Credit Policy: Financing in Pesos to Large Exporting Companies - Adjustments

2016 - Year of the Bicentennial of the Declaration of National Independence

COMMUNICATION “A” 5892 21/01/2016

TO FINANCIAL INSTITUTIONS:

Ref.: Circular
OPRAC 1 - 803

Credit policy. Financing in pesos to “Large exporting companies”. Adjustments.

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We address you to inform you that this Institution adopted the following resolution:

“- Repeal Section 6. Financing in pesos to “Large exporting companies”, of the rules on “Credit policy”.”

Finally, we send you the pages that, in replacement of 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, by accessing “Legal and Regulatory Framework - Ordered Texts - Regulatory Compilations”, 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

Matías A. Gutiérrez Girault
Issuance Manager of Rules
Agustín Torcassi
Deputy General Manager of Rules

ANNEX

B.C.R.A.
CREDIT POLICY

-Index-

Section 1. General credit policy.

1.1. General criterion.

1.2. Covered financing.

1.3. Credit management.

Section 2. Application of the lending capacity of deposits in foreign currency.

2.1. Destinations.

2.2. Conditions.

2.3. Effectiveness.

2.4. Allocation of incorporated financing.

2.5. Financing recorded in memorandum accounts.

2.6. Lending capacity.

2.7. Application defects.

Section 3. Application of liquid own resources.

3.1. Liquid own resources.

3.2. Application.

Section 4. Financing to the country's non-financial public sector.

4.1. Applicable rules.

Section 5. Financing to residents abroad.

5.1. General criterion.

5.2. Placements in banks abroad.

5.3. Holding of foreign securities.

Section 6. Credits with clause of application of the Reference Stabilization Coefficient.

Section 7. Bases of observance.

7.1. Individual base.

7.2. Consolidated base.

Section 8. Transitional provisions.

Correlation table.

Version: 8th. COMMUNICATION “A” 5892
Validity:
22/01/2016
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CREDIT POLICY
B.C.R.A. Section 6. Credits with clause of application of the Reference Stabilization Coefficient of Reference.

Financing operations with clause of application of the Reference Stabilization Coefficient (“CER”) will be subject to the following conditions:

6.1. Interfinancial loans.

Currency: pesos.

Interest rate: the one freely agreed upon between the parties, which shall be calculated on the adjusted principal.

6.2. Commercial loans greater than or equal to $ 250,000.

Currency: pesos.

Minimum term: one year.

Interest rate: the one freely agreed upon between the parties, which shall be calculated on the adjusted principal.

6.3. Loans to natural persons -mortgage, pledge and personal- and commercial loans less than $ 250,000.

Currency: pesos.

Minimum term: one year.

Interest rate: the one freely agreed upon between the parties, which shall be calculated on the adjusted principal.

Amortization systems: French (constant installments) or German (decreasing installments).

The financial institution must offer the client the option to extend the maturity term, endeavoring that the value of each installment, in the case of monthly payments, does not exceed by 1% the amount of the immediately preceding installment. For this purpose, the financial institution must extend the number of installments originally planned by up to 25% of the amount initially agreed in the case of financings of up to 5 years of original term or up to 50% for financings with longer terms.

In the case of financings with a payment frequency greater than monthly, the percentage increase of the installment shall be accumulated based on the number of months included in the payment period (for example: quarterly services 3%).

In the corresponding file, there must be a record of the client's acceptance or non-acceptance of this option as well as that they have become aware of the applicable interest rates in each case, at the time of granting the credit. If the option is accepted, the corresponding clause must be included in the contract.

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Effective date:
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CREDIT POLICY
B.C.R.A. Section 6. Credits with clause of application of the Stabilization Coefficient of Reference.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

At the time of granting financings to natural persons, special attention must be paid to the installment/income ratio so that the debtor can face possible increases in the amount of the installments without affecting their payment capacity, taking into account that their income may not follow the evolution of the Stabilization Reference Coefficient (“CER”).

The debt balances shall be updated according to the variations experienced by the Stabilization Reference Coefficient (“CER”) after comparing the indices of the banking business day prior to the date of the financing and that of equal anticipation to the due date of each installment.

Version: 2nd. COMMUNICATION “A” 5892
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CREDIT POLICY B.C.R.A.
Section 7. Bases of observance.

7.1. Individual basis.

Financial institutions (exclusively including their domestic head offices) shall observe the rules on “Credit policy” on an individual basis.

These provisions shall also apply to foreign branches, to the extent that they operate with resources from the entity's domestic head offices, additional to the assigned capital.

7.2. Consolidated basis.

Without prejudice to individual compliance, controlling financial institutions subject to consolidated supervision shall observe the rules on “Credit policy” on a monthly consolidated basis and, additionally and independently, quarterly (excluding their foreign subsidiaries).

Foreign subsidiaries shall be included, to the extent that they operate with resources from the entity's domestic head offices, additional to the participation in capital.

Version: 4th. COMMUNICATION “A” 5892
Effective date:
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CREDIT POLICY B.C.R.A.
Section 8. Transitional provisions.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

For all those placements that are constituted by reason of Law 26.476 on externalization and repatriation of capital, the following must be observed:

8.1. Application of the lending capacity.

Financial institutions receiving deposits made by application of the provisions of Law 26.476 must allocate the resources to special lines of credit to the productive sector in accordance with the regulations of the National Executive Power, being additionally applicable, in the case of funds raised in foreign currency, the provisions set forth in point 2.1.

8.2. Defect of application.

The defect of application in pesos shall be subject to an equivalent increase in the minimum cash requirement in pesos, while in foreign currency it shall be subject to the provisions of point 2.7.

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Effective date:
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CREDIT POLICY

CONSOLIDATED TEXT ORIGINATING RULE
Sect. Point Par. Comm. Annex Chap. Sect. Point Par.
OBSERVATIONS
1st “A” 2736 6. Includes interpretive clarification.
5. 5.3.
last “A” 4311
6. “A” 3987 1. According to Com. “A” 5560.
7.1. “A” 4311 According to Com. “A” 5493 and
5892.
7.
7.2. “A” 4311 According to Com. “A” 5493 and
5892.
8. 8.1. “A” 4916 2.
8.2. “A” 4916 2.