Minimum Capital of Financial Entities. Modifications.

"2008 - Year of the Teaching of Sciences"
COMMUNICATION "A" 4782 03/03/2008
TO FINANCIAL ENTITIES:
Ref.: Circular
LISOL 1 - 484
Minimum Capital of Financial Entities. Modifications.

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

"1. Replace the last paragraph of point 7.2.2.4. of Section 7. of the rules on "Minimum Capital of Financial Entities", with the following:
"The total of the debt-representative instruments and their respective reserve funds computed as supplementary net equity, together with the other computable subordinated liabilities, shall not exceed the equivalent of 50% of basic net equity."

2. Substitute point 7.2.4. of Section 7. of the rules on "Minimum Capital of Financial Entities", with the following:
   "7.2.4. Computable Subordinated Debt.
   The obligations of the entity, contractually subordinated to other liabilities, which are admitted to be computed for the purpose of determining the computable equity responsibility, must observe the following requirements:

7.2.4.1. Conditions
i) The weighted average life term at the time of incurring the debt shall not be less than 5 years.
This term shall be the result of dividing by 365 the sum of the days that elapse between the date of incurring the debt and the due date of each of the capital amortization services, multiplied by the proportion that each of the services represents in relation to the total instrument, considered at their nominal value.

-2-
In the event that the anticipated interests result, in the judgment of the Superintendence of Financial and Exchange Entities, notably superior to those usually established in debts of similar characteristics, in order to establish the average term of the obligation, the "duration" method shall be used. This term shall arise from weighting the number of days that elapse between the date of incurring the debt and the due date of each of the future services in concept of capital and interests, as appropriate, by the proportion that the economic value of each of the services represents in relation to the economic value of the instrument. For this latter effect, the net present value of future cash flows discounted at their internal rate of return shall be considered.

ii) The redemption or early cancellation of the obligation, if provided for, may only be carried out at the option of the debtor provided that:
a) it has authorization from the Superintendence of Financial and Exchange Entities prior to the exercise of the option and b) the computable equity responsibility, after the redemption or cancellation, results equal to or greater than the minimum capital requirement.

iii) The instrument shall not contain clauses that declare the obligation due in case of failure to pay the amortization or interest services of this or other debts or for any other reason, except bankruptcy.

iv) The instrument shall provide that, in the event of the entity's bankruptcy and once all debts with other non-subordinated creditors have been satisfied, its creditors shall have precedence in the distribution of funds solely and exclusively with respect to shareholders - regardless of the class of shares -, with express waiver of any general or special privilege. In addition, it shall be established that this distribution shall be carried out among all subordinated debts in proportion to the verified liabilities.

v) They may have interest coupons linked to the results of the financial entity.

7.2.4.2. Computable Amount.
From the beginning of each of the last five years of life of each debt, the computable amount shall be decreased by 20% of the nominal value issued net of effective amortizations.

-3-
In no case shall the computable amount at the start of each of these periods be greater than that resulting from applying said percentage cumulatively on the residual obligation at the end of each of these years, according to the schedule of capital amortization services fixed. The total of this concept, together with the debt-representative instruments and their respective reserve funds computed as supplementary net equity, may reach up to the equivalent of 50% of basic net equity. In the event that the placement is made below par, for the determination of the computable equity responsibility, the amount effectively received shall be taken into account, that is, deducting issuance discounts, not considering as such the commissions retained by the intervening placement agent. Subordinated debt issued in foreign currency from 1.10.06 shall be computed, at all times, at the peso value at the exchange rate corresponding to the date of placement. The computable amount shall be decreased in proportion to the amortizations that are effected.

7.2.4.3. Prior Authorization.
The computation as supplementary net equity shall only be admitted if there is prior authorization from the Superintendence of Financial and Exchange Entities, whose intervention shall have the purpose of verifying the observance of the enumerated requirements and, in particular, that the entity complies with the minimum capital requirement. If the Superintendence does not expressly rule within the term of 30 calendar days counted from the date of presentation by the entity, the authorization shall be deemed granted.

7.2.4.4. Failure to Pay Services.
The sole failure to pay any of the amortization or interest services shall not be considered a cause for revocation of the authorization to function as a financial entity, provided that:
i) the manner of extinguishing the unpaid obligation is determined within the year of its due date, ii) other non-subordinated obligations are normally attended to, iii) cash dividends are not distributed to shareholders, iv) fees are not paid to directors and auditors, except in cases where they perform executive functions, and

-4- v) if they have interest coupons linked to the results of the financial entity, they do not register distributable results, calculated in accordance with the general procedure provided in Section 2. of the rules on "Distribution of Results". The non-compliance with these requirements by the entity shall not imply any responsibility for the Central Bank of the Argentine Republic, an aspect that must be expressly stated in the offering prospectuses and in the issued instrument.

7.2.4.5. Purchase and Relocation. Prohibition.
Financial entities shall not purchase for subsequent relocation their own issuances of subordinated debt that have been or are considered for the purposes of determining the computable equity responsibility. Nor shall they acquire, from 1.10.06, issuances made by other financial entities.

7.2.4.6. Concept of Subordination.
A debt is considered subordinated with respect to other liabilities when, under equal conditions regarding eventual privileges or among unsecured creditors, the creditor of said debt accepts granting precedence in the collection of the claim, in the event of the debtor's bankruptcy, to other liabilities under equal conditions. In the case regulated herein, this character implies the situation described in point 7.2.4.1. iv) above."

Finally, we send you attached the sheets that replace those previously provided, which correspond to be replaced in the ordered text of the referenced rules.
Likewise, it is recalled that on this Institution's website www.bcra.gov.ar, accessing "regulations" ("ordered texts"), the modifications made with texts highlighted in special characters (strikethrough and bold) will be found. We salute you very attentively. CENTRAL BANK OF THE ARGENTINE REPUBLIC Darío C. Stefanelli José I. Rutman Manager of Issuance of Regulations General Manager of Regulations

ANNEX

The total of the debt-representative instruments and their respective reserve funds computed as supplementary net equity, together with the other computable subordinated liabilities, shall not exceed the equivalent of 50% of basic net equity.

7.2.2.5. Failure to Pay Financial Services.
The sole failure to pay any of the non-due services -due to the non-existence of positive unassigned results or reserve fund- shall not be considered a cause for revocation of the authorization to function as a financial entity, provided that:
i) other non-subordinated obligations are normally attended to, ii) cash dividends are not distributed to shareholders, and iii) fees are not paid to directors and auditors, except in cases where they perform executive functions.

7.2.2.6. Cancellation of the Reserve.
The reserve shall be reversed with a counterpart in unassigned results at the time of each accrual and/or the payment of financial services, whichever occurs first. If there is a remaining balance in the said reserve, it must be reversed before the next assembly.

7.2.3. Supplementary Net Equity.
It comprises the positive or negative result of the algebraic sum of the following concepts:

7.2.3.1. Contractually subordinated obligations:
i) to other liabilities, issued under the conditions established in point 7.2.4. (+). ii) debt-representative instruments and amounts of their respective reserve funds, as contemplated in point 7.2.2.4. iv) (+).

7.2.3.2. 100% of the results registered up to the last quarterly accounting statement that has an auditor's report, corresponding to the last closed fiscal year and for which the auditor has not yet issued its opinion (+ / -).

7.2.3.3. 100% of the results of the current fiscal year registered at the close of the last quarterly accounting statement, once it has an auditor's report (+ / -).

MINIMUM CAPITAL OF FINANCIAL ENTITIES
B.C.R.A.
Section 7. Computable Equity Responsibility.
Version: 6a. COMMUNICATION "A" 4782
Validity:
03/03/2008

7.2.3.4. 50% of profits or 100% of losses, from the last quarterly or annual accounting statement that has an auditor's report or opinion. These percentages shall be applied to the accumulated net balance calculated at the close of each month, provided that what is provided in the two previous paragraphs does not apply (+ / -).

7.2.3.5. 100% of losses not considered in the accounting statements, corresponding to the quantification of the facts and circumstances reported by the auditor, in accordance with what is provided in the Minimum Standards on External Audits regarding the reports with the results of the limited reviews of the accounting statements, at the close of each quarter (-).

7.2.3.6. Provisions for uncollectibility risk on the portfolio corresponding to debtors classified as "in normal situation" (points 6.5.1. and 7.2.1. of the rules on "Classification of Debtors") and financings that are covered with preferred guarantees "A" (only 50% of the minimum required amount) (+).

7.2.3.7. Creditor or debtor balances registered in the accounts named "Difference of unrealized valuation of holdings of national public securities available for sale", "Difference of unrealized valuation of holdings of Letters issued by the B.C.R.A. available for sale" and "Difference of unrealized valuation of holdings of Notes issued by the B.C.R.A. available for sale", respectively (+ / -).
For the purposes of computing 100% of the results registered up to the last quarterly or annual balance, the respective accounting statement with the auditor's report must be presented on the date when the presentation of the monthly balance is mandatory.

7.2.4. Computable Subordinated Debt.
The obligations of the entity, contractually subordinated to other liabilities, which are admitted to be computed for the purpose of determining the computable equity responsibility, must observe the following requirements:

7.2.4.1. Conditions
i) The weighted average life term at the time of incurring the debt shall not be less than 5 years.
This term shall be the result of dividing by 365 the sum of the days that elapse between the date of incurring the debt and the due date of each of the capital amortization services, multiplied by the proportion that each of the services represents in relation to the total instrument, considered at their nominal value.

MINIMUM CAPITAL OF FINANCIAL ENTITIES
B.C.R.A.
Section 7. Computable Equity Responsibility.
Version: 6a. COMMUNICATION "A" 4782
Validity:
03/03/2008

In the event that the anticipated interests result, in the judgment of the Superintendence of Financial and Exchange Entities, notably superior to those usually established in debts of similar characteristics, in order to establish the average term of the obligation, the "duration" method shall be used. This term shall arise from weighting the number of days that elapse between the date of incurring the debt and the due date of each of the future services in concept of capital and interests, as appropriate, by the proportion that the economic value of each of the services represents in relation to the economic value of the instrument. For this latter effect, the net present value of future cash flows discounted at their internal rate of return shall be considered.

ii) The redemption or early cancellation of the obligation, if provided for, may only be carried out at the option of the debtor provided that:
a) it has authorization from the Superintendence of Financial and Exchange Entities prior to the exercise of the option and b) the computable equity responsibility, after the redemption or cancellation, results equal to or greater than the minimum capital requirement.

iii) The instrument shall not contain clauses that declare the obligation due in case of failure to pay the amortization or interest services of this or other debts or for any other reason, except bankruptcy.

iv) The instrument shall provide that, in the event of the entity's bankruptcy and once all debts with other non-subordinated creditors have been satisfied, its creditors shall have precedence in the distribution of funds solely and exclusively with respect to shareholders - regardless of the class of shares -, with express waiver of any general or special privilege. In addition, it shall be established that this distribution shall be carried out among all subordinated debts in proportion to the verified liabilities.

v) They may have interest coupons linked to the results of the financial entity.

MINIMUM CAPITAL OF FINANCIAL ENTITIES
B.C.R.A.
Section 7. Computable Equity Responsibility.
Version: 8a. COMMUNICATION "A" 4782
Validity:
03/03/2008

7.2.4.2. Computable Amount.
From the beginning of each of the last five years of life of each debt, the computable amount shall be decreased by 20% of the nominal value issued net of effective amortizations.

In no case shall the computable amount at the start of each of these periods be greater than that resulting from applying cumulatively said percentage on the residual obligation at the end of each of these years, according to the schedule of capital amortization services fixed.

The total of this concept, together with the debt-representative instruments and their respective reserve funds computed as supplementary net equity, may reach up to the equivalent of 50% of basic net equity.

In the event that the placement is made below par, for the determination of the computable equity responsibility, the amount effectively received shall be taken into account, that is, deducting issuance discounts, not considering as such the commissions retained by the intervening placement agent.

Subordinated debt issued in foreign currency from
1.10.06 shall be computed, at all times, at the peso value at the exchange rate corresponding to the date of placement. The computable amount shall be decreased in proportion to the amortizations that are effected.

7.2.4.3. Prior Authorization.
The computation as supplementary net equity shall only be admitted if there is prior authorization from the Superintendence of Financial and Exchange Entities, whose intervention shall have the purpose of verifying the observance of the enumerated requirements and, in particular, that the entity complies with the minimum capital requirement.

If the Superintendence does not expressly rule within the term of 30 calendar days counted from the date of presentation by the entity, the authorization shall be deemed granted.

7.2.4.4. Failure to Pay Services.
The sole failure to pay any of the amortization or of the interest services shall not be considered a cause for revocation of the authorization to function as a financial entity, provided that:
i) the manner of extinguishing the unpaid obligation is determined within the year of its due date,

MINIMUM CAPITAL OF FINANCIAL ENTITIES
B.C.R.A.
Section 7. Computable Equity Responsibility.
Version: 3a. COMMUNICATION "A" 4782
Validity:
03/03/2008

ii) other non-subordinated obligations are normally attended to, iii) cash dividends are not distributed to shareholders, iv) fees are not paid to directors and auditors, except in the cases where they perform executive functions, and v) if they have interest coupons linked to the results of the financial entity, they do not register distributable results, calculated in accordance with the general procedure provided in Section 2. of the rules on "Distribution of Results".

The non-compliance with these requirements by the entity shall not imply any responsibility for the Central Bank of the Argentine Republic, an aspect that must be expressly stated in the offering prospectuses and in the issued instrument.

7.2.4.5. Purchase and Relocation. Prohibition.
Financial entities shall not purchase for subsequent relocation their own issuances of subordinated debt that have been or are considered for the purposes of determining the computable equity responsibility.

Nor shall they acquire, from 1.10.06, issuances made by other financial entities.

7.2.4.6. Concept of Subordination.
A debt is considered subordinated with respect to other liabilities when, under equal conditions regarding eventual privileges or among unsecured creditors, the creditor of said debt accepts granting precedence in the collection of the claim, in the event of bankruptcy of the debtor, to other liabilities under equal conditions. In the case that is regulated herein, this character implies the situation described in point
7.2.4.1. iv) above.

7.2.5. Deductible Concepts.

7.2.5.1. Balances in correspondent accounts and other call placements in banks and other financial institutions abroad that do not have an international risk rating included in the "investment grade" category, granted by one of the rating agencies admitted by the rules on "Evaluation of Financial Entities".

This deduction shall be made by the highest balance in each bank that is registered during the month to which the determination of the computable equity responsibility corresponds.

MINIMUM CAPITAL OF FINANCIAL ENTITIES
B.C.R.A.
Section 7. Computable Equity Responsibility.
Version: 2a. COMMUNICATION "A" 4782
Validity:
03/03/2008

To this end, balances in correspondent accounts and other call placements, which are registered with respect to:
a) The head office of local branches of foreign banks or their subsidiaries and their subsidiaries in other countries, to the extent that the head office is subject to supervision on a consolidated basis. b) Banks or other financial institutions abroad subject to supervision on a consolidated basis that exercise control over local financial entities constituted as joint-stock companies. c) Other foreign banks authorized to intervene in the regimes of reciprocal payment and credit agreements to which the Central Bank of the Argentine Republic has adhered, as well as their branches and subsidiaries, even if they are not included in those agreements, provided that the head office or controlling banking entity is subject to regimes of supervision on a consolidated basis, to the satisfaction of the Superintendence of Financial and Exchange Entities. d) Branches and subsidiaries of local financial entities subject to the consolidated supervision regime. e) Balances that, on a temporary and circumstantial basis, originate from client operations, such as those related to foreign trade operations or other type of accreditation ordered by third parties that do not imply equity responsibility for the entity.

Without prejudice to what is provided in this point, financial entities shall open for each of their foreign correspondents a file containing the information and other elements of judgment that allow knowing their identification, rating, credit margins and any other data linked to that relationship.

7.2.5.2. Credit titles (securities, certificates of time deposits and
others) that are not physically in the possession of the entity, unless their registration or custody of registration certificates or paper securities is under the charge of:
i) Central Bank of the Argentine Republic, for operations channeled through the Central Registry and Clearing of Public Liabilities and Financial Trusts ("CRYL"). ii) Caja de Valores S.A. iii) Cedel, Euroclear and Depositary Trust Company (DTC). iv) Deutsche Bank, New York.

MINIMUM CAPITAL OF FINANCIAL ENTITIES
B.C.R.A.
Section 7. Computable Equity Responsibility.
Version: 2a. COMMUNICATION "A" 4782
Validity:
03/03/2008

In the event that deductible assets are maintained in accordance with this provision, the entity must record the existence of such items in the notes to the quarterly and annual financial statements, quantifying the amount that is not admitted for the purpose of determining computable equity.

7.2.5.3. Securities issued by governments of foreign countries, whose international risk rating is lower than that assigned to public securities of the Argentine Republic, and which do not have markets where they are traded habitually for relevant values.

This deduction shall be made for the amount of the highest balance recorded during the month to which the determination of computable equity corresponds.

For this purpose, mandatory investments that branches or subsidiaries - subject to the consolidated supervision regime - of local financial entities must make due to requirements imposed by the monetary or supervisory authority of the country where they operate shall not be considered.

7.2.5.4. Debt securities and other debt instruments, contractually subordinated to other liabilities, issued by other financial entities that were acquired by 9/30/06.

This deduction shall be made for the amount of the highest balance recorded during the month to which the determination of computable equity corresponds.

7.2.5.5. Participations in financial entities, except when exemptions apply for not deducting them, net:

i) of provisions for devaluation risk, and

ii) when they concern controlled financial entities and it is necessary to apply what is provided in point 7.2.3.4., of 50% of the earnings of these in proportion to the respective participation.

7.2.5.6. Participations in foreign financial entities net:

i) of provisions for devaluation risk, and

ii) when they concern controlled financial entities and it is necessary to apply what is provided in point 7.2.3.4., of 50% of the earnings of these in proportion to the respective participation.

7.2.5.7. Participations linked to the application of the deferral of tax payments, incorporated by 2/19/99, or subsequently when they come from irrevocable subscription commitments instrumented by that date, from the month following the expiration of the legal period of unavailability or the lapse, whichever occurs first, of the tax benefits, according to the pertinent legal and regulatory provisions.

MINIMUM CAPITAL OF FINANCIAL ENTITIES

B.C.R.A.

Section 7. Computable Equity.

Version: 2nd. COMMUNICATION “A” 4782

Validity:

03/03/2008

7.2.5.8. Shareholders.

7.2.5.9. Real estate, regardless of the date of incorporation into the assets, intended or not for the operation of the entity, whose accounting registration is not backed by the pertinent deed of transfer of ownership duly registered in the respective Real Estate Registry, except those acquired through judicial auction.

The deduction shall be equivalent to 100% of the value of said assets from their incorporation into the assets, until the month prior to the regularization of that situation.

The Superintendence of Financial and Exchange Entities may dispose of exclusions in this matter, to the extent that they do not undermine the objective of the deduction.

7.2.5.10. Goodwill (incorporations registered from 5/30/97).

7.2.5.11. Organization and development expenses, except the items expressly established as non-deductible, net of accumulated amortization.

7.2.5.12. Items pending allocation - Debit Balances - Others.

7.2.5.13. Upon request made by the Superintendence of Financial and Exchange Entities and with effect from the date indicated in each case, financial entities must deduct the amounts of the assets included, when from the elements made available to the acting inspectors it emerges that the accounting registrations made by the entities do not accurately reflect the economic and legal reality of the operations or that actions or tricks have been carried out to denature or disguise the true character or scope of the operations.

The allocation of computable equity by application of the above shall determine the obligation to verify the classification of the different norms that use the aforementioned liability as a base, from the month in which the request made has effect and, if applicable, the resulting charges shall be deposited within the term of 10 business days, counted from the date of notification of the request. In the event of payment outside the fixed term, the pertinent interest for delay arising from the application of each infringed norm shall be paid.

7.2.5.14. Differences due to insufficiency in the constitution of the minimum provisions for uncollectible risk determined by the Superintendence of Financial and Exchange Entities, to the extent that they have not been accounted for, with effect at the close of the month following that in which the entity receives the notification referred to in the first paragraph of point 2.7. of Section 2. of the norms on “Minimum provisions for uncollectible risk”.

MINIMUM CAPITAL OF FINANCIAL ENTITIES

B.C.R.A.

Section 7. Computable Equity.

Version: 2nd. COMMUNICATION “A” 4782

Validity:

03/03/2008

MINIMUM CAPITAL OF FINANCIAL ENTITIES

ORDERED TEXT ORIGIN NORM

Section Point Paragraph Com.
Cap./
Annex
Point Paragraph
Observations

5.6. “A” 2922 I According to Com. “B” 6523 and “A” 4172.
Point 5.6.4.5., 3274, 3959, 4180 and
4543 and “B” 9186.
6.1. and
6.2.
“A” 2461 unique I. and II. According to Com. “A” 4172 and 4741.
6.3. and
6.4.
“A” 2461 unique I. and II. According to Com. “A” 3959 and 4172.
6.5. “A” 2461 unique I. and II. According to Com. “A” 2736, 2768, 2948,
3959, 4172 and “B” 9074. The point
6.5.2. includes interpretative clarification.
6.6. “A” 2461 unique III. According to Com. “A” 3161 and 4172.
6.7. “A” 2461 unique VI. According to Com. “A” 4172.
6.
6.8. “A” 2461 unique VII. According to Com. “A” 4172.
7.1. “A” 414
LISOL-1
VI 3.1. 1st According to Com. “A” 2279, 2453, 2793, 2914, 3039 and 4172.
7.2.1. “A” 414
LISOL-1
VI 3.1.1. According to Com. “A” 2223, 2227, 4296, (point 2.), 4576 (point 1.) and 4665.
7.2.2. “A” 4576 2. According to Com. “A” 4591 (points 2.,3.,
4. and 5.), 4665 -the point 7.2.2.5. includes interpretative clarification- and
4782.
7.2.3. “A” 414
LISOL-1
VI 3.1.2. According to Com. “A” 2223, 2768, 2948, 4172, 4576 (point 3.), 4665, 4702 and “B” 9074.
7.2.4. 1st “A” 414
LISOL-1
VI 3.1.2.2. According to Com. “A” 2264, 4172, 4576 (point 4.) and 4782.
7.2.4.1. and
7.2.4.2.
“A” 414
LISOL-1
VI 3.1.2.2. According to Com. “A” 2264, 4172, 4576 (points 5. and 6.) and 4782.
7.2.4.3. and
7.2.4.4.
“A” 414
LISOL-1
VI 3.1.2.2. According to Com. “A” 2264, 4172 and “A”
4782. In the second paragraph of
point 7.2.4.3. incorporates interpretative clarification.
7.2.4.5. “A” 2264 2. According to Com. “A” 4172 and 4576 (point 8.).
7.2.4.6. “A” 414
LISOL-1
VI 3.1.2.2. According to Com. “A” 2264, 4172 and 4665.
7.2.5.1. “A” 2287 3.1. and
3.3.
According to Com. “A” 2890 and 4172.
“A” 2287 3. last According to Com. “A” 4172.
7.2.5.2. 1st “A” 2497 1. According to Com. “A” 3621 and 4172.
last “A” 2263 2. According to Com. “A” 4172.
1st and last “A” 2287 3.2. According to Com. “A” 4172.
7.
7.2.5.3.
2nd “A” 2474 Norms of procedure on requirement and integration of minimum capital (point 3.2.7). Modified by Com.“A” 4172.