Minimum Cash: Financial Services under the COVID-19 Health Emergency (Decree No. 260/2020) - Adjustments

2020 - YEAR OF GENERAL MANUEL BELGRANO

COMMUNICATION “A” 7157
05/11/2020

TO FINANCIAL INSTITUTIONS,
TO FOREIGN EXCHANGE OPERATORS,
TO NON-FINANCIAL CREDIT CARD ISSUING COMPANIES, TO NON-FINANCIAL PURCHASE CARD ISSUING COMPANIES, TO OTHER NON-FINANCIAL CREDIT PROVIDERS, TO ELECTRONIC CLEARING HOUSES, TO AUTOMATED TELLER MACHINE NETWORK ADMINISTERING COMPANIES, TO FINANCIAL MARKET INFRASTRUCTURES, TO SECURITIES TRANSPORTERS:

Ref.: Circular
REMON 1 - 1034
OPRAC 1 - 1074
SERVI 1 - 78
RUNOR 1 - 1619
SINAP 1 - 118

Minimum cash. Financial services in the framework of the health emergency ordered by Decree No. 260/2020 Coronavirus (COVID-19). Adjustments .

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

“1. To leave without effect the obligation to grant financings to MSMEs established in point 2. of Communication “A” 7140 –within the framework of the Emergency Assistance Program for Work and Production (ATP) created by Decree No. 332/2020, for a maximum limit equivalent to the amount resulting from the number of salaried workers (F. 931) multiplied by the amount of the Minimum Vital and Mobile Salary plus 20%– and the possibility of imputing them for the deductions provided in points 1.5.5. and 1.5.7. of the rules on “Minimum cash”.

2. To establish that, as from 6.11.2020, financial institutions may only impute for the reduction of the minimum cash requirement in pesos provided in point 1.5.6. of the rules on “Minimum cash” the “Credits at Subsidized Rate for Companies” that they disburse as from that date and in accordance with the following:

− credits at a nominal annual rate of 27%: they will deduct an amount equivalent to 24% of the sum of those financings.

− credits at a nominal annual rate of 33%: for an amount equivalent to 7% of the sum of those financings.

The monthly average of daily balances of the period prior to the computation of the requirement shall be considered.” On the other hand, we send you the sheets that, in replacement of those opportunely provided, should be incorporated into the reference rules based on the provisions of this communication and by the Administrative Decision of the Chief of Cabinet of Ministers No. 1954/2020. In this regard, it is recalled that on the page of this Institution www.bcra.gob.ar, by accessing “Financial System – LEGAL AND REGULATORY FRAMEWORK – Ordering and summaries – Ordered texts of general regulations”, 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
Principal Manager of Issuance and
Regulatory Applications
María D. Bossio
General Deputy Manager of Financial Regulation

WITH COPY TO EXTRA-BANK COLLECTION COMPANIES

ANNEX

MINIMUM CASH B.C.R.A.
Section 1. Requirement.

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

The requirement shall be reduced by an amount equivalent to:

i) 60% of the sum of the “Zero Rate Credits”, “Subsidized Rate Credits for Companies” and “Zero Rate Culture Credits” granted in the framework of Decree No. 332/2020 (and amendments) and disbursed up to 5.11.2020;

ii) 24% of the “Subsidized Rate Credits for Companies” disbursed as from 6.11.2020 at a nominal annual rate of 27%;

iii) 7% of the “Subsidized Rate Credits for Companies” disbursed as from 6.11.2020 at a nominal annual rate of 33%.

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

1.5.7. Financings to MSMEs not reported in the “Central de deudores del sistema financiero”.

The requirement shall be reduced by an amount equivalent to 40% of the financings in pesos to MSMEs –in accordance with the definition contained in the rules on “Determination of the condition of micro, small or medium-sized enterprise”– that are granted at a nominal annual interest rate of up to 24%, measured in monthly average of daily balances of the previous month, provided that said MSMEs are not reported in the “Central de deudores del sistema financiero” administered by the BCRA.

Financings granted to other financial institutions and to non-financial credit providers –registered in the corresponding registries enabled by the SEFyC– may be included in that sum, provided that: i) within 3 business days from the date on which they receive the assistance those entities allocate the funds to granting financings to MSMEs under the conditions of this point and ii) they have a special report from an external auditor –registered in the “Registro de auditores” of the SEFyC–, which conforms to the provisions of point 1.5.4.

The financings computed for the deduction of points 1.5.1. and 1.5.4. to 1.5.7. may only be computed in one of the aforementioned points. The imputation of the financings of points 1.5.4., 1.5.5. and 1.5.7. shall conform to the following:

i. Financings granted up to 15.10.2020 inclusive: their monthly average of daily balances in the previous period shall continue to be computed for the corresponding deduction.

In the case of financings disbursed as from 9.10.2020 and up to 15.10.2020, in both cases inclusive, they may not impute for the deductions of points 1.5.4., 1.5.5. and 1.5.7. the financings to persons –natural or legal– that:

− belong to sectors of economic activity that have not been considered eligible for any of the benefits of the Emergency Assistance Program for Work and Production (ATP) created by Decree No. 332/2020; and/or

− after 19.3.2020 have imported final consumer goods, except that

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Effective:
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MINIMUM CASH B.C.R.A.
Section 1. Requirement.

it concerns medical products and/or supplies.

ii. Financings granted as from 6.11.2020 inclusive: they shall be voluntary and may not be charged against the deductions in points 1.5.4., 1.5.5. and 1.5.7.

1.6. One-off increases in the requirement due to liability concentration.

When an excessive concentration of liabilities (in holders and/or maturities) is verified, which entails a significant risk with respect to the individual liquidity of the financial institution and/or has a significant negative effect on systemic liquidity, additional minimum cash requirements may be set on the institution's included liabilities and/or such complementary measures as are deemed pertinent.

This situation shall be considered to arise when, among others, any of the following factors is present:

− A high percentage of liabilities is concentrated in a single holder or holders.

− In term obligations, the maturity is short.

− The aforementioned liabilities represent a significant percentage with respect to the integration of the minimum cash and/or the total private-sector deposits in the institution.

1.7. Transfers.

1.7.1. Admitted margin.

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

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

Where

EEMA (n): adjusted minimum cash requirement corresponding to period "n".

EEF (n): minimum cash requirement under current rules corresponding to period "n".

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

1.7.2. Utilization period.

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

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

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Effective date:
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MINIMUM CASH

CONSOLIDATED TEXT			SOURCE RULE					OBSERVATIONS
Sec.	Point	Parr.	Comm.	Annex	Sec.	Point	Parr.
1.	1.3.8.		"A" 4360			2.		According to Comm. "A" 5356 and 6616.
	1.3.9.		"A" 4754			6.		According to Comm. "A" 5356, 5980, 6195, 6526, 6532, 6616 and 6728.
	1.3.10.		"A" 5945			4.		According to Comm. "A" 6069, 6204 and 6616.
	1.3.11.		"A" 6341					According to Comm. "A" 6616.
	1.3.12.		"A" 6069			4.		According to Comm. "A" 6616.
	1.3.13.		"A" 6992
	1.3.14.		"A" 5356			1.		According to Com. "A" 6616 and 6706.
	1.3.15.		"A" 6526					According to Com. "A" 6532, 6550, 6587, 6616, 6706 and 7016.
	1.3.16.		"A" 6550					According to Com. "A" 6556, 6559, 6575, 6587, 6616, 6706, 6738, 6740, 6817, 7018, 7029, 7047 and 7092. Includes interpretive clarification.
1.3.	Last		"A" 6526					According to Com. "A" 6532, 6556, 6569, 6575, 6587, 6616, 6628, 6740 and 7016.
1.4.			"A" 3905			3.		According to Com. "A" 4179, 4449, 4473, 5671, 5740, 6232, 6349, 6719, 6871 and 7046.
1.5.			"A" 5356			2.		According to Com. "A" 5471.
1.5.1.			"A" 5356			2.		According to Com. "A" 5471, 5623, 6531, 6703 and 6705.
1.5.2.			"A" 5631			1.		According to Com. "A" 5638, 6217, 6531, 6857, 6910, 6937 and 7114.
1.5.3.			"A" 6740			1.
1.5.4.			"A" 6858			1.		According to Com. "A" 6901 and 6907.
1.5.5.			"A" 6937			2.		According to Com. "A" 6943, 7054, 7140 and 7155.
1.5.6.			"A" 6993			2.		According to Com. "A" 7082 and 7157.
1.5.7.			"A" 7006			2.
1.5.	last		"A" 6858			2.		According to Com. "A" 6965, 6993, 7006, 7140 and 7155.
	i)		"A" 7132					According to Com. "A" 7140.
	ii)		"A" 7140			2.		According to Com. "A" 7157.
1.6.			"A" 3274	II	1.	1.5.		According to Com. "A" 3498.
1.7.			"A" 3274	II	1.	1.6.
1.7.1.			"A" 3274	II	1.	1.6.1.		According to Com. "A" 4405, 4449, 6349, 6719 and 7046.
1.7.2.			"A" 3274	II	1.	1.6.2.		According to Com. "A" 3304, 4449, 6349 and 6719.
1.8.			"A" 3498	único	1.	1.8.		According to Com. "A" 4147, 6537 and 7003.
1.9.			"A" 5380					According to Com. "A" 5449, 5516, 5600, 5654 and 5771. Includes interpretive clarification.
2.	2.1.		"A" 3274	II	2.	2.1.		According to Com. "A" 3498, 3597, 4716, 4815, 6288, 6763 and "B" 9186.

Section 2. Other provisions.

In each of those accreditations, the amount equivalent to the payment of the total sums that must be paid for the resulting monthly periods as integrated tax and pension contributions borne by the taxpayers adhering to the Simplified Regime for Small Taxpayers or mandatory pension contributions of the regime of self-employed workers shall be added. The referred amount shall be withheld and deposited by the financial entity in the AFIP.

The "Zero rate credit" shall have a grace period of 6 months from the first accreditation. From the following month, it shall be repaid in at least 12 equal and consecutive monthly installments.

The "Zero rate culture credit" shall have a grace period of 12 months from its first accreditation. From the thirteenth month, it shall be repaid in at least 12 equal and consecutive monthly installments.

In the event of partial payment of the settled balance of the credit card, the funds received by the financial entities must be allocated first to the cancellation of these installments.

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

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

2.1.3. Subsidized Rate Credits for Companies.

Financial entities must grant the "Subsidized Rate Credits for Companies" provided in Decree No. 332/2020 (and amendments) to all companies that request them, provided they are included in the list of beneficiaries made known by the Federal Administration of Public Revenues (AFIP).

These financings shall be in pesos and must be credited to the salary accounts –Section 2. of the rules on "Savings deposits, salary account and special"– of their workers; this accreditation may be made directly or indirectly –with credit to the company's account, for subsequent debit destined to the salary accounts–. If the worker does not hold any salary account, the financial entity must proceed to open one.

From the moment the request is received, the financial entity shall have up to 5 business days to proceed with the accreditation of the financing.

The interest rate shall be determined based on the positive nominal year-on-year variation in the company's billing with respect to the same period of the previous year based on the aforementioned list:

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Validity:
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FINANCIAL SERVICES IN THE FRAMEWORK OF THE HEALTH EMERGENCY B.C.R.A. ORDERED BY DECREE No. 260/2020 CORONAVIRUS (COVID-19)
Section 2. Other provisions.

Financings	positive year-on-year nominal variation in billing	interest rate –nominal annual–
According to Administrative Decision of the Chief of Cabinet of Ministers No. 1343/2020	from 0 % to 10 %	0 %
	more than 10 % up to 20 %	7,5 %
	more than 20 % up to 30 %	15 %
According to Administrative Decisions of the Chief of Cabinet of Ministers No. 1581/2020 and 1760/2020	less than 40 %	15 %
According to Administrative Decision of the Chief of Cabinet of Ministers No. 1954/2020	negative	27 %
	from 0 % up to 35 %	33 %

The financing shall have a grace period of:

• 3 months from its crediting for those agreed according to Administrative Decisions of the Chief of Cabinet of Ministers No. 1343/2020, 1581/2020 and 1954/2020; and

• 2 months from its crediting for those agreed according to Administrative Decision of the Chief of Cabinet of Ministers No. 1760/2020.

Once the corresponding grace period has expired, it shall be repaid in at least 12 equal and consecutive monthly installments.

The interest rate that FONDEP will recognize to financial entities shall be the difference between 15 % nominal annual and the interest rate that, in accordance with the provisions of the preceding table, the debtor will pay, and shall be applied to the balances of the disbursed financings.

2.2. Operations with the BCRA.

The BCRA shall guarantee the operation through SIOPEL of wholesale foreign exchange operations and of the auctions of BCRA Liquidity Bills.

2.3. National payment system.

The electronic clearing houses, the Electronic Means of Payment, the automated teller machine and electronic funds transfer networks, credit and debit card administrators, acquirers and processors of electronic payment means, payment service providers, as well as their related providers and any other market infrastructure necessary for the normal provision of services of financial entities and payment systems must remain operational.

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FINANCIAL SERVICES WITHIN THE FRAMEWORK OF THE HEALTH EMERGENCY B.C.R.A. ORDERED BY DECREE No. 260/2020 CORONAVIRUS (COVID-19)
Section 2. Other provisions.

2.4. Capital market.

Remote operation of the exchanges and markets authorized by the CNV, the Caja de Valores and the market agents registered with the CNV shall be allowed.

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Effective:
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B.C.R.A.
ORIGIN OF THE PROVISIONS CONTAINED IN THE RULES ON “FINANCIAL SERVICES WITHIN THE FRAMEWORK OF THE HEALTH EMERGENCY ORDERED BY DECREE No. 260/2020 CORONAVIRUS (COVID-19)”

CONSOLIDATED TEXT ORIGINATING RULE
Section Point Paragraph Com. Cap. Point Paragraph
OBSERVATIONS
1.1. 1
st
“A” 6942 2. According to Com. “A” 6949, 6951 6953, 6954, 6956, 6958, 6982 and “C” 86999.
1.1.1.1. “A” 6933 According to Com. “A” 6949, 6958,
6982 and 7025.
1.1.1.2. “A” 7067 According to Com. “A” 7084 and 7088.
1.1.1.3. “A” 6958 1. According to Com. “A” 6982, 7017 and
7028.
1.1.2. “A” 6944 3. According to Com. “A” 6958, 6982 and
7025. Decree No. 605/2020,
article 6°.
1.1.3.1. “A” 6944 1. According to Com. “A” 6949, 6982 and
7025.
1.1.3.2. “A” 6942 2.1. According to Com. “A” 6944 and 7025.
1.1.3.3. “A” 6942 2.2. According to Com. “A” 7025.
1.1.3.4. “A” 6948 7. According to Com. “A” 7084.
1.1.3.5. “A” 6949 6.
1.2. “A” 6958 2. According to Com. “A” 6982.
1.3. “A” 6942 1. According to Com. “A” 6949 and 6958.
1.
1.4. “A” 6977 According to Com. “A” 7025. Decreto
N°605/2020, article 6°. i) “A” 6942 3. According to Com. “A” 6949, 6964, and
7025. Includes interpretive
clarification. ii) “A” 7095 According to Com. “A” 7102.
2.1.1.1.
último “A” 6949 4 1 st According to Com. “A” 7025, 7044, 7056 and 7111.
2.1.1.2. “A” 6942 3. According to Com. “A” 6949, 7025,
7044, 7056, 7107 and 7130.
2.1.2. “A” 6993 1. According to Com. “A” 7082 and 7092.
2.1.3. “A” 7082 1. According to Com. “A” 7092, 7102,
7130 and 7157.
2.2. “A” 6942 6. According to Com. “A” 6949 and 7025.
2.3. “A” 6942 7. According to Com. “A” 6949 and 7025.
Decreto N° 297/2020, article
6º.
2.
2.4. “A” 6942 8. According to Com. “A” 6949 and 7025.
Decreto N° 297/2020, article
6º.
3. “B” 11992