SUPERINTENDENCY OF BANKS, INSURANCE AND AFP
República del Perú

Lima, 18 March 2014

Resolution S.B.S. No. 1802-2014

The Superintendent of Banking, Insurance and Private Administrators of Pension Funds

CONSIDERANDO:

That, the General Law of the Financial System and the Insurance System and Organic Law of the Superintendency of Banking and Insurance – Law No. 26702 and its amending norms, hereinafter General Law, establishes in the Fifth Final and Complementary Provision that the Municipal Savings and Credit Banks (CMAC) shall be governed by the norms contained in their respective laws, except for matters related to risk weighting factors, minimum capital, effective equity, limits and provision levels, established by the General Law to guarantee public savings;

That, in accordance with the provisions of literal a) of article 5 of Supreme Decree No. 157-90-EF, a norm with the rank of law that regulates the operation of CMACs, these enterprises are authorized to grant pawn loans secured by jewelry or other objects of gold and silver;

That, as established in literal a) of article 7 of Supreme Decree No. 157-90-EF, the amount of each pawn loan granted by a CMAC must not exceed the limit of 60% of the appraisal value of the pledged asset;

That, as established in the last paragraph of Article 7 of Supreme Decree No. 157-90-EF, the percentage limits established for the granting of pawn loans may be modified by the Superintendency of Banking, Insurance and AFP in a duly reasoned Resolution, at the request of a CMAC. The request of the CMAC must be submitted through the Peruvian Federation of Municipal Savings and Credit Banks (FEPCMAC), which must also issue an opinion on the matter;

That, a CMAC, through FEPCMAC, has requested the modification of the limit referred to in literal a) of article 7 of Supreme Decree No. 157-90-EF and FEPCMAC has issued a favorable opinion regarding said request;

That, enterprises of a different nature from CMACs may grant loans with movable property security of jewelry or other objects of gold and silver by virtue of the provisions of numeral 41 of article 221 of the General Law, without such operations being subject to regulatory limits based on the value of the assets encumbered as security, for which reason it is necessary to establish similar treatment among the enterprises with respect to the granting of such loans;

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That, article 222 of the General Law establishes that in the evaluation of the operations that make up the credit portfolio, the debtor's cash flows, their income and debt service capacity, their financial situation, their net worth, their future projects and other factors relevant to determining the capacity to service and pay the debt must be taken into account; expressly stating that the basic criterion is the debtor's payment capacity and that guarantees are subsidiary;

That, the pawn loan constitutes a particular modality of credit in which the value of the jewelry or other object of gold and silver left as security is an important factor in the evaluation of the payment capacity of the applicants;

That, in the granting of consumer loans with security of cash deposits or with security of gold in ingots in custody of the lending enterprise, the value of the security is also an important factor in the evaluation of the payment capacity of the applicants;

That, by means of SBS Resolution No. 11356-2008 and its amending norms, the Regulation for the Evaluation and Classification of the Debtor and the Requirement of Provisions, hereinafter the Regulation, was approved;

That, it is necessary to incorporate into the Regulation specific provisions regarding pawn loans, consumer loans secured by cash deposits or secured by gold bullion in the custody of the lending company, which are in line with market practices and ensure that companies carry out adequate risk management;

That, in order to gather the opinions of users and the general public regarding the proposed amendments to the regulations of the Financial System, the pre-publication of the draft resolution on the matter was ordered on the Superintendency's electronic portal, under the provisions of Supreme Decree No. 001-2009-JUS;

With the approval of the Deputy Superintendencies of Banking and Microfinance, of Private Administrators of Pension Funds and Insurance, of Risks, of Economic Studies and of Legal Advice; and,

In use of the powers conferred by numerals 7 and 9 of article 349° of the General Law;

RESUELVE:

Article One.- To leave without effect the limit referred to in literal a) of article 7° of Supreme Decree No. 157-90-EF, in accordance with the power granted to this Superintendency by said Supreme Decree.

Article Two.- To modify the Regulation for the Evaluation and Classification of the Debtor and the Requirement of Provisions, approved by SBS Resolution No. 11356-2008 and its amending norms, as follows:

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1. Incorporate in numeral 2 of Chapter I the following definition:

“2. DEFINICIONES:

(…)

r. Pawn loan: modality of consumer credit granted when jewelry or other objects of gold or silver are pledged as collateral, with dispossession of the good.”

2. Modify the first paragraph of numeral 5.1 of Chapter I in accordance with the following text:

“5.1 EVALUATION CRITERIA

The granting of the credit is determined by the payment capacity of the applicant which, in turn, is fundamentally defined by their cash flow and their credit history. In the case of pledge loans or consumer loans secured by cash deposits made in the same company or secured by gold bullion in the custody of the lending company, the following must be taken into account:

a) Pledge loans secured by jewelry or gold objects: for the amount of the loan exceeding 80% of the value of the collateral, an assessment of the applicant's repayment capacity must be carried out, in accordance with the criteria applicable to retail debtors.

b) Pledge loans secured by jewelry or silver objects: for the amount of the loan exceeding 70% of the value of the collateral, an assessment of the applicant's repayment capacity must be carried out, in accordance with the criteria applicable to retail debtors.

c) Consumer loans secured by gold bullion in the custody of the lending company: for the amount of the loan exceeding 80% of the value of the collateral, an assessment of the applicant's repayment capacity must be carried out, in accordance with the criteria applicable to retail debtors.

d) Consumer loans secured by cash deposits made in the same company: for the amount of the loan exceeding 100% of the value of the collateral, an assessment of the applicant's repayment capacity must be carried out, in accordance with the criteria applicable to retail debtors.”

3. Incorporate as the last paragraph of numeral 3.9 of Chapter IV, the following text:

“In the case of pledge loans secured by jewelry or gold and silver objects, or consumer loans secured by gold bullion in the custody of the lending company, the company's valuation methodology must consider a value of gold or silver that is consistent with the international price of the troy ounce of gold or silver. The value of gold or silver may not exceed the minimum between the average value of the troy ounce of gold or silver over the last thirty (30) days and the last available closing price.”

4. Incorporate as item c) of numeral 3.12 of Chapter IV, the following:

“The following shall be considered as self-liquidating preferred collateral:

(…)

c) Gold bullion in the custody of the lending company.”

5. Incorporate as Fourth and Fifth Final and Transitory Provisions, the following text:

“FOURTH.- The Superintendency may adjust the percentages indicated in items a), b) and c) of numeral 5.1 of Chapter I of this regulation in order to adapt it to the behavior of gold and silver in the market.

FIFTH.- Those companies that have granted, before the entry into force of Resolution SBS N° 1802-2014, consumer loans secured by cash deposits made in the same company exceeding 100% of the value of the collateral, consumer loans secured by gold bullion in the custody of the lending company exceeding 80% of the value of the collateral, or pledge loans secured by jewelry or gold and silver objects exceeding 80% and 70% of the value of the collateral, respectively, shall have until 31 December 2015 to comply with the provisions on pledge loans and consumer loans secured by cash deposits made in the same company or secured by gold bullion in the custody of the lending company, approved by the aforementioned resolution.

For consumer loans secured by cash deposits made in the same company, consumer loans secured by gold bullion in the custody of the lending company, or pledge loans secured by jewelry or gold and silver objects, granted as of the entry into force of the aforementioned Resolution, the companies shall have until 31 January 2015 to comply with the provisions established in said Resolution.”

Article Three.- This Resolution shall enter into force as of the day following its publication in the Official Gazette “El Peruano”.

Register, communicate and publish.

DANIEL SCHYDLOWSKY ROSENBERG
Superintendent of Banking, Insurance and
Private Pension Fund Administrators