Decree of the Ministry of Finance No. 388 / 2001 Coll.
Decree of the Ministry of Finance on the rules of credit engagement of savings and credit cooperatives
Valid
Order
Effective from 09.11.2001
Text versions:
09.11.2001
388
DECLARATION
Ministry of Finance
of 23 October 2001
on the rules on credit exposures of savings and credit cooperatives
The Ministry of Finance provides pursuant to § 11 and 28i of Act No. 87 / 1995 Coll., on savings and credit cooperatives and certain measures related thereto and on supplementing the Act of the Czech National Council No. 586 / 1992 Coll., on Income Taxes, as amended, as amended, as amended by Act No. 100 / 2000 Coll., hereinafter referred to as "the Act":
This decree lays down rules on the risk reduction of the loss of savings and credit cooperatives ("the cooperative reserve ') as a result of the possible impairment of its financial assets.
The capital of the cooperative reserve is the capital provided for by the special law on the solvency rules of cooperative advances.
For the purposes of this Order, financial assets shall mean:
(a) any contractual cash claims of the cooperative reserve for natural or legal persons in favour of the cooperative reserve. These are in particular:
1. loans to members of the cooperative reserve,
2. loans to municipalities,
3. third party liabilities in favour of the cooperative reserve;
(b) the claims of the cooperative reserve on behalf of the issuer of the securities held by the cooperative reserve.
The credit exposure of a cooperative reserve to its borrower shall be understood as all financial assets of a cooperative reserve that has acquired or is legitimately expected to acquire in relation to guarantees issued by the cooperative reserve in relation to a natural or legal person. Credit exposures shall include in particular:
(a) the total value of the cooperative guarantee against the debtor of outstanding claims;
(b) the total value of bonds and other securities constituting a payment obligation and held by a cooperative reserve;
(c) the total amount of irrevocable guarantees of a cooperative advance payment or performance which no party may unilaterally terminate or amend before the agreed date provided to members of the cooperative advance as debtors for the benefit of a third party;
(d) the total amount of liabilities of the cooperative reserve not yet used by the beneficiary within the meaning of:
1. the commitment to grant credit;
2. a liability obligation to provide a guarantee for a member's credit granted by other persons;
(e) interest charged as revenue from subsequent periods.
(1) Gross credit exposure to a particular borrower is the sum of all credit exposures to that borrower.
(2) The cooperative reserve may deduct from gross credit exposures to the obligor and at the same time transfer to credit exposures to other persons (issuer of the guarantee, issuer of the bond, bank in whose account the money is deposited as a hedging instrument) those parts thereof which are fully secured by one of the following means of hedging:
(a) a written, irrevocable, unequivocal guarantee issued to the cooperative reserve by an entity whose risk weight as determined by the Ministry of Finance Decree on the solvency rules of savings and credit cooperatives is less than 50%;
(b) a pledge of other assets whose risk weight determined by the Ministry of Finance Decree on the solvency rules of savings and credit cooperatives is 0% or 20%.
(3) A change in the credit exposures referred to in paragraph 2 shall be possible only for the fulfilment of all the formalities so that the sole condition for the exercise of the right of the cooperative advance guarantee is that the debtor has not properly and in a timely manner fulfilled his obligations to the cooperative advance payment. At the same time, the maintenance of the quality of the collateral for the entire duration of the hedged relationship must be guaranteed.
(4) The cooperative reserve may further deduct from gross credit exposures liabilities within the meaning of Article 4 (1) (d), provided that the cooperative reserve has an unconditional, non-negotiable and irrevocable right at any time to withdraw such an obligation unilaterally without any claim from the beneficiary.
Net credit exposure means gross credit exposure after deduction of items under Sections 5 (2) and 5 (4).
(1) An economically linked group of debtors is two or more debtors (natural or legal persons) against which the cooperative has a credit exposure and who are linked by:
(a) one of the debtors has control over others within the meaning of Article 1 (1) of the Act; or
(b) their relations are such that the financial difficulties of one debtor may cause payment difficulties for at least one of the others.
(2) The economically linked group of debtors referred to in paragraph 1 poses a single risk to the cooperative reserve and is regarded as a single borrower.
The members of the elected bodies of the cooperative reserve and persons close to them shall be regarded as having a special relation to the cooperative advance.
The cooperative reserve shall ensure that:
(a) the net credit exposure to a single borrower or an economically linked group of debtors other than those referred to in points (b), (c), (d) and (2) of Article 10 shall not exceed 70% of the capital of the cooperative reserve;
(b) the net credit exposure to a bank or to an economically linked group of debtors composed solely of banks shall not exceed 50% of the deposits of members deposited in the cooperative reserve;
(c) the net credit exposure to the municipality or to an economically linked group of debtors composed solely of municipalities shall not exceed 500% of the capital of the cooperative reserve;
(d) the net credit exposure to a person with a special relationship to a cooperative advance or to an economically linked group of debtors composed of persons with a special relationship to a cooperative advance shall not exceed 55% of the capital of the cooperative advance;
(e) the sum of the net credit exposures to the ten largest debtors or economically linked groups of debtors referred to in paragraph 1 shall not exceed 650% of the capital of the cooperative reserve.
(1) In the event that the cooperative reserve exceeds the net credit exposure rules laid down in Article 9 on the date of application of this Decree, it shall not further increase that excess and shall further reduce its net credit exposure so as to achieve the specified rules by 31 December 2001 at the latest.
(2) The limits on net credit exposures are not subject to and exempt from credit exposures
(a) the State;
(b) Member States of the Organisation for Economic Cooperation and Development;
(c) the Czech National Bank,
(d) the central banks of the Member States of the Organisation for Economic Cooperation and Development.
This decree shall take effect on the day of its publication.
Minister:
Ing. Rusnok v. r.
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Regulation Information
| Citation | Decree of the Ministry of Finance No. 388 / 2001 Coll., on the rules of credit engagement of savings and credit cooperatives |
|---|---|
| Regulation Type | Order |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 09.11.2001 |
|---|---|
| Effective from | 09.11.2001 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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