SBS Resolution No. 1465-2015: Amending the Regulation for the Evaluation and Classification of Debtors and the Provision Requirement, the Regulation for the Effective Equity Requirement for Credit Risk, and the Accounting Manual for Financial System Companies

Lima, February 26, 2015
S.B.S. Resolution
No. 1465-2015
The Superintendent of Banking, Insurance and
Private Pension Fund Administrators

WHEREAS:

That, through the Forty-First Final Complementary Provision of Law No. 30114, Public Sector Budget Law for Fiscal Year 2014, public sector entities are authorized to affect the single payment payroll with concepts expressly requested and authorized by the servant or retiree, linked solely to operations carried out by welfare funds and concepts and by entities supervised and/or regulated by the Superintendency of Banking, Insurance and AFP, with the exception of subjects obligated to report to the Financial Intelligence Unit (UIF) exclusively for purposes of money laundering and terrorist financing in accordance with Law No. 29038, which are applied after other legal deductions and express judicial mandate, if applicable, and must have the conformity of the General Administration Offices or their equivalents in public entities;

That, for said purpose, the aforementioned provision establishes that the servant or retiree receives at least fifty percent (50%) of their net monthly remuneration, economic compensation or pension, as applicable, providing that this percentage may be adjusted by supreme decree endorsed by the President of the Council of Ministers and the Minister of Economy and Finance, upon proposal of the National Civil Service Authority, with the opinion of the Superintendency of Banking, Insurance and AFP;

That, through Supreme Decree No. 010-2014-EF, the "Regulatory Norms for Public Entities to Carry Out and Adapt Deductions in the Single Payment Payroll" were approved, establishing provisions for public entities to adapt the deductions they currently make in the single payment payroll to said percentage, as well as the criteria, deadlines, permitted modalities for deductions and other necessary provisions for their application;

That, through SBS Resolution No. 11356-2008 and its amending norms, the Regulation for the Evaluation and Classification of the Debtor and the Provision Requirement was approved, which establishes, among other aspects, the criteria that companies must follow to determine the classification and provision of debtors comprising their loan portfolio;

That, through SBS Resolution No. 14354-2009 and its amending norms, the Regulation for the Effective Equity Requirement for Credit Risk was approved, which establishes the methodology to be applied, as well as the requirements that companies must meet to calculate the effective equity requirement for credit risk under the standard method or internal ratings-based methods;

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That, through SBS Resolution No. 895-98 and its amending and complementary norms, the Accounting Manual for Financial System Companies was approved;

That, it is necessary to amend the Regulation for the Evaluation and Classification of the Debtor and the Provision Requirement, specifying the treatment of non-revolving consumer loans that have contracts referring to payroll deduction agreements for remuneration and pensions;

That, it is necessary to amend the Accounting Manual for Financial System Companies, to adapt it to the new provisions on non-revolving consumer loans that have contracts referring to payroll deduction agreements for remuneration and pensions;

That, likewise, it is necessary to amend the Regulation for the Effective Equity Requirement for Credit Risk, adjusting the weighting factor for non-revolving consumer exposures corresponding to payroll deduction agreements for remuneration and pensions;

That, in order to gather the opinions of the general public regarding the proposed regulation, the publication of the draft resolution on the matter is 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, Risks, Economic Studies and Legal Advisory; and,

In use of the powers conferred by numerals 7, 9 and 13 of article 349 of 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;

RESOLVES:

Article One.- Amend the Regulation for the Evaluation and Classification of the Debtor and the Provision Requirement, approved by SBS Resolution No. 11356-2008 and its amending norms, as follows:

1. Eliminate the last three paragraphs of numeral 2.1 "General Treatment" of numeral 2 "Provision Rates" of Chapter III "Provision Requirement", related to non-revolving consumer loans that have contracts referring to payroll deduction agreements for remuneration.

2. Incorporate as Sixth Final and Transitory Provision, the following:

"SIXTH.- For non-revolving consumer loans with contracts referring to payroll deduction agreements for remuneration or pensions of the Public Sector that had eligible status before the entry into force of Supreme Decree No. 010-2014-EF and that were reported as such, the company may continue to constitute provisions in accordance with the percentages indicated in Table 3 of numeral 2.1 "General Treatment" of numeral 2 "Provision Rates" of Chapter III "Provision Requirement" and the procyclical provision percentage of 0.25%, until the maturity of said loans, provided that such loans are current in their payments and no contractual modifications referring to amount extension are made nor that constitute refinancings.

For non-revolving consumer loans with contracts referring to payroll deduction agreements for remuneration or pensions that are not of the Public Sector and that had eligible status before the entry into force of SBS Resolution No. 1465-2015 and that were reported as such, the company may continue to constitute provisions in accordance with the percentages indicated in Table 3 of numeral 2.1 "General Treatment" of numeral 2 "Provision Rates" of Chapter III "Provision Requirement" and the procyclical provision percentage of 0.25%, until the maturity of said loans, provided that such loans are current in their payments and no contractual modifications referring to amount extension are made nor that constitute refinancings."

3. Replace the last paragraph of numeral 2 of Chapter I "General Provisions" of Annex I "General Regime of Procyclical Provisions", with the following:

"For non-revolving consumer loans that have contracts referring to payroll deduction agreements for remuneration or pensions, and provided they are eligible, the procyclical component shall be 0.25%. For such loans to be eligible they must meet all of the following conditions:

a) The employer or the pension payer must be classified as Normal. If they do not have a credit classification, the financial system company must evaluate it and grant a classification;

b) Non-revolving consumer loans must have first payment preference through payroll deduction for remuneration or pensions. In this regard, it must be taken into account that first payment preference is determined by the age of the loans;

c) The total deduction for payment of non-revolving consumer loans that have contracts referring to payroll deduction agreements for remuneration or pensions granted by the same financial system company must not exceed 30% of the net monthly remuneration or pension after judicial and legal mandates; and,

d) Non-revolving consumer loans that have contracts referring to payroll deduction agreements for remuneration or pensions must be current in their payments and must not present contractual modifications referring to amount extension nor that constitute refinancings."

4. Replace the last paragraph of numeral 2 of Chapter II "Methodology" of Annex I "General Regime of Procyclical Provisions", with the following:

"In the case of loans that have self-liquidating preferred guarantees, companies will have 4 months to constitute procyclical provisions, and must constitute no less than 50% of the required procyclical component by the second month and the entirety by the fourth month. On the other hand, for non-revolving consumer loans that have contracts referring to payroll deduction agreements for remuneration or pensions, and that are eligible, they must constitute the total procyclical provisions no later than month 2."

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Article Two.- Amend the Regulation for the Effective Equity Requirement for Credit Risk, approved by SBS Resolution No. 14354-2009 and its amending norms, as follows:

1. Amend the second paragraph of article 20, as follows:

"Non-revolving consumer exposures correspond to the weighting factors indicated below, according to their residual maturity:"

Non-Revolving Consumer Exposures

Residual Maturity	Up to 4 years	More than 4 up to 5 years	More than 5 years
Non-revolving loans with payroll deduction agreements	100%	150%	250%
Non-revolving automobile loans	100%	100%	250%
Other non-revolving consumer exposures	100%	150%	250%

2. In article 20, as well as in the Ninth Final Provision, change all references to "Revolving payroll deduction agreement" to the following: "Revolving loans with payroll deduction agreements".

3. Amend the first paragraph of the Ninth Final Provision, as follows:

"Ninth.- For non-revolving consumer exposures recorded accounting-wise up to December 31, 2012, companies will have until December 31, 2015 to constitute the effective equity requirement for credit risk resulting from the application of the weighting factors contemplated in SBS Resolution No. 1465-2015."

Article Three.- Amend the Accounting Manual for Financial System Companies, approved by Resolution No. 895-98 and its amending and complementary norms, hereinafter Accounting Manual, as follows:

1. Amend Chapters III "Chart of Accounts" and IV "Description and Dynamics of Accounts" of the Accounting Manual, in accordance with the following:

a) Incorporate as description of analytical subaccount 1401.03.06.01 "Revolving loans", the following:

"In this analytical subaccount, revolving consumer loans other than loans with payroll deduction agreements are recorded."

b) Incorporate as description of analytical subaccount 1401.03.06.04 "Non-revolving loans granted under eligible agreements", the following:

"In this analytical subaccount, non-revolving consumer loans with payroll deduction agreements for remuneration or pensions of the Public Sector, which had eligible status before the entry into force of S.D. No. 010-2014-EF, are recorded, provided they are current in their payments and no contractual modifications referring to amount extension are made nor that constitute refinancings. When the aforementioned loans cease to be current in their payments or contractual modifications referring to amount extension are made or that constitute refinancings, they will be reclassified to non-revolving consumer loans granted under non-eligible agreements (analytical subaccount 1401.03.06.05).

Likewise, in this analytical subaccount, non-revolving consumer loans with payroll deduction agreements for remuneration or pensions that are not of the Public Sector and that had eligible status before the entry into force of SBS Resolution No. 1465-2015 are recorded, provided they are current in their payments and no contractual modifications referring to amount extension are made nor that constitute refinancings. When the aforementioned loans cease to be current in their payments or contractual modifications referring to amount extension are made or that constitute refinancings, they will be reclassified to non-revolving consumer loans granted under non-eligible agreements (analytical subaccount 1401.03.06.05)."

c) Incorporate as description of analytical subaccount 1401.03.06.05 "Non-revolving loans granted under non-eligible agreements", the following:

"In this analytical subaccount, non-revolving consumer loans with payroll deduction agreements for remuneration or pensions of the Public Sector, which did not have eligible status before the entry into force of S.D. No. 010-2014-EF, are recorded. Likewise, in this analytical subaccount, non-revolving consumer loans with payroll deduction agreements for remuneration or pensions of the Public Sector, which had eligible status before the entry into force of S.D. No. 010-2014-EF, but that are not current in their payments or contractual modifications referring to amount extension have been made or that constitute refinancings, are recorded.

On the other hand, in this analytical subaccount, non-revolving consumer loans with payroll deduction agreements for remuneration or pensions that are not of the Public Sector and that did not have eligible status before the entry into force of SBS Resolution No. 1465-2015 are also recorded. Likewise, in this analytical subaccount, non-revolving consumer loans with payroll deduction agreements for remuneration or pensions that are not of the Public Sector, which had eligible status before the entry into force of SBS Resolution No. 1465-2015, but that are not current in their payments or contractual modifications referring to amount extension have been made or that constitute refinancings, are recorded."

d) Replace the denomination and description of analytical subaccount 1401.03.06.06, with the following:

"1401.03.06.06 Revolving loans with payroll deduction agreements

In this analytical subaccount, revolving consumer loans with payroll deduction agreements for remuneration or pensions are recorded."

e) Incorporate analytical subaccount 1401.03.06.19 "Other non-revolving loans" and its description, in the following terms:

"In this analytical subaccount, non-revolving consumer loans other than those contemplated in the previous analytical subaccounts are recorded."

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f) Eliminate analytical subaccount 1401.03.06.09, whose balance will be reclassified into analytical subaccount 1401.03.06.19, as applicable.

g) Incorporate the following analytical subaccounts and their description:

1401.03.06.11 Non-revolving loans with payroll deduction agreements that are eligible

In this analytical subaccount, non-revolving consumer loans granted from the entry into force of S.D. No. 010-2014-EF, which have payroll deduction agreements for remuneration or pensions of the Public Sector, and that are eligible, are recorded. Likewise, in this analytical subaccount, non-revolving consumer loans granted from the entry into force of SBS Resolution No. 1465-2015, which have payroll deduction agreements for remuneration or pensions that are not of the Public Sector, and that are eligible, are recorded.

1401.03.06.12 Non-revolving loans with payroll deduction agreements that are not eligible

In this analytical subaccount, non-revolving consumer loans granted from the entry into force of S.D. No. 010-2014-EF, which have payroll deduction agreements for remuneration or pensions of the Public Sector, and that are not eligible, are recorded. Likewise, non-revolving consumer loans granted from the entry into force of SBS Resolution No. 1465-2015, which have payroll deduction agreements for remuneration or pensions that are not of the Public Sector, and that are not eligible, are recorded.

1404.03.06.12 Non-revolving loans with payroll deduction agreements that are not eligible

1405.03.06.12 Non-revolving loans with payroll deduction agreements that are not eligible

1406.03.06.12 Non-revolving loans with payroll deduction agreements that are not eligible

h) Incorporate analytical subaccounts 1404.03.06.19 "Other non-revolving loans", 1405.03.06.19 "Other non-revolving loans" and 1406.03.06.19 "Other non-revolving loans".

i) Eliminate analytical subaccounts 1404.03.06.04, 1405.03.06.04 and 1406.03.06.04.

j) Eliminate analytical subaccount 1404.03.06.09, whose balance will be reclassified into analytical subaccount 1404.03.06.19, as applicable.

k) Eliminate analytical subaccount 1405.03.06.09, whose balance will be reclassified into analytical subaccount 1405.03.06.19, as applicable.

l) Eliminate analytical subaccount 1406.03.06.09, whose balance will be reclassified into analytical subaccount 1406.03.06.19, as applicable.

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2. Amend Chapter V "Complementary Information" of the Accounting Manual, as follows:

a) Incorporate the following analytical subaccounts in the "Chart of accounts considered in the Debtor Credit Report":

1401.03.06.11 Non-revolving loans with payroll deduction agreements that are eligible

1401.03.06.12 Non-revolving loans with payroll deduction agreements that are not eligible

1404.03.06.12 Non-revolving loans with payroll deduction agreements that are not eligible

1405.03.06.12 Non-revolving loans with payroll deduction agreements that are not eligible

1406.03.06.12 Non-revolving loans with payroll deduction agreements that are not eligible

1401.03.06.19 Other non-revolving loans

1404.03.06.19 Other non-revolving loans

1405.03.06.19 Other non-revolving loans

1406.03.06.19 Other non-revolving loans

b) Eliminate the following analytical subaccounts in the "Chart of accounts considered in the Debtor Credit Report":

1401.03.06.09 Other non-revolving loans

1404.03.06.09 Other non-revolving loans

1405.03.06.09 Other non-revolving loans

1406.03.06.09 Other non-revolving loans

1404.03.06.04 Non-revolving loans granted under eligible agreements

1405.03.06.04 Non-revolving loans granted under eligible agreements

1406.03.06.04 Non-revolving loans granted under eligible agreements

c) Amend Annexes No. 5 "Debtor Classification and Provisions Report", No. 5-A "Summary of Procyclical Provisions", No. 5-C "Classification Report of the Portfolio Transferred in Trust" and No. 5-C' "Summary of Procyclical Provisions for the Portfolio Transferred in Trust", in accordance with the formats attached to this Resolution that are published on the Institutional Portal (www.sbs.gob.pe), as provided in Supreme Decree No. 001-2009-JUS.

d) Amend methodological note No. 7 of Annex No. 5, as follows:

"7.- Indicate, in section D', the portion of non-revolving consumer loans granted under payroll deduction agreements for remuneration or pensions of the Public Sector that had eligible status before the entry into force of S.D. No. 010-2014-EF. Likewise, indicate the portion of non-revolving consumer loans granted under payroll deduction agreements for remuneration or pensions that are not of the Public Sector and that had eligible status before the entry into force of SBS Resolution No. 1465-2015. The loans recorded here must be current in their payments and cannot be subject to contractual modifications referring to amount extension nor that constitute refinancings.

Indicate, in section D'', the portion of eligible non-revolving consumer loans that have payroll deduction agreements for remuneration or pensions of the Public Sector and that have been granted from the entry into force of S.D. No. 010-2014-EF. Likewise, indicate the portion of eligible non-revolving consumer loans that have payroll deduction agreements for remuneration or pensions that are not of the Public Sector and that have been granted from the entry into force of SBS Resolution No. 1465-2015."

e) Amend methodological note No. 7 of Annex No. 5-C, as follows:

"7.- Indicate, in section D', the portion of non-revolving consumer loans granted under payroll deduction agreements for remuneration or pensions of the Public Sector that had eligible status before the entry into force of S.D. No. 010-2014-EF. Likewise, indicate the portion of non-revolving consumer loans granted under payroll deduction agreements for remuneration or pensions that are not of the Public Sector and that had eligible status before the entry into force of SBS Resolution No. 1465-2015. The loans recorded here must be current in their payments and cannot be subject to contractual modifications referring to amount extension nor that constitute refinancings.

Indicate, in section D'', the portion of eligible non-revolving consumer loans that have payroll deduction agreements for remuneration or pensions of the Public Sector and that have been granted from the entry into force of S.D. No. 010-2014-EF. Likewise, indicate the portion of eligible non-revolving consumer loans that have payroll deduction agreements for remuneration or pensions that are not of the Public Sector and that have been granted from the entry into force of SBS Resolution No. 1465-2015."

Article Four.- This norm enters into force as of May 1, 2015, except for the provisions of Article Three, which enters into force for the presentation of information corresponding to the month of May 2015.

Register, communicate and publish

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