –partial or total– of the financings granted, the lending/beneficiary financial institution will have preference in collection over the other beneficiaries of the trust's product.

1.2.7.6. The fiduciary transfer deed of the trust assets and the trust contracts contain a clause by which the settlor grants in advance the required conformity such that in the case of verifying the objective conditions of non-compliance contained in the trust contract, the trustee is enabled to dispose of the asset and transfer its full ownership, with the consequent registry effect.

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GUARANTEES
B.C.R.A.
Section 3. Computation.

3.1.19. Credits for financial leases (point 1.2.5.):

3.1.19.1. Real estate for the lessee's own housing –only, family and permanent occupancy–, in the case of new financings of up to the equivalent of 11 % of the reference amount established in point 1.4. and not a renegotiation of the contract: 100 % of the value of the asset.

3.1.19.2. Real estate for the lessee's own housing –only, family and permanent occupancy–, in the case of new financings greater than the equivalent of 11 % of the reference amount established in point 1.4. and up to the equivalent of 17 % of that established in point 1.4. and not a renegotiation of the contract: 90 % of the value of the asset.

3.1.19.3. Real estate for the lessee's housing not included in the preceding point: 75 % of the appraisal value of the asset.

3.1.19.4. Other real estate: 50 % of the appraisal value of the asset.

3.1.19.5. Motor vehicles and agricultural machinery: 75 % of the appraisal value of the asset.

3.1.19.6. Road and industrial machinery: 60 % of the appraisal value of the asset.

3.1.20. Credit insurance (points 1.1.16. and 1.2.6.): 100 %.

3.1.21. Trusts for guarantee on real estate assigned to the trust (point 1.2.7.):

3.1.21.1. On real estate for housing: 75 % of the appraisal value of the real estate (land plus work progress).

3.1.21.2. On real estate for uses other than housing assigned to the trust: 50 % of the appraisal value of the real estate (land plus work progress).

3.1.22. Purchase-sale agreement for land, lots or parcels or other already constructed real estate (point 1.2.8.):

3.1.22.1. On real estate destined for housing: 75 % of the value of the real estate.

3.1.22.2. On real estate whose use is other than housing: 50 % of the value of the real estate.

3.1.23. Trusts or other rights over real estate developments (point 1.2.9.):

3.1.23.1. On real estate destined for housing: 75 % of the value of that right.

3.1.23.2. On real estate whose use is other than housing: 50 % of the value of that right.

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B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON “GUARANTEES”

CONSOLIDATED TEXT
RULE OF ORIGIN

Point	Paragraph	Com.	Annex	Point	Paragraph	OBSERVATIONS
1.1.		“A” 2932	sole	1.1.		According to Com. “A” 4242 and 6374.
1.1.1.		“A” 2216	I	1.	3°, a)	According to Com. “A” 2443, 2932, 3918, 4242 and 6374.
1.1.2.		“A” 2216	I	1.	3°, a)	According to Com. “A” 2443, 2932 and 3918.
1.1.3.		“A” 2216	I	1.	3°, b)	According to Com. “A” 2932, 3918, 4242 and 6374.
1.1.4.		“A” 2216	I	1.	3°, c)	According to Com. “A” 2932 and 4242.
1.1.5.		“A” 2216	I	1.	3°, d)	According to Com. “A” 2932, 4741, 6091 and 6327.
1.1.6.		“A” 2216	I	1.	3°, e)	According to Com. “A” 2932, 3918, 4242, 5671, 5740, 6328 and 6374.
1.1.7.		“A” 2216	I	1.	3°, g)	According to Com. “A” 2932.
1.1.8.		“A” 2216	I	1.	3°, h)	According to Com. “A” 2932.
1.1.9.		“A” 2216	I	1.	3°, i)	According to Com. “A” 2932.
1.1.10.		“A” 2932	único	1.1.11.		According to Com. “A” 3104, 4242, 4522, 4957, 5998, 6531 and 6558.
1.1.11.		“A” 2932	único	1.1.12.		According to Com. “A” 4141, 5671, 5740 and 6374.
1.1.12.		“A” 2932	sole	1.1.13.		According to Com. “A” 4242 and 6374.
1.1.13.		“A” 2932	sole	1.1.14.		According to Com. “A” 3918, 5671 and 5740. Includes interpretive clarification.
1.1.14.		“A” 3114		1.
1.1.14.1.	1°	“A” 3114				According to Com. “A” 3918, 4055, 5671, 5740, 5998 and 6531. Includes interpretive clarification.
1.1.14.2.		“A” 3114		1.		According to Com. “A” 3918, 4055, 5671, 5740, 5998 and 6531.
1.1.15.		“A” 3141				According to Com. “A” 3307, 3918, 4465 and 5275.
1.1.16.		“A” 3314				According to Com. “A” 4529, 5671 and 5740 and 6558.
1.2.		“A” 2932	sole	1.2.		According to Com. “A” 3104 and 6374.
1.2.1.		“A” 2419		1.	1°	According to Com. “A” 2563 (points 1. and 2.), 2932, 3314, 6250 and 6297.
1.2.2.		“A” 2448				Statement of debtors' situation (point 6.1.2.2.2.). According to Com. “A” 2932, 3918 and 6162.
1.2.3.		“A” 6162		4.
1.2.4.		“A” 2448				Statement of debtors' situation (point 6.1.2.2.2.). According to Com. “A” 2932, 3918 and 5275.
		“A” 2410		7.		According to Com. “A” 3141.
1.2.5.		“A” 3259		1.		According to Com. “A” 3314, 5067 and 6250.

GUARANTEES

CONSOLIDATED TEXT
SOURCE STANDARD


Section	Point	Paragraph	Com.	Annex	Point	Paragraph	OBSERVATIONS
1.	1.2.6.		"A" 3314				According to Com. "A" 4529 and 6558.
	1.2.7.		"A" 4491		1.		According to Com. "A" 4501, 5998 and 6250.
	1.2.8.		"A" 6250				According to Com. "A" 6297.
	1.2.9.		"A" 6250				According to Com. "A" 6297.
	1.2.10.		"A" 6449		2.
	1.3.		"A" 7				Specifications of the "other guarantees received" line items, amended by Com. "A" 2932.
	1.4.		"A" 5998		1.		According to Com. "A" 6528.
2.	2.1.	1°	"A" 2448				Statement of debtors' position (point 6.1.2.2.2.).
		2°	"A" 2932	sole	2.1.	2°
	2.2.		"A" 2216	I	1.	4°	According to Com. "A" 6374.
3.	3.1.		"A" 2932	sole	3.1.		According to Com. "A" 6374.
	3.1.1.		"A" 2932	sole	3.1.1.		According to Com. "A" 3918.
	3.1.2.		"A" 2932	sole	3.1.2.
	3.1.3.		"A" 2932	sole	3.1.3.		According to Com. "A" 3918.
	3.1.4.		"A" 2932	sole	3.1.4.
	3.1.5.		"A" 2932	sole	3.1.5.		According to Com. "A" 3918, 4242 and 4741.
	3.1.6.		"A" 2932	sole	3.1.6.		According to Com. "A" 3918 and 6328.
	3.1.7.		"A" 2216	I	1.	3°, g)	According to Com. "A" 2932.
	3.1.8.		"A" 2216	I	1.	3°, h)	According to Com. "A" 2932.
	3.1.9.		"A" 2216	I	1.	3°, i)	According to Com. "A" 2932.
	3.1.10.		"A" 2932	sole	3.1.11.		According to Com. "A" 3104 and 4522.
	3.1.11.		"A" 2932	sole	3.1.12.		According to Com. "A" 3918.
	3.1.12.		"A" 2932	sole	3.1.13.
	3.1.13.		"A" 2932	sole	3.1.14.
	3.1.14.		"A" 2419	1.	1°, ii)		According to Com. "A" 2932, 3314, 3918, 4551 (point 2.), 4559 (point 3.), 5998 and 6297.
	3.1.15.		"A" 2932	sole	3.1.18.		According to Com. “A” 3918 and 6162.
	3.1.16.		“A” 6162		4.
	3.1.17.		“A” 2932	sole	3.1.19.		According to Com. “A” 3141, 3918, 4242, 4465 and 5275.
	3.1.18.		“A” 3114		2.		According to Com. “A” 4242.
	3.1.19.		“A” 3259		2.		According to Com. “A” 5067.
	3.1.19.1.		“A” 4559		5.		According to Com. “A” 5998.
	3.1.19.2.		“A” 4559		5.		According to Com. “A” 5998.
	3.1.19.3.		“A” 3259		2.		According to Com. “A” 3314, 3918 and 4559 (point 5.).
	3.1.19.4.		“A” 3259		2.		According to Com. “A” 3918 (point 4.).
	3.1.19.5.		“A” 3259		2.		According to Com. “A” 3314 (point 3.).
	3.1.19.6.		“A” 3314		6.
	3.1.20.		“A” 3314				According to Com. “A” 6558.
	3.1.21.		“A” 4491		1.		According to Com. “A” 4501 and 6453.

MINIMUM PROVISIONS FOR BAD DEBT RISK
B.C.R.A.
Section 2. Minimum guidelines.

Financings that exceed the respective coverage margins will be subject to the constitution of provisions at the percentages established for transactions that do not have the aforementioned guarantees.

2.1.2.4. Financings fully covered with preferred “A” guarantees will be subject to the constitution of the provision established on a general basis for the normal portfolio.

2.1.2.5. Financings –without liability for the assignor– covered by credit insurance for commercial risk and by credit risk insurance “with public buyer scope” will be subject to the constitution of the following provisions:

a) In the event that, once the loss has occurred, the financial institution has not made the claim under the terms set in the policy: the percentages established based on delinquency according to the criteria applicable to the consumer portfolio will be taken into account, from the date of the first unpaid matured obligation, for the outstanding balance.

The same criterion will apply in the case of transactions considered as preferred “B” guarantee.

b) In the event that, once the loss has occurred, the financial institution has made the claim within the terms set in the policy:

− If the insurance company does not reject the claim under the established terms and does not settle the loss: the percentages established –without preferred guarantees– based on delinquency according to the criteria applicable to the consumer portfolio will be taken into account from the date of the first unpaid matured obligation, for the outstanding balance.

In addition, the insurance company must be reported in the “Central de deudores del sistema financiero” in the category that corresponds according to the criteria applicable to the consumer portfolio.

− If the insurance company rejects the claim, whether for formal or litigious reasons, the percentages established based on the default according to the criteria applicable to the consumer portfolio from the date of the first unpaid due obligation, on the outstanding balance, shall be applied.

Version: 7th COMMUNICATION “A” 6558
Effective:
5/9/2018
Page 2

B.C.R.A.

ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON “MINIMUM PROVISIONS FOR BAD DEBT RISK”

ORDERED TEXT			SOURCE RULE			OBSERVATIONS
Section	Point	Para.	Comm.	Annex	Point	Para.
1.	1.1.		"A" 2216		2.	1st
	1.2.1.		"A" 2216		2.	1st
	1.2.2.		"A" 2216	II		2nd	Includes interpretive clarification.
	1.2.3.		"A" 2216	II		2nd
	1.2.4.		"A" 2216	II		3rd	According to Comm. "A" 3040 (point 3.) and "B" 9074.
	1.2.5.		"A" 3040
	1.2.6.		"A" 3064
2.	2.1.1.	1st and table	"A" 2216	II		1st	According to Comm. "A" 2440, 3339 and "B" 9074.
	2.1.2.1.		"B" 6331	6.			According to Comm. "A" 6303.
	2.1.2.2.		"A" 2826		2nd
	2.1.2.3.		"A" 2932		7°		Includes interpretive clarification.
	2.1.2.4.
	2.1.2.5.		"A" 3314				According to Com. "A" 6558.
	2.2.1.		"A" 2216	II		6°	According to Com. "A" 2932 (point 15.).
	2.2.2.		"A" 2216	II		9° and last	According to Com. "A" 3040 (point 5.), includes interpretive clarification. According to Com. "A" 3339, 3955 and "B" 9074.
	2.2.3.1.		"A" 2216	II		8°	According to Com. "A" 2442, 3091 and "B" 9074.
	2.2.3.2.		"A" 3091
	2.2.3.3.		"A" 3091
	2.2.3.4.		"A" 2216	II		8°	According to Com. "A" 2442 and 3091.
	2.2.4.		"A" 2440		2.	1°	According to Com. "A" 2890 (point 2.), 3157 (point 1.) and 3339.
	2.2.5.		"A" 3157		2.		According to Com. "A" 3918 and 4055.
	2.2.6.		"A" 4060		6.
	2.2.7.		"A" 4467
	2.2.8.		"A" 5398
	2.2.9.		"A" 6032		2.		According to Com. "A" 6489.
	2.3.		"A" 2216	II		7°	According to Com. "A" 4683 (point 5.).
	2.4.		"A" 2216	II		4°	According to Com. "A" 4738.
	2.5.	1st last	"A" 2357		1.		According to Com. "A" 6327. It incorporates a criterion not previously made known on a general basis.
	2.6.		"A" 2287		4.		According to Com. "A" 2893 (point 2.).
	2.6.1.		"A" 2287		4.		According to Com. "A" 2893 (point 2.).
	2.6.2.		"A" 2287		4.		According to Com. "A" 2893 (point 2.).
			"A" 2607		1.
	2.7.		"A" 2893		3.
	2.8.		"A" 2893		3.		According to Com. "A" 6167.
3.	3.1.	1°	"A" 2373		8. and 3.		Includes interpretive clarification.
		2°	"A" 2373		8.
		last	"B" 5902		3.		Includes interpretive clarification.

Credit management. Classification of debtors. Splitting of credit risk. Credit rating. Guarantees. Minimum provisions for bad debt risk. Adjustments .

ANNEX

1.1.3.2. Specific aspects.

1.1.3.3. Special transactions.

1.1.3.4. Loans for microentrepreneurs and financing to Microcredit Institutions.

a) Loans for microentrepreneurs.

1.1.4. Location.

1.1.5. Formal aspects.

1.2. Compliance with social security obligations.

1.2.1. Evidences.

1.2.1.1. Law 14.499, article 12.

1.2.1.2. Law 18.214, article 1.

1.2.2. Covered operations.

1.2.3. Exclusion.

1.2.4. Debtors of the social security system.

1.2.5. Lifting of the inhibition.

1.3. Sworn statement on linkage to the financial entity.

1.3.1. Requirement.

1.3.2. Clients covered.

1.3.3. Scope.

1.3.4. Conditioning of the assistance.

1.3.5. Updating.

1.3.6. Assignment of rights or credit instruments without liability for the assignor.

1.3.7. Exceptions.

1.3.8. Models of sworn statements.

1.3.8.1. Related client.

1.3.8.2. Non-related client.

1.3.9. Non-compliance.

1.3.10. Falsity of the declaration.

1.4. Significant financings.

1.4.1. Financings covered.

1.4.2. Procedure for granting.

1.4.3. Approval.

1.4.4. Credit agreements with partial disbursements.

1.4.5. Overdrafts on current accounts.

1.4.6. Bases for observance of the provisions.

1.4.6.1. Individual basis.

1.4.6.2. Monthly consolidated basis.

1.4.7. Non-compliances.

1.5. Credit cards.

1.6. Effecting credits in deposit accounts.

1.7. Operations for the account and order of the head office.

1.8. Prohibitions.

1.9. Minimum verifications on non-financial credit providers.

1.10. Reference amount.

3.1. Portfolio analysis procedures.

3.2. Classification frequency.

3.3. Manual of classification and provisioning procedures.

4.1. Classification levels.

4.2. Basic classification criterion.

4.3. Evaluation of payment capacity.

4.4. Financing covered by preferred guarantees “A”.

4.5. Debtors that should not be subject to classification.

4.6. Financing –without recourse to the transferor– covered by credit insurance for commercial risk and by credit risk insurance “with public buyer coverage”.

Section 5. Portfolio categories.

5.1. Categories.

5.1.1. Commercial portfolio.

5.1.1.1. Consumer or housing loans.

5.1.1.2. At the institution's option, commercial financing of up to the

5.1.2. Consumer or housing portfolio.

1.1. General criterion.

1.2. Financings covered by certain preferred guarantees “A”.

5.3.1.2. To the non-financial private sector of the country and to the non-financial sector abroad.

5.3.1.3. To the country's financial sector.

6.1. Included guarantees.

6.2. Exclusions.

2.2.8.2. Coverage margin.

2.3. Reference amount.

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