Resolution CMN No. 2562 — Redefines rules for public sector credit contingency and establishes limits for operations

RESOLUTION NO. 002562

Redefines rules for the contingency of credit to the public sector and establishes limits for the realization of operations.

THE CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595 of December 31, 1964, makes public that the NATIONAL MONETARY COUNCIL, in a session held on November 5, 1998, considering the provisions of Article 4, items VI and VIII, of the aforementioned Law,

HAS RESOLVED:

Article 1. Include item XII in Article 4 of Resolution No. 2,461 of December 26, 1997, with the following wording:

"XII - credit operations carried out by States and Municipalities, within the scope of programs of official credit and development financial institutions, directly or through their financial agents, which have as their object exclusively the financing for:

a) modernization of public administration and fiscal, financial, and patrimonial tax management, according to programming approved and supervised by the Fiscal Control and Management Commission - CCF, established through Decree No. 2,773 of September 8, 1998;

b) hiring of specialized consultancies aiming at the privatization of water supply and/or sanitation services, up to the limit of R$60 million, being R$30 million through Caixa Econômica Federal and R$30 million by BNDES.

Sole Paragraph. The partial or full concession contracts for water and sewage services must state that payments of loans made based on item 'b' will be assumed by the winning companies of the respective bids. In the case of privatization of sanitation companies, those loans will be liquidated upon the auction of the controlling share of the company."

Article 2. This Resolution enters into force on the date of its publication.

Brasília, November 5, 1998

Gustavo H. B. Franco
President

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Note: Re-transmitted due to an error in Article 1