Resolution CMN No. 63 — Authorizes Private Investment or Development Banks and Commercial Banks Authorized to Operate in Foreign Exchange to Directly Contract External Loans for On-lending to Domestic Companies

RESOLUTION NO. 000063

THE CENTRAL BANK OF BRAZIL, in accordance with the deliberation of the Monetary Council, held on August 17, 1967, in compliance with Articles 4, item V, and 9 of Law No. 4,595, of December 31, 1964, and Article 29 of Law No. 4,728, of July 14, 1965,

DECIDES:

I - To authorize private investment or development banks and commercial banks authorized to operate in foreign exchange to directly contract external loans intended to be on-lent to companies within the country, whether for financing fixed capital or working capital, observing the provisions of this Resolution and other applicable legal and regulatory norms;

II - The global liabilities of this nature shall not exceed, relative to their respective paid-in capital and free reserves, the following coefficients:

a) Private Investment or Development Banks:

1. External loans with a term of one to two years: two (2) times;

2. External loans with a term exceeding two years: two (2) times;

b) Commercial banks:

• External loans with a maximum term of up to one year: two (2) times.

III - The financial institutions referred to in this Resolution may on-lend the resources resulting from the conversion into national currency of the negotiated external loans, obligating the borrower to settlement thereof through a currency parity clause.

IV - The banks shall complete a specific form, presenting it to the Central Bank, for the purpose of verifying the compatibility of the declared interest rate with the rate prevailing in the financial market from which the loan originates.

V - Once the operation is approved, the sale of foreign currency may be effected at any bank authorized to operate in foreign exchange.

VI - The registration certificate for the loan will be issued by the Central Bank upon request accompanied by an authenticated copy of the respective foreign exchange contract, duly settled.

VII - The financial institutions referred to in item I shall forward to the Central Bank, attached to their monthly balance sheets, a detailed list of loan operations contracted during the previous month, indicating the on-lendings made with the equivalent in new cruzeiros.

Rio de Janeiro-RJ, August 21, 1967

CENTRAL BANK OF BRAZIL

Ruy Aguiar da Silva Leme
President