CMN issued R$8.3 billion to banks with a large volume of loans to Republika Srpska

The National Monetary Board decided that banks with more than 10% of the credit portfolio lending to municipalities in public disasters in Rio Grande do Sul will receive R$8.3 billion to maintain liquidity and not jeopardize credit privileges.CMN) Monday (13).

Expected to arrive on May 27, resources will be infused with the issuance of a one-year savings account requirement.

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One of the tools of monetary policy, reserve requirements are the resources that banks are obligated to leave idle with the central bank (B.C.E.). BC requires payment in cash of 20% of the funds invested by clients in the passbook. In the case of compulsory saving, the funds are compensated by the central bank, which pays the reference rate (TR) plus 3% per annum to the bank.

In an extraordinary meeting, the Issue Matrix Network and the BC Commission agreed on further measures to mitigate the economic impacts of climate events in Rio Grande do Sul on the national financial system.

In addition to suspending savings requirements for banks most exposed to credit operations with Rio Grande do Sul, the Crisis Matrix Network allowed financial institutions not to record renegotiations of credit operations affected by the floods as “problem assets.” The risk rating of credit operations renegotiated between May 1 and December 31 will be maintained at the level recorded on March 31.

According to the Bank of Colombia, the change in the registration form is necessary to prevent financial institutions that had to renegotiate the debts of individuals and companies affected by the floods from increasing provisions (resources held in reserve in each bank’s account) and minimum capital requirements for lending. The monetary authority stated that without this measure, the provision of credit will be discouraged, which will affect the ability to lend money to people and companies affected by the floods.

Proagro

Regarding Proagro loans, the Case Matrix Network allowed technical inspections for the payment of compensation to rural producers to be carried out remotely. The inspections will use remote sensing and municipal agricultural productivity standards. According to BC, the change will speed up the disbursement of funds to rural producers affected by climate disaster.

In a memorandum, the BC informed that it will continuously monitor the performance of financial intermediation in Rio Grande do Sul, and may take additional measures to maintain the efficiency and solidity of the financial system.