Credit Policy Update: Replacement Sheets Incorporating Communication A 3987

2014 - YEAR OF TRIBUTE TO ADMIRAL GUILLERMO BROWN, ON THE BICENTENNIAL OF THE NAVAL BATTLE OF MONTEVIDEO

COMMUNICATION “A” 5560
17/03/2014

TO THE FINANCIAL INSTITUTIONS:

Ref.: Circular
OPRAC 1 - 725

Credit policy. Update.

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We address you to send you the replacement sheets that must be incorporated into the rules on “Credit policy”, for the purposes of including the provisions made known through Communication “A” 3987.

We greet you attentively.

CENTRAL BANK OF THE ARGENTINE REPUBLIC

Matías A. Gutiérrez Girault
Issuance Manager of Rules

Alfredo A. Besio
Deputy General Manager of Rules

ANNEX

B.C.R.A. CREDIT POLICY

-Index-

Section 7. Credits with clause of application of the Reference Stabilization Coefficient.

Section 8. Bases of observance.

8.1. Individual base.

8.2. Consolidated base.

Section 9. Transitional provisions.

Correlation table.

Version: 2nd. COMMUNICATION “A” 5560
Validity:
18/03/2014
Page 2

CREDIT POLICY
B.C.R.A. Section 7. Credits with clause of application of the Reference Stabilization Coefficient.

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

7.1. Interfinancial loans.

Currency: pesos.

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

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

Currency: pesos.

Minimum term: one year.

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

7.3. 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 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, seeking 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 provided for 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 of longer terms.

In the case of financings with a payment frequency greater than monthly, the percentage of 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 acceptance or not of this option by the client as well as that the client has 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.

Version: 3rd. COMMUNICATION “A” 5560
Validity:
18/03/2014
Page 1

CENTRAL BANK OF THE ARGENTINE REPUBLIC

CREDIT POLICY
B.C.R.A. Section 7. Credits with clause of application of the Reference Stabilization Coefficient.

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 Reference Stabilization Coefficient (“CER”).

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

Version: 1st. COMMUNICATION “A” 5560
Effective:
18/03/2014
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CREDIT POLICY B.C.R.A.
Section 8. Bases of observance.

8.1. Individual basis.

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

Such provisions, with the exception of Section 6., 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.

8.2. Consolidated basis.

Without prejudice to individual compliance, controlling financial institutions subject to consolidated supervision shall observe the rules on “Credit Policy”, with the exception of Section 6., 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 equity participation.

Version: 3rd. COMMUNICATION “A” 5560
Effective:
18/03/2014
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CREDIT POLICY B.C.R.A.
Section 9. Transitional provisions.

9.1. For all those placements constituted by reason of Law 26.476 on externalization and repatriation of capital, the following shall be observed:

9.1.1. Application of lending capacity.

Financial institutions receiving deposits made by application of the provisions of Law 26.476 must allocate the resources to special credit lines to the productive sector in accordance with the regulations of the National Executive Power, with the provisions set forth in point 2.1. of Section 2 additionally applying in the case of funds raised in foreign currency.

9.1.2. Application shortfall.

The application shortfall 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. of Section 2.

9.2. As of 13.12.13, the application of the provisions of the penultimate paragraph of point 6.1. of Section 6., referring to the treatment of economic groups, is suspended.

Version: 1st. COMMUNICATION “A” 5560
Effective:
18/03/2014
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CREDIT POLICY

CONSOLIDATED TEXT ORIGINATING RULE
Sect. Point Par. Com. Annex Chap. Sect. Point Par.
OBSERVATIONS
1st “A” 2736 6. Includes interpretive clarification.
5. 5.3.
last “A” 4311
6.1. “A” 5493 1. According to Com. “A” 5505.
6.2. “A” 5493 1. According to Com. “A” 5505.
6.3. “A” 5493 1. According to Com. “A” 5505.
6.
6.4. “A” 5505
7. “A” 3987 1. According to Com. “A” 5560.
8. 8.1. “A” 4311 According to Com. “A” 5493.
8.2. “A” 4311 According to Com. “A” 5493.
9.1. 1st “A” 4916 2.
9.1.1. “A” 4916 2.
9.1.2. “A” 4916 2.
9.
9.2. “A” 5510