2020 - YEAR OF GENERAL MANUEL BELGRANO

COMMUNICATION “A” 7132
09/10/2020

TO FINANCIAL INSTITUTIONS:

Ref.: Circular
REMON 1 - 1029

Minimum cash. Adequacy.

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

“1. To provide, with effect for financings disbursed as from 9.10.2020, that financial institutions may not allocate for the deductions from the minimum cash requirement provided in points 1.5.4., 1.5.5. and 1.5.7. of the rules on “Minimum cash” the financings they grant 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 in the case of medical products and/or supplies.”

On the other hand, we send you the pages that, in replacement of those previously provided, should be incorporated into the reference rules. In this regard, it is recalled that on this Institution's page www.bcra.gob.ar, by accessing “Financial System - LEGAL AND REGULATORY FRAMEWORK - Compilations 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
Deputy General Manager of Financial Regulation

ANNEX

This deduction may not exceed 4 % of the peso concepts subject to requirement on average, for the month prior to the computation month, being extended up to 6 % in the case of the following financings granted as from 1.7.2020:

− clients that received the assistance provided in point 1.5.5.1., up to the total amount equivalent to the monthly payroll (excluding bonus) payable by the applicant; and

− clients that have not received this special assistance, in accordance with the purposes admitted in this point.

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

The requirement will be reduced by an amount equivalent to 60 % of the sum of the “Zero Rate Credits”, “Subsidized Rate Credits for Companies” and “Zero Rate Culture Credits” granted within the framework of Decree No. 332/2020 (and amendments).

Its average monthly balance in the period prior to the requirement computation period will be considered.

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

The requirement will be reduced by an amount equivalent to 40 % of the peso financings to MSMEs –in accordance with the definition contained in the rules on “Determination of micro, small or medium enterprise status”– that are granted at a nominal annual interest rate of up to 24 %, measured as the 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.

Financial institutions may not allocate for the deductions of points 1.5.4., 1.5.5. and 1.5.7. the financings disbursed as from 9.10.2020 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 in the case of medical products and/or supplies.

Version: 9th. COMMUNICATION “A” 7132
Effective date:
09/10/2020
Page 15

1.6. Specific increases in requirement due to liability concentration.

When an excessive concentration of liabilities is verified (in holders and/or terms), which implies 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 included liabilities of the financial institution and/or those complementary measures deemed pertinent.

This situation will be considered to be configured 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 term 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 entity.

1.7. Transfers.

1.7.1. Admitted margin.

The integration of the minimum cash of 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 according to rules in force 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 use is chosen in accordance with the provisions set forth above or from the first position immediately following that in which the transferred defects are offset or charges are 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.

Version: 7th. COMMUNICATION “A” 7132
Effective date:
10/10/2020
Page 16

1.8. Defect in the application of funds in foreign currency. The defect in the application of funds corresponding to deposits in foreign currency, net of cash balances at the entities, in custody at other financial institutions, in transit and at Securities Transporters (TV), determined in a month, shall be computed for an equivalent amount in the calculation of the minimum cash requirement of that same period of the respective currency.

Those originating from exchange operations ordered by the National Executive Power are excluded, and consequently may not be offset with purchases of foreign currency.

1.9. Increase in the requirement for non-compliance with the rules on “Line of credit for productive investment”.

The defect in the application of the 2013 Quota verified –as of 1.7.13 or 1.1.14, as the case may be, when it is the first tranche and 1.1.14 or 1.7.14, as the case may be, when it is the second tranche– shall be computed for an equivalent amount in the calculation of the minimum cash requirement on average in pesos, from said dates and for 24 months.

The defect in the application of the 2014 Quota verified –as of 1.7.14 or 1.1.15, as the case may be, when it is the first tranche and as of 1.1.15 or 1.7.15, as the case may be, when it is the second tranche– shall be computed for an equivalent amount in the calculation of the minimum cash requirement on average in pesos, from said dates and for 24 months.

Non-compliance with the provisions of the second paragraph of point 3.5.3.2. of the rules on “Line of credit for productive investment” (register as of 30.9.14 agreements for at least 50 % of the total amount of the second tranche of the 2014 Quota and at least 50 % to MSMEs) shall generate an increase in the minimum cash requirement on average in pesos for an equivalent amount from the day following its verification (1.10.14) for 3 months.

Non-compliance with the provisions of the third paragraph of point 3.5.4.1. of the rules on “Line of credit for productive investment” (register as of 31.3.15 agreements for at least 30 % of the total amount of the first tranche of the 2015 Quota) shall generate an increase in the minimum cash requirement on average in pesos for an equivalent amount from the day following its verification (1.4.15) for 3 months.

Non-compliance with the provisions of the third paragraph of point 3.5.4.2. of the rules on “Line of credit for productive investment” (register as of 30.9.15 agreements for at least 30 % of the total amount of the second tranche of the 2015 Quota) shall generate an increase in the minimum cash requirement on average in pesos for an equivalent amount from the day following its verification (1.10.15) for 3 months.

The defect in the application of the second tranche of the 2015 Quota verified –as of 1.4.16 or 1.7.16, as the case may be–, shall be computed for an equivalent amount in the calculation of the minimum cash requirement on average in pesos, from said dates and for 24 months.

This, without prejudice to the provisions of point 8.3. of the rules on “Line of credit for productive investment”.

Version: 5th. COMMUNICATION “A” 7132
Effective date:
10/10/2020
Page 17

MINIMUM CASH

CONSOLIDATED TEXT			SOURCE RULE					OBSERVATIONS
Sec.	Point	Parr.	Com.	Annex	Sec.	Point	Parr.
1.	1.3.8.		“A” 4360			2.		According to Com. “A” 5356 and 6616.
	1.3.9.		“A” 4754			6.		According to Com. “A” 5356, 5980, 6195, 6526, 6532, 6616 and 6728.
	1.3.10.		“A” 5945			4.		According to Com. “A” 6069, 6204 and 6616.
	1.3.11.		“A” 6341					According to Com. “A” 6616.
	1.3.12.		“A” 6069			4.		According to Com. “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 and 7054.
	1.5.6.		“A” 6993			2.		According to Com. “A” 7082.
	1.5.7.		“A” 7006			2.
	1.5.	penultimate	“A” 6858			2.		According to Com. “A” 6965, 6993 and 7006.
		last	“A” 7132
	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	sole	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.