Resolution CMN No. 1366 - Financial Support Program for States and Municipalities - Creation of Credit Lines under Law 7614 of July 14, 1987

RESOLUTION NO. 001366

THE CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595 of December 31, 1964, makes public that the MONETARY COUNCIL, in a session held on this date, considering the provisions of Article 4, items VI and VIII of the aforementioned Law,

RESOLVES:

I - To amend item "c" of item I and item X of Resolution No. 346 of November 13, 1975, which shall henceforth read as follows:

"I - ...

c) the value of the loan plus the total value of operations of the same kind contracted by the same borrower with financial institutions may not exceed 25% (twenty-five percent) of the revenue to be realized in the fiscal year, deducting from this the amount allocated in the Budget Law for credit operations;".

"X - non-compliance with the norm embodied in this Resolution shall be considered a serious offense, exposing financial institutions to the sanctions provided for in current legislation, and, in particular, to the deposit in currency with the Central Bank, in an amount equivalent to 25% (twenty-five percent) of the outstanding balance of the new operation contracted irregularly, such that such deposit shall not be subject to any remuneration and shall remain frozen for the number of days comprised between the date of contracting and the settlement of the operation.".

II - The realization of budget revenue anticipation operations with States and Municipalities shall depend on prior verification of their respective debt limits by the Public Debt and Open Market Directorate of the Central Bank.

III - The Central Bank may adopt the measures deemed necessary for the execution of this Resolution.

IV - This Resolution shall enter into force on the date of its publication.

Brasília-DF, July 30, 1987

Fernando Milliet de Oliveira
President