SBS Resolution No. 1169-2007: Establishing exceptional measures for the treatment of loans granted by financial system companies to debtors domiciled in areas affected by the earthquake of August 15, 2007

Lima, August 22, 2007

S.B.S. Resolution No. 1169-2007

The Superintendent of Banking, Insurance and Private Pension Fund Administrators:

WHEREAS:

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 amendments, hereinafter the General Law, establishes in its article 133 that companies that carry out operations subject to credit risk shall make, charged to results, the necessary generic or specific provisions, according to the credit classification, in accordance with the general application regulations issued by this Superintendency;

That, by SBS Resolution No. 808-2003 of May 28, 2003 and its amending rules, the Regulation for the Evaluation and Classification of the Debtor and the Requirement of Provisions was approved;

That, by SBS Resolution No. 895-98 of September 1, 1998 and amending and complementary rules, the Accounting Manual for Financial System Companies was approved;

That, given the situation generated by the earthquake that occurred on August 15, 2007, which has impacted the Department of Ica, the Province of Cañete, the districts of Huañec and Tupe of the province of Yauyos of the Department of Lima, the provinces of Castrovirreyna, Huaytará and the district of Acobambilla of the province of Huancavelica of the Department of Huancavelica, declared in a state of emergency by Supreme Decrees No. 068-2007-PCM and No. 071-2007-PCM, it is necessary to establish exceptional measures for the treatment of loans that financial system companies have granted to debtors domiciled in said areas and that they decide to reschedule;

Having heard the opinion of the Deputy Superintendencies of Banking and Microfinance, Legal Advisory and Risks, as well as the Economic Studies Management; and,

In use of the powers conferred by numerals 9 and 13 of article 349 of the General Law;

RESOLVES:

Article One.- Financial system companies that grant payment facilities to debtors domiciled in the Department of Ica, the Province of Cañete, the districts of Huañec and Tupe of the province of Yauyos of the Department of Lima, the provinces of Castrovirreyna, Huaytará and the district of Acobambilla of the province of Huancavelica of the Department of Huancavelica that, as of July 31, 2007, had been in the classifications of Normal or With Potential Problems and provided that the total term of the loan does not extend for more than seven (7) months with respect to the original term, may subject themselves to the following rules:

1.- Maintain the classification of the debtor and the accounting record of the loans in the situation they had as of July 31, 2007.

2.- The yields generated by these loans must be recorded in accordance with the criteria established in the last paragraph of numeral 2.3 of chapter IV of the Regulation for the Evaluation and Classification of the Debtor and the Requirement of Provisions approved by Resolution No. 808-2003.

The provisions of this article shall be in force until March 31, 2008. From April 1, 2008, the loans and their yields, as well as the classification of the debtors, must be recorded following the criteria of the Regulation for the Evaluation and Classification of the Debtor and the Requirement of Provisions, approved by SBS Resolution No. 808-2003, and the Accounting Manual for Financial System Companies, based on the payment behavior of the new schedule.

Article Two.- Financial system companies must monitor the debtors subject to this exceptional treatment, in order to be aware of the situation of their loans once the term provided in the preceding article has ended, and keep the corresponding information available to this Superintendency.

Article Three.- Chapters III and IV of the Accounting Manual for Financial System Companies approved by SBS Resolution No. 895-98 and its amending and complementary rules are amended in the following terms:

1. Incorporate in account 14 "Loans", account 1407 "Reprogrammed Earthquake Loans", as well as subaccounts 1407.01, 1407.03, 1407.04 and 1407.05, named "current loans", "restructured loans", "refinanced loans" and "past-due loans", respectively, and analytical accounts must be incorporated in greater detail to identify the types of loans (commercial, MES, consumer and mortgage for housing).

2. Incorporate as the description of account 1407 "Reprogrammed Earthquake Loans", the following:

"In this account are recorded the loans granted by financial system companies to debtors domiciled in the Department of Ica, the Province of Cañete, the districts of Huañec and Tupe of the province of Yauyos of the Department of Lima, the provinces of Castrovirreyna, Huaytará and the district of Acobambilla of the province of Huancavelica of the Department of Huancavelica, whose maturities have been rescheduled.

3. Incorporate in account 8109 "Other Debit Memorandum Accounts", subaccount 8109.26 "Reprogrammed Earthquake Loans".

4. Incorporate as the description of subaccount 8109.26 "Reprogrammed Earthquake Loans", the following:

"In this subaccount are recorded the loans granted by financial system companies to debtors domiciled in the Department of Ica, the Province of Cañete, the districts of Huañec and Tupe of the province of Yauyos of the Department of Lima, the provinces of Castrovirreyna, Huaytará and the district of Acobambilla of the province of Huancavelica of the Department of Huancavelica, whose maturities have been rescheduled. This record shall be made without prejudice to the accounting of the loans in the corresponding accounts of item 14 "Loans".

Article Four.- This Resolution enters into force as of the day following its publication in the Official Gazette "El Peruano", except for the provisions of article three and the information corresponding to Annex No. 6 "Credit Report of Debtors-RCD", which shall enter into force as of the information corresponding to the month of September.

Register, communicate and publish.

FELIPE TAM FOX
Superintendent of Banking, Insurance and Private Pension Fund Administrators