Resolution CMN No. 2668 — Amends Resolution No. 2,653 of 1999 Establishing Rules for Credit Contingency to the Public Sector

RESOLUTION NO. 002668

Amends Resolution No. 2,653, of 1999, which establishes the rules for the contingency of credit to the public sector.

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 November 25, 1999, considering the provisions of Article 4, items VI and VIII, of the aforementioned Law, Laws No. 4,728, of July 14, 1965, and 6,385, of December 7, 1976, Decree-Laws No. 1,986, of December 28, 1982, and 2,285, of July 23, 1986, Article 28 of Decree-Law No. 73, of November 21, 1966, Article 4 of Decree-Law No. 261, of February 28, 1967, and Articles 15 and 40 of Law No. 6,435, of July 15, 1977,

RESOLVES:

Article 1. Amend Resolution No. 2,653, of September 23, 1999, which shall henceforth read as follows:

"Article 1. Limit the amount of credit operations of each institution of the National Financial System with public sector bodies and entities to 45% (forty-five percent) of the adjusted net worth in accordance with current regulations (ANW).

Sole Paragraph 1. For the purposes of this Resolution, public sector bodies and entities are understood to be:

I - the direct administration of the Union, the States, the Federal District, and the Municipalities;

II - the autarchies and foundations established or maintained, directly or indirectly, by the Union, the States, the Federal District, and the Municipalities;

III - the non-financial public companies and mixed-capital societies, their subsidiaries, and other companies controlled, directly or indirectly, by the Union, the States, the Federal District, and the Municipalities, including exclusive-object societies; and

IV - other bodies or entities of the powers of the Union, the States, the Federal District, and the Municipalities.

Sole Paragraph 2. For the purposes of this Resolution, credit operations are understood to be:

I - loans and financing;

II - leasing operations;

III - the definitive acquisition or carried out through committed operations of resale of securities issued by the States, the Federal District, or the Municipalities, as well as by the public sector bodies and entities mentioned in item III of paragraph 1 of this article; and

IV - the granting of guarantees of any nature;

V - any and all operations that result, directly or indirectly, in the granting of credit and/or raising of resources of any nature, including the use of financial derivatives.

Article 2. Institutions of the National Financial System may only contract new credit operations with the States, the Federal District, and the Municipalities, as well as their autarchies and foundations, if these observe, cumulatively, the following limits and conditions:

I - the global amount of credit operations, as defined in Article 1, may not, in each financial year, exceed 18% (eighteen percent) of the Real Net Revenue, observing the limit of 8% (eight percent) of the Real Net Revenue for budget revenue anticipation operations - ARO;

II - the maximum annual expenditure with amortizations, interest, and other charges of all credit operations, already contracted and to be contracted, including those originating from renegotiated or installment debts, plus, furthermore, the due, overdue, and unpaid value, may not exceed 13% (thirteen percent) of the Real Net Revenue;

III - the total debt balance may not exceed a value equivalent to one and nine-tenths of the annual Real Net Revenue for 1999, decreasing this ratio by one-tenth per year, until reaching a value equivalent to the annual Real Net Revenue; and

IV - Positive Primary Result calculated over the previous twelve months.

Sole Paragraph. The Central Bank of Brazil is tasked with publishing the methodology to be used for the calculation of the Primary Result and the Real Net Revenue.

Article 3. Institutions of the National Financial System may only contract new credit operations with non-financial public companies and mixed-capital societies, controlled directly or indirectly, by the States, the Federal District, and the Municipalities, if the controlling entity observes the limits and conditions defined in the previous article.

Article 4. For the purpose of carrying out new credit operations, under the terms of this Resolution, institutions of the National Financial System must be within the operational limits established by current regulations.

Article 5. Institutions of the National Financial System are prohibited from:

I - carrying out credit operations with public sector bodies and entities that are delinquent with institutions of the National Financial System;

II - contracting new operations with public sector bodies and entities if they have pending registration in the System for Registration of Operations with the Public Sector - CADIP;

III - receiving, in any modality of credit operations, as principal or accessory guarantee, promissory notes, trade acceptances, bills of exchange, or other instruments of the kind, as well as letters of credit, sureties, and guarantees of direct or indirect responsibility of public sector bodies and entities, corresponding to commitments assumed with suppliers, construction contractors, or service providers; and

IV - carrying out any type of operation that implies the transfer, under any title, of the direct or indirect responsibility for the payment of the debt to public sector bodies or entities.

Sole Paragraph. The prohibition provided for in item III does not apply to operations contracted by public companies or by mixed-capital societies controlled directly or indirectly by the Union, the States, the Federal District, and the Municipalities, nor to operations formally and exclusively guaranteed by trade acceptances for the sale of goods or provision of services drawn against the entities defined in item III of paragraph 1 of Article 1.

Article 6. An institution of the National Financial System that presents, on the date of this Resolution, a ratio between the amount of credit operations and the adjusted net worth in accordance with current regulations (ANW) superior to 45% (forty-five percent):

I - may maintain current credit operations, including scheduled disbursements, provided that the charges incident on these operations are paid on their respective due dates;

II - may not carry out new credit operations with public sector bodies and entities until the ratio referred to in the "caput" reaches a percentage equal to or lower than 45% (forty-five percent);

III - may not acquire credit operations, with or without co-obligation, from other institutions of the National Financial System whose borrower is a public sector body or entity; and

IV - may not cede credit operations with co-obligation, whose borrower is a public sector body or entity.

Sole Paragraph. The institution of the National Financial System that fails to comply with the provisions of this article is subject to the penalties provided for in Article 8.

Article 7. The global value of new credit operations carried out under the auspices of this Resolution shall be up to R$600,000,000.00 (six hundred million reais).

Paragraph 1. The following credit operations of institutions of the National Financial System contracted with the bodies and entities mentioned in item III of paragraph 1 of Article 1 are not included in the global value:

I - those formally and exclusively guaranteed by trade acceptances for the sale of goods or provision of services, issued by the credit beneficiary itself; and

II - operations supporting exports.

Paragraph 2. Also not included in the global value referred to in the "caput" are operations formally and exclusively guaranteed by trade acceptances for the sale of goods or provision of services drawn against the entities defined in item III of paragraph 1 of Article 1, although they must be computed for the purpose of the limit provided for in Article 1.

Article 8. An institution of the National Financial System that contracts a credit operation in disagreement with this Resolution must deposit with the Central Bank of Brazil, by the fifth business day following the notification of the irregularity, the value corresponding to the irregularly contracted credit, updated by the respective contractual rate until the date of deposit, independent of other administrative measures.

Paragraph 1. In the case of new credit contracting or maturity of charges that infringe the limit established in Article 1, the value corresponding to the excess shall be deposited.

Paragraph 2. The value deposited into the Bank Reserves account will not be subject to any remuneration, remaining unavailable and unchanged for a period equivalent to that during which the irregularity remains.

Paragraph 3. An institution of the National Financial System that does not possess a Bank Reserves account must enter into an agreement with a financial institution for this purpose, such agreement not being denounceable by any of the parties without prior authorization from the Central Bank of Brazil.

Article 9. The contracting of new credit operations, under the auspices of this Resolution, will depend on prior authorization from the Central Bank of Brazil, which is responsible for publishing the eligibility criteria.

Sole Paragraph. The Central Bank of Brazil will make available monthly, via the Central Bank Information System - SISBACEN, the accumulated value of the authorized credit operations referred to in Article 7.

Article 10. For the purposes of this Resolution:

a) institutions of the National Financial System must consolidate operations carried out through their directly or indirectly controlled companies;

b) a public sector body or entity is considered delinquent if it presents debts, total or partially, overdue for a period exceeding thirty days.

Article 11. The System for Registration of Operations with the Public Sector - CADIP is maintained.

Article 12. The Central Bank of Brazil may adopt the measures and issue the norms necessary for the compliance with the provisions of this Resolution.

Article 13. Resolutions No. 2,366, of March 17, 1997, 2,443, of November 14, 1997, 2,461, of December 26, 1997, 2,521, of July 8, 1998, 2,553, of September 24, 1998, 2,559 and 2,562, both of November 5, 1998, are hereby revoked.

Article 14. This Resolution enters into force on the date of its publication."

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

Brasília, November 25, 1999

Arminio Fraga Neto
President