Superintendency of Banks and Other Financial Institutions

REPUBLIC OF NICARAGUA CENTRAL AMERICA

Resolution No. CD-SIBOIF-707-1-DIC14-2011
Dated 14 December 2011

REFORM STANDARD OF ARTICLES 5, 6 and 12 OF THE STANDARD ON CONCENTRATION LIMITS OF BANCO PRODUZCAMOS

The Board of Directors of the Superintendency of Banks and Other Financial Institutions,

WHEREAS

I

That numeral 2 of article 30 of Law 640, Law Creating the Development Bank for Production (Law of Banco Produzcamos) states that the Superintendency of Banks and Other Financial Institutions must establish by standard, within 90 days after the Bank is constituted, matters relating to the determination of significant linkages and indirect manifestations of the persons indicated in numerals 1 and 4 of the aforementioned article 30;

II

That article 33 of the Law of Banco Produzcamos establishes that the Board of Directors of the Superintendency of Banks and Other Financial Institutions is empowered to issue “the special standards to regulate… the granting of credits, special supervision and other areas of regulation, of specific application for PRODUZCAMOS…”

In use of its powers,

HAS ISSUED

The following:

Resolution No. CD-SIBOIF-707-1-DIC14-2011 REFORM STANDARD OF ARTICLES 5, 6 and 12 OF THE STANDARD ON CONCENTRATION LIMITS OF BANCO PRODUZCAMOS

FIRST: Reform articles 5, 6 and 12 of the Standard on Concentration Limits of Banco Produzcamos, contained in Resolution No. CD-SIBOIF-520-1-FEB1-2008, published in La Gaceta, Official Gazette No. 45 of 04 March 2008, which must be read as follows:

Managua, Nicaragua

SIBOIF Building - Km. 7 Carretera Sur

Telephone PBX: 2265-1555 P.O. Box 788

web: www.siboif.gob.ni

Email: correo@siboif.gob.ni

Art. 5. Prohibition to grant credits.- In accordance with the provisions of numeral 1 of article 30 of the Law of Banco Produzcamos, the Bank shall not grant credits to the natural persons indicated in the aforementioned numeral. Being, such prohibition, extensive to legal persons with which the former maintain significant linkages by direct or indirect means, according to the terms of Chapter IV of this standard. For such purposes, the bank must implement methodologies to identify the natural or legal persons linked to the officials indicated in the aforementioned article, and must maintain information on the natural or legal persons linked to said officials, in accordance with the provisions of Annex 2 of the regulations that govern the matter of evaluation and classification of assets of the Bank.

Art. 6. Concentration limits.- In accordance with the provisions of numeral 4 of article 30 of the Law of Banco Produzcamos, the Bank may not carry out first and second tier credit operations with the same natural or legal person, whether individually or together with its units of interest, for an amount that exceeds 10% of the calculation base of the Bank's capital. The Bank must implement methodologies to manage such concentration risk.

Art. 12. Supply of information.- The Bank must inform the Superintendent monthly of the totals of credits granted to any natural or legal person individually or together with its units of interest, that represent more than 5% of the calculation base of the capital. The information must be reported in accordance with the detail of information required in Annex 1 attached. Said Annex and its instructions form an integral part of this standard. The Superintendent is empowered to modify them when necessary, and must inform the Board of Directors of the changes made.

SECOND: Repeal Annexes 2A and 2B of the Standard on Concentration Limits of Banco Produzcamos, contained in Resolution No. CD-SIBOIF-520-1-FEB1-2008, published in La Gaceta, Official Gazette No. 45 of 04 March 2008.

THIRD: This standard shall enter into force from its notification, without prejudice to its subsequent publication in La Gaceta, Official Gazette. (f) A. Rosales B. (f) V. Urcuyo V. (f) Gabriel Pasos Lacayo (f) Fausto Reyes B. (f) illegible (Silvio Moisés Casco Marenco) (f) U. Cerna B. Secretary.

URIEL CERNA BARQUERO
Secretary Board of Directors SIBOIF