Technical Standards for Liquidity Risk Management of Financial Entities

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-09/2012
NRP-05
TECHNICAL STANDARDS FOR LIQUIDITY RISK MANAGEMENT OF FINANCIAL ENTITIES Approval: 08/21/2012 Validity: 10/01/2012

THE COMMITTEE ON STANDARDS OF THE CENTRAL BANK OF RESERVE OF EL SALVADOR,

CONSIDERING:

I. That Article 3, subsection c) of the Law on Supervision and Regulation of the Financial System, establishes that it is the competence of the Superintendency of the Financial System to proactively monitor the risks of the members of the financial system and the manner in which they manage them, ensuring the prudent maintenance of their solvency and liquidity.

II. That Article 35, subsection d) of the Law on Supervision and Regulation of the Financial System, establishes that supervised entities must comply with the adoption and updating of policies and mechanisms for risk management, including among other actions, identifying, evaluating, mitigating, and disclosing them in accordance with international best practices.

III. That Articles 63 of the Banks Law, 41 of the Cooperative Banks and Savings and Credit Societies Law, and 44 of the Investment Banks Law, establish that banks, cooperative banks, and Investment Banks must elaborate and implement policies and control systems that allow them to adequately manage their financial and operational risks; considering, among other things, provisions regarding management, destination, and diversification of credit and investments and the administration of their liquidity. (4)

IV. That the situation traversed by international financial markets and its impact on the real sector of economies worldwide makes it necessary for members of the financial system to comply with prudential regulations, good risk management practices, and good corporate governance that contribute to the proper functioning of the entities.

THEREFORE,

in virtue of the regulatory powers conferred by Article 99 of the Law on Supervision and Regulation of the Financial System,

AGREES to issue the following:

TECHNICAL STANDARDS FOR LIQUIDITY RISK MANAGEMENT OF FINANCIAL ENTITIES (5)

CHAPTER I
OBJECT, SUBJECTS, AND TERMS

Object
Art. 1.- These Standards aim to establish minimum guidelines for liquidity risk management and criteria for the adoption of policies and procedures related to the development of methodologies, in accordance with the nature, size, risk profile of the entities, and volume of their operations. These Standards complement the provisions established in the "Technical Standards for Integrated Risk Management of Financial Entities" (NRP-20), the "Technical Standards on Corporate Governance" (NRP-17), and the "Technical Standards for Integrated Risk Management and Information Transparency of Investment Banks" (NRP-93), issued by the Central Bank of Reserve of El Salvador through its Committee on Standards. (3) (4) (5)

Subjects
Art. 2.- The subjects obligated to comply with the provisions established in these Standards are:
a) Banks constituted in El Salvador, their offices abroad, and their subsidiaries; b) Branches of foreign banks established in the country, insofar as pertinent; c) Cooperative banks, savings and credit societies, and federations regulated by the Cooperative Banks and Savings and Credit Societies Law; (5) d) The Mortgage Bank of El Salvador, S.A.; e) The Agricultural Development Bank, insofar as it does not contradict its creation law nor what is provided by the Court of Accounts; (4) f) The Development Bank of the Republic of El Salvador, insofar as it does not contradict its creation law nor what is provided by the Court of Accounts; and (4) g) Investment Banks, their offices abroad, and their subsidiaries. (4)

Terms
Art. 3.- For the purposes of these Standards, the terms indicated below have the following meaning:
a) High-Quality Liquid Assets (HQLA): Those assets that are cash or can be easily and immediately converted into cash with little or no loss of value, and are free of encumbrances; (5) b) Liquidity Coverage Ratio: A measure that requires maintaining a sufficient amount of high-quality liquid assets to cover net cash outflows during a 30-day stress period; (5) c) Net Stable Funding Ratio: The ratio between the amount of available stable funding and the amount of required stable funding. Available stable funding is defined as the proportion of own and borrowed resources that can be expected to be reliable during a one-year time horizon. The amount of required stable funding for a specific institution is a function of the liquidity characteristics and residual maturities of its various assets and off-balance sheet positions; (5) d) Crisis: Period or situation of difficulties or abrupt and unusual changes that affect the operations of the entity and the environment in which it participates; (5) e) Entity or entities: Subjects obligated to comply with these Standards; (5) f) Liquidity risk management: The process of identifying, measuring, controlling, mitigating, monitoring, and disclosing liquidity risk, which must be carried out in accordance with the objectives, policies, procedures, and actions established by the entity for this purpose; (5) g) Liquidity: The capacity an entity has to meet all obligations in a timely manner, at a reasonable cost; (5) h) Stress tests: Exercises or simulations based on scenarios used to evaluate the resilience and stability of an entity or financial system to extreme events; (5) i) Liquidity risk: The possibility of incurring losses due to not having sufficient resources to meet assumed obligations, incurring excessive costs, and being unable to develop business under the planned conditions; and (5) j) Superintendency: Superintendency of the Financial System. (5)

CHAPTER II
ENVIRONMENT FOR LIQUIDITY RISK MANAGEMENT

Organizational System
Art. 4.- Entities must establish an organizational or functional structure appropriate to their business model and appropriately segregated, which clearly delimits functions and responsibilities, as well as the levels of dependence and interrelation corresponding to each of the areas involved in liquidity risk management, in accordance with the risk profile, size, and nature of their operations.

Board of Directors Functions
Art. 5.- The Board of Directors is responsible for ensuring adequate liquidity risk management, and therefore will have at least the following responsibilities:
a) Approve minimum liquidity levels based on business objectives and strategy, volume of operations, nature, size, and assumed risk profile; b) Approve the policy, strategy, manual, and monitoring tools for liquidity risk management, scenarios, and modifications to stress tests, contingency plans, and ensure that established liquidity levels are sufficient relative to assumed obligations;

c) Approve the necessary resources to implement and maintain liquidity risk management in an effective and efficient manner; and d) Ensure that the internal audit unit verifies compliance with the liquidity risk management process.

Risk Committee Functions
Art. 6.- The Risk Committee must perform the following functions:
a) Evaluate, review, and propose for Board of Directors approval the policy, strategy, manual, tools, parameters, and scenarios with the assumptions or premises that will be used for measuring and controlling liquidity risk, the contingency plan, and the information system for liquidity risk management; b) Approve the risk management methodology and make it known to the Board of Directors; c) Report to the Board of Directors at least quarterly on the entity's exposure to liquidity risk, substantial changes in such exposure, its evolution over time, the main corrective measures adopted, compliance with limits, the results of stress tests, and any other aspect related to approved policies and procedures; d) Ensure that liquidity risk management is effective and that risk events are consistently identified, measured, mitigated, and monitored; and e) Ensure that corrective actions required in case of deviations from the assumed liquidity risk tolerance level are implemented.

Senior Management
Art. 7.- Senior Management is responsible for allocating resources and ensuring that liquidity risk management is implemented adequately.

Risk Unit
Art. 8.- The Risk Unit is in charge of implementing liquidity risk management, and therefore must perform the following functions: (5) a) Elaborate and propose to the Risk Committee the policy, strategy, manual, methodology, contingency plan, and information system for liquidity risk management; b) Elaborate and propose to the Risk Committee the measurement tools, parameters, and scenarios with the assumptions or premises that will be used for measuring and controlling liquidity risk, including the development of stress tests; c) Monitor compliance with liquidity risk exposure limits and report to the Risk Committee;

d) Measure and control liquidity risks, according to approved methodologies, and report results to the Risk Committee; e) Periodically follow up on corrective actions presented by the risk unit for the improvement of liquidity risk management; and f) Periodically report to the Risk Committee on the evolution of liquidity risks assumed by the entity.

Internal Audit
Art. 9.- Internal audit must periodically evaluate the effectiveness and efficiency of the liquidity risk management framework designed by the Risk Unit.

Liquidity Risk Management Policy
Art. 10.- Entities must have a policy that clearly develops the strategy for adequate liquidity risk management, designed in accordance with the entity's characteristics and its position within the financial system, which must be approved by the Board of Directors to ensure that, at all times and under different normal or crisis scenarios, there are liquidity sources and sufficient resources to guarantee the continuity of operations. This policy must respond to the complexity and volume of operations characterizing the business model and the risk profile assumed by the entity, so that adequate management of assets, liabilities, and off-balance sheet operations is achieved, taking into account a balance between risk and profitability. The policy must consider at least the following:
a) Establish minimum liquidity levels, concentration limits, and liquidity risk exposure limits; b) Establish specific guidelines for obtaining and diversifying funding sources; c) Establish early warning indicators that allow identifying exposure to liquidity risk; d) Establish mechanisms for implementing corrective actions required in case of deviations or exceptions regarding the assumed liquidity risk level; and e) Establish a level of high-quality liquid assets free of any encumbrance, to be used in the face of a series of liquidity stresses.

Liquidity Risk Management Manual.
Art. 11.- Entities must have a liquidity risk management manual that groups the policy, functions, and responsibilities of involved areas, the methodology, associated processes, and the periodicity with which the Risk Committee, Board of Directors, and Senior Management must be informed about exposure to said risk.

CHAPTER III
LIQUIDITY RISK MANAGEMENT

Stages of the Management Process
Art. 12.- For liquidity risk management, entities must have a continuous and documented process to identify, measure, control, and mitigate, monitor, and communicate liquidity risk, which must include a robust framework that offers a complete projection of the liquidity position.

Identification
Art. 13.- Entities must identify internal and external factors that may impact their liquidity, and therefore must have tools that allow adequate identification of this risk. Entities must identify the main factors affecting their ability to attract funds or obtain resources, monitoring them closely to ensure the validity of estimates for obtaining financing. Additionally, they must identify clients that will affect the entity's liquidity position.

Measurement
Art. 14.- Entities must quantify liquidity risk in order to determine compliance or adequacy of policies, established limits, and measure the possible economic impact on financial results. Entities must possess measurement tools to determine exposure to liquidity risk in the short, medium, and long term, taking into account liquidity sources, volatility of assets, liabilities, and off-balance sheet positions; their historical experience and business projections, adapting according to the complexity of operations they carry out, among other aspects.

Control and Mitigation
Art. 15.- Entities must permanently monitor liquidity risk exposure levels and compliance with risk limits approved by the Board of Directors, adopting immediate actions in cases of non-compliance. Additionally, it is fundamental to elaborate and implement a liquidity contingency plan that includes actions to be taken in the case of mild, severe, conjunctural, or cyclical crises and systemic crises.

Monitoring and Communication

Art. 16.- Entities must establish a continuous evaluation process of assumed liquidity risk positions, as well as the functioning of the entire liquidity risk management system. This process must detect and correct in advance any deficiencies that might exist in the application of policies, the development of processes, procedures, and any other aspect related to liquidity risk management.

Therefore, it must produce reports on the results of this monitoring and follow-up process, which must be analyzed and evaluated in Risk Committee meetings.

Additionally, entities must disclose and distribute appropriate information in a timely manner regarding liquidity position and management mechanisms to the Board of Directors, Senior Management, and personnel in accordance with internally adopted policies for this specific purpose. (5)

Art. 17.- Entities must develop and implement information systems, databases, and disclosure mechanisms that allow them to keep exposure levels under control and perform timely follow-up on liquidity risk.

Stress Tests
Art. 18.- Entities must conduct stress tests every six months that include at least the following: (5) a) A proprietary stress scenario based on the operations they carry out in accordance with the assumptions or premises specifically established by the entity; and b) A stress scenario based on the assumptions or premises specified in Annex No. 4 of these Standards. The Development Bank of the Republic of El Salvador is exempt from this obligation. (3) (5) The scope and assumptions to be used in stress tests will depend on the nature, complexity, vulnerability, and volume of operations performed by the entity, as well as its exposure to liquidity risk. The analysis must consider different time horizons, as well as aspects of market behavior and local and international macroeconomic conditions. The stress test scenarios with the premises supporting them will be submitted to the Superintendency, within the timeframe established in subsection b) of Article 21-A of these Standards. (4)

Liquidity Contingency Plan
Art. 19.- Entities must elaborate a contingency plan containing the strategy for managing liquidity crises and allowing them to face atypical or extreme situations.

For its formulation, the entity must define actions that include suitable sources of financing and clear criteria for their activation. Among other aspects, it must contain updated information on the following: (5) a) Roles and responsibilities of areas involved in implementing the contingency plan; b) Events or indicators that activate the liquidity contingency plan; c) Strategy to manage a potential lack of liquidity at the entity or systemic level; d) Identification of necessary external and internal alternative funding sources to face the liquidity crisis, including contingent credit lines. The funding needs must be backed by stress scenarios for identified risk factors; e) Internal and external communication channels, with the minimum reports that will be generated, detailing periodicity and responsible executives and/or involved parties; f) Classification of depositors by level of dependence that would affect the entity's liquidity position, in order to maintain permanent contact with them. The Development Bank of the Republic of El Salvador is exempt from this obligation; and g) Degree of dependence on funding sources, by nature, type of instrument, market, among others. The contingency plan to be elaborated must not be based solely on liquidity support that the Central Bank of Reserve of El Salvador might provide. The approved contingency plan must be submitted by entities to the Superintendency annually within the first ten business days of each year; they will also submit modifications made to said plan, within a maximum period of ten business days, from its approval.

CHAPTER IV
DEVELOPMENT OF METHODOLOGY, REGULATORY LIQUIDITY COEFFICIENTS, AND INFORMATION REQUIREMENT (5)

Application of Methodology
Art. 20.- Entities must establish a methodology that quantifies their liquidity risk, which must relate to the level and risk profile, target market, size, nature, complexity, foreign exchange risk exposure, and other characteristics of the entity, as well as its liquidity indicators. Additionally, the entity must perform retrospective tests, in order to validate the accuracy of its methodology regarding observed real values, which must

Alameda Juan Pablo II, entre 15 y 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-09/2012
NRP-05
TECHNICAL STANDARDS FOR LIQUIDITY RISK MANAGEMENT OF FINANCIAL ENTITIES Approval: 21/08/2012 Validity: 01/10/2012 be made available to the Superintendence when required in the evaluation process. Liquidity policies and methodologies related to liquidity risk management must be submitted to the Superintendence for its knowledge, and any changes must be communicated within a maximum of ten business days from their approval. Liquidity compliance by maturity term (5) Art. 20-A.- Entities must present in the cumulative total of the first two bands a positive balance at the close of each month, in accordance with the requirement specified in numeral 11 of the specific considerations of Annex No. 3 of these Standards. (5) Liquidity Coverage Ratio (5) Art. 20-B.- Entities obligated to submit information from Annex No. 5 referenced in articles 21-A and 21-B of these Standards must calculate the Liquidity Coverage Ratio daily, which aims to ensure that such entities maintain a fund of High-Quality Liquid Assets (HQLA) free of encumbrance, allowing them to cover the net cash outflow in a stress situation over 30 days, based on the assumptions of Annex No. 5 of these Standards, calculated as follows: (5) Liquidity Coverage Ratio = High-Quality Liquid Assets (HQLA) Fund Net Cash Outflows over 30 days ≥100 % (5) For the High-Quality Liquid Assets (HQLA) Fund, Level 2 High-Quality Liquid Assets cannot represent more than 40% of the total HQLA; once haircuts are applied, to maintain this condition, the following limit must be observed: (5) Max Lim 40% Level 2 HQLA ≤ 2/3 x Level 1 HQLA. (5) Where: (5) Level 1 HQLA = Level 1 High-Quality Liquid Assets (5) Level 2 HQLA = Level 2 High-Quality Liquid Assets (5) For the calculation of the Liquidity Coverage Ratio, incoming flows must not exceed 75% of total cash outflows. (5) Art. 20-C.- The Superintendence will verify the compliance of the indicator by the entities, which, to comply with the ratio requirement, must ensure that their value in periods of absence of financial tension is not lower than 100%. (5)

Net Stable Funding Ratio (5)
Art. 20-D.- Entities obligated to submit information from Annex No. 6 referenced in articles 21-A and 21-B of these Standards must calculate the Net Stable Funding Ratio, which aims to ensure that such entities maintain a stable funding profile relative to the composition of their assets, both on and off-balance sheet, with a time horizon of one year, based on the assumptions of Annex No. 6 of these Standards, calculated as follows: (5) (5)

Art. 20-E.- The Superintendence will verify the compliance of the Net Stable Funding Ratio by the entities, which, to comply at all times with the ratio requirement, must ensure that the result is not lower than 100%. (5)

Non-compliance and remediation plan
Art. 20-F.- In the event that entities fail to meet any of the requirements established in articles 20-A and 20-C of these Standards, the entities must notify the Superintendence the day following such non-compliance, specifying the reasons for it. (5) The Superintendence will analyze the reasons presented by the entities and determine whether the non-compliance is due to a cyclical or structural liquidity tension, and will implement, in accordance with its legal powers, different supervision measures, which may include requesting, within the timeframe it deems necessary, a remediation plan, which must include the identification of resources to increase high-quality liquid assets or reduce the net cash outflow. (5) Art. 20-G.- In the case that entities fail to meet the requirement established in article 20-E of these Standards, they must submit to the Superintendence a remediation plan to regularize their status, within twenty business days following the non-compliance, which must contain changes in the balance sheet structure (assets and liabilities) or other actions, as applicable. (5) Information requirement Art. 21.- Repealed (4) Net Stable Funding Ratio = Available Stable Funding Required Stable Funding ≥100%

Alameda Juan Pablo II, entre 15 y 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-09/2012
NRP-05
TECHNICAL STANDARDS FOR LIQUIDITY RISK MANAGEMENT OF FINANCIAL ENTITIES Approval: 21/08/2012 Validity: 01/10/2012 Art. 21-A.- Entities must submit the following information to the Superintendence: (4) a) Annex No. 3 “Liquidity by Maturity Term”, with monthly frequency, which must be submitted within fifteen business days following the close of each month; (4) b) Annex No. 4 “Stress Scenario Simulation”, with semi-annual frequency, which must be submitted with reference to the months of June and December within fifteen business days following the close of each semester; (4) (5) c) Annex No. 5 “Liquidity Coverage Ratio”, with weekly frequency, which must be submitted with daily data of the presented period, on the business day following the close of each week. Entities are obligated to inform the Superintendence, in case they present any non-compliance in the daily calculation, the day following the non-compliance, justifying the reasons, for the purpose that the Superintendence takes the corresponding prudential measures; and (5) d) Annex No. 6 “Net Stable Funding Ratio”, with monthly frequency, which must be sent within ten business days following the close of each month. (5) For the purpose of submitting the information required in Annex No. 6, accounting balances from their statements must be used for the account values. Furthermore, to complete this information, balances will be considered according to the effective residual maturity, indicated in the corresponding bands of the template, according to the real time remaining until maturity. (5) The Superintendence will transmit to the Central Reserve Bank of El Salvador the information from the Annexes described in this article within a period not exceeding five business days after receiving the information from the entities. (5) Art. 21-B.- To comply with the provisions of these Standards, entities must observe the following exceptions: (5) a) Development Bank of the Republic of El Salvador: compliance with articles 20-B and 20-D and the submission of Annexes Nos. 4, 5, and 6 is not applicable; (5) b) Investment Banks and Federations regulated under the Cooperative Banks Law and Savings and Credit Societies: compliance with articles 20-B and 20-D and the submission of Annexes Nos. 5 and 6 is not applicable; and (5) c) Cooperative Banks and Savings and Credit Societies: compliance with article 20-D and the submission of Annex No. 6 is not applicable. (5) Information submission Art. 22.- Entities must present to the Superintendence a report that includes

Alameda Juan Pablo II, entre 15 y 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-09/2012
NRP-05
TECHNICAL STANDARDS FOR LIQUIDITY RISK MANAGEMENT OF FINANCIAL ENTITIES Approval: 21/08/2012 Validity: 01/10/2012 the methodologies, criteria, and assumptions used to perform the estimates required in the preparation of Annexes Nos. 3 and 4 of these Standards. The aforementioned report must be sent, together with the first submission of the aforementioned annexes and whenever they are modified or updated. (5) The Superintendence may require the presentation of additional information supporting the methodology, criteria, and assumptions of the estimates it considers necessary for measuring liquidity risk.
CHAPTER V
OTHER PROVISIONS AND VALIDITY

Sanctions
Art. 23.- Non-compliance with the provisions contained in these Standards will be sanctioned in accordance with what is established in the Law for Supervision and Regulation of the Financial System.

Transitory and Repeal Provisions
Art. 24.- To comply with the provisions of these Standards, entities must present to the Superintendence a remediation plan within six months following its validity. Once the plan is presented, entities must implement it within a maximum period of six months, counted from the presentation of said plan. Art. 24-A.- Annexes No. 3 and No. 4 of these Standards, which contain updates in accordance with the “Accounting Manual for Deposit-Taking Institutions and Holding Company” (NCF -01), will enter into force starting January 1, 2024, which repeal and render void Annexes No. 1 and No. 2 of these Standards. From January 1, 2024, all provisions of these Standards that reference Annexes No. 1 and No. 2 will be understood as referencing Annexes No. 3 and No. 4. (3) Art. 24-B.- For system adaptation and information submission testing, the obligated subjects referenced in article 2 of these Standards, and which must comply with the information submission established in Annexes Nos. 5 and 6 of these Standards, will have a period of twelve months for the Liquidity Coverage Ratio (LCR) and twenty-four months for the Net Stable Funding Ratio (NSFR) from the entry into force of the modifications to these Standards, approved by the Central Reserve Bank of El Salvador through its Standards Committee in Session No. CN-10/2025 on December 17, 2025. (5)

Art- 25-A.- The technical details related to the submission of information requested in Annexes Nos. 5 and 6 of these Standards will be communicated by the Superintendence within a maximum period of thirty and sixty business days respectively, following the entry into force of the modifications to these Standards, approved by the Central Reserve Bank of El Salvador through its Standards Committee in Session No. CN-10/2025 on December 17, 2025.. (5) Art. 26.- Entities will submit the information requested in article 21 of these Standards, starting from October two thousand thirteen, a date on which the Standards for Determining the Maturity Relationships between Active and Passive Operations of Banks, (NPB3-08) approved by the Board of Directors of the Financial System Superintendence, whose Organic Law was repealed by Legislative Decree Number 592 containing the Law for Supervision and Regulation of the Financial System, published in the Official Gazette Number 23, Volume 390, dated February 2, 2011, are repealed. (1)

Unforeseen Aspects
Art. 27.- Aspects not foreseen in regulatory matters in these Standards will be resolved by the Standards Committee of the Central Reserve Bank of El Salvador.

Validity
Art. 28.- These Standards will enter into force starting from October one of two thousand twelve.
MODIFICATIONS:
(1) The deadline for submitting information for November 2013 with information up to October was extended by resolution of the Standards Committee of the Central Reserve Bank of El Salvador, in Session No. CN-11/2013 dated September 27, two thousand thirteen. (2) Modifications Approved by the Standards Committee of the Central Reserve Bank of El Salvador, in Session No. CN-01/2019, on February 20, two thousand nineteen, valid from March 01, two thousand nineteen. (3) Modifications Approved by the Standards Committee of the Central Reserve Bank of El Salvador, in Session No. CN-09/2023, on September 26, two thousand twenty-three, valid from October 11, two thousand twenty-three. (4) Modifications in Consideration III and articles 1, 2, and 18, repeal of article 21, and incorporation of article 21-A, approved by the Standards Committee of the Central Reserve Bank of El Salvador, in Session No. CN-08/2025, on September 30, two thousand twenty-five, valid from October 15, two thousand twenty-five. (5) Modifications in the name of the standard, in articles 1, 2, 3, 8, 16, 18, 19, 21-A, 22, and Annex No. 3, and incorporation of articles 20-A, 20-B, 20-C, 20-D, 20-E, 20-F, 20-G, 21-B, 24-B, 25-A, Annex No. 5, and Annex No. 6, approved by the Standards Committee of the Central Reserve Bank of El Salvador, in Session No. CN-10/2025, on December 17, two thousand twenty-five, valid from January 2, two thousand twenty-six.

Annex No. 1
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CNBCR-09/2012
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TECHNICAL STANDARDS FOR LIQUIDITY RISK MANAGEMENT OF FINANCIAL ENTITIES Approval: 21/08/2012 Validity: 01/10/2012

Repealed (3)

Annex No. 2
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CNBCR-09/2012
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TECHNICAL STANDARDS FOR LIQUIDITY RISK MANAGEMENT OF FINANCIAL ENTITIES Approval: 21/08/2012 Validity: 01/10/2012 Repealed (3)

From 0 to 30 days
From 31 to 60 days
From 61 to 90 days
From 91 to 180 days
From
181 to
360 days
More than
1 year
Total - reconciliation with balance data
111 Cash and Balances 1)
112 Operations with repurchase agreements
113 Financial investment instruments 2)
114 Loans 3)
122 Assets received in payment or adjudicated
Other assets 7)
4 Contingent rights 4)
126 Investments in shares, rights and participations 6) 13 Physical and intangible assets 6) (I) Total 211001 Checking accounts 211002 and 211003 Savings deposits 2111 and 2112 Time deposits 2116, 2117 and 2118 Borrowed funds 212 Own issuance securities 2115 Operations with reverse repurchase agreements 2119 Subordinated loans Other liabilities 7) 5 Contingent commitments 5) 3 Equity 6) (II) Total (III) Gap = (I - II) (IV) Cumulative Gap Mitigating Actions:

NOTES:
General Considerations for the Annex:

This annex considers the total balance of accounting items that affect the liquidity of obligated subjects, therefore the total of the asset account must reconcile with the total of liabilities and equity.
For accounts with a contractual maturity term, the real time in days remaining until maturity of the accounts must be considered, not the initially contracted terms (Do not consider contractual maturities). A percentage of renewal for time deposits may be considered, which will be estimated by the Entity, based on a historical average of the 12 months prior to the reporting date.
Not all balance sheet accounts generate flows; however, in these cases, the balance will be placed in the gap for more than one year.
For accounts that do not present a contractual maturity term, entities must estimate the expected maturity, with the exception of those cases where these standards have established a particular criterion.
Since the balance of checking and savings accounts has no residual maturity date, entities must establish a methodology that quantifies the expected outflow for these types of deposit accounts to be placed in the 30-day gap, which must be authorized by the Risk Committee. This methodology must be validated through retrospective tests, which must be included in the Liquidity Risk Management Manual. (5)
Entities must attach a report on the estimates for the maturity of items that do not present a maturity term in accordance with the provisions established in article 22 of these Standards. Specific Considerations for the Annex:
All Cash and Balances (item 111) without a stated maturity term will be reported in the first time band (From 0 to 30 days); if there is a contractual term in the account, it must be distributed according to the days remaining until maturity.
The balance recording of item 113 Financial investment instruments includes interest. The date capital and interest will be received will be considered for placement in the corresponding band; additionally, the real maturity term of repurchase operations performed will be considered, placing the value in the corresponding band.
The balance recording of item 114 Loans, (net of provision) includes interest that has been provisioned. Loans must be distributed according to the real time remaining until maturity. For interest, they will be placed according to the time in which they are expected to be received. Regarding the balance of overdue loans net of provisions (1148), these will be placed in the gap for more than one year unless the entity has evidence and certainty that they will be recovered prior to this term.
Includes the estimate of future rights and contingencies (net of provision), which will become a right for the entity; balances will be placed in each band according to maturity.
Includes the estimate of future commitments and contingencies (net of provision), which will become liabilities for the entity. They will be placed in each band according to maturity.

Annex No. 3 (3)
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TECHNICAL STANDARDS FOR LIQUIDITY RISK MANAGEMENT OF FINANCIAL ENTITIES Approval: 21/08/2012 Validity: 01/10/2012
6) Information will be provided in these accounts in the first bands if extraordinary operations are performed to cover specific gaps, such as the sale of fixed assets or a capital contribution; otherwise, it may carry a zero value, as they are permanent accounts, and the balance of this account must be included in the corresponding band for more than one year.
7) In these lines, accounts not detailed in the template will be considered, and entities must specify the accounts that have had movements in each of the gaps.
8) The maturities of each item will be placed in the corresponding gap, and the balance with maturity greater than 360 days will be placed in the gap for more than one year.
9) Consider only the interest from the balance sheet and not the expected interest to be received off-balance sheet.
10) Attach methodologies used for the estimation of maturity for each variable, in each gap.
11) The cumulative total of the first two bands must be positive (IV) Cumulative Gap; otherwise, mitigating measures to be used must be determined.
This Annex will enter into force starting January 1, 2024.

Annex No. 4 (3)
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TECHNICAL STANDARDS FOR LIQUIDITY RISK MANAGEMENT OF FINANCIAL ENTITIES Approval: 21/08/2012 Validity: 01/10/2012

STRESS SCENARIO SIMULATION - Semi-annual Frequency (Maturity balances distributed by gaps) (Thousands of United States Dollars)

Entity Name: ____________________ Reference Date: ________

From 0 to
30 days
From 31 to
60 days
From 61 to
90 days
From 91 to
180 days
From 181 to 360 days
More than
1 year
Total
111 Availability
112 Operations with repurchase agreement
113 Financial investment instruments
114 Loans
122 Assets received in payment or adjudicated
Other assets *
4 Contingent rights
126 Investments in shares, rights and participations 13 Physical and intangible assets (I) Total 211001 Checking account deposits 211002 and 211003 Savings deposits 2111 and 2112 Time deposits 2116, 2117 and 2118 Received loans 212 Own issue securities 2115 Operations with reverse repurchase agreement 2119 Subordinated loans Other liabilities * 5 Contingent commitments 3 Equity (II) Total

(III) Gap = (I - II)
(IV) Cumulative Gap
Detail: Contingency Plan

In these rows, accounts that have not been detailed in the format will be considered,
and entities must specify the accounts that have had movement in each of the gaps.
Attach methodologies used for the scenarios of each variable, of each gap.

PREMISES FOR THE STRESS SCENARIO.
Considerations for the Annex:
To carry out the stress scenario of this Annex, the figures reflected in the report of Annex No. 3 will be taken as a base; that is, only the items in which the premises detailed below will be applied will be subject to modification:
Financial Investments:
1\ If the entity holds securities that have any type of encumbrance, these will be placed in the corresponding band according to the actual time remaining until the maturity of said encumbrance. 2\ Insolvent issuers will be considered, so in the case that the entity decides to sell positions of long-term debt securities classified in categories from AAA to BB, and short-term debt securities classified in categories N-1 and N-2, they will be sold with a discount of 20%. In the case that the entity does not carry out investment sales, it may receive the expected interest and/or principal payments, according to their maturity at 100% of their value. In the case of long-term debt securities with categories from B to E and the issuance of short-term debt securities with categories between N-3 and N-5, their principal and interest will be placed in the band of more than one year maturity. Securities that do not have a rating will be placed in the band of more than one year. Loans:
1\ Entities must calculate a high-risk credit indicator, plus an additional 20%.
The result must be multiplied by the balance of the expected recovery of current one-year loans (regardless of the agreed term), which will be placed in the band of more than one year. The high-risk credit indicator is defined as:
CAR = (CV + AC) / TCB; where:
CAR = High-risk credits;
CV = Balance of overdue credits at the last quarter under study; (the average of the quarter will be considered); AC = Write-off assets accumulated in the last three months, as of the study date (off balance sheet); TCB = Total gross credits, balance sheet balance of the last quarter under study (Accounts 114 adding the balance of account 1149, the average of the quarter will be considered). 2\ The percentage difference of recovery [100%-(CAR+20%)] will be multiplied by the balance of the expected recovery of current one-year loans, which will be distributed in each band according to its maturity. 3\ The recovery of loans with a maturity of more than one year will be placed in the band corresponding to the actual time in days remaining until the maturity of the accounts.

Annex No. 4 (3)
Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-09/2012
NRP-05
TECHNICAL STANDARDS FOR THE MANAGEMENT OF LIQUIDITY RISK OF FINANCIAL ENTITIES Approval: 08/21/2012 Validity: 10/01/2012 Deposits:
1\ 40% of sight deposits (savings and checking) are withdrawn in the first band.
2\ All time deposits will be placed in the corresponding band, according to the actual time remaining until the maturity of said deposits. Renewals will not be considered according to the balances established in Annex No. 3. Received Loans:
1\ Received loans must be cancelled on the established maturity date, without possibility of renewals according to the balances determined in Annex No. 3.
Issue Securities:
1\ No new issuances of securities will be carried out.
2\ The maturities of the securities will be placed in each band according to the actual time in days remaining until maturity.
This Annex will enter into force as of January 1, 2024.

Technical Standards for Liquidity Risk Management of Financial Entities

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