Government relaxes criteria that public banks must observe when granting credit.
Financial institutions will no longer be required, for example, to verify the certificate of no outstanding debt with the Federal Government from borrowers.
BRASILIA (Reuters) - President Jair Bolsonaro signed a Provisional Measure (MP) to simplify access to credit during the coronavirus crisis, exempting public banks from observing a series of requirements in contracting and renegotiating loans until September 30th.
The initiative paves the way for institutions such as Caixa Econômica Federal, Banco do Brasil, and the National Bank for Economic and Social Development (BNDES) to grant more credit. The provisional measure was published in the Official Gazette of the Union this Monday.
Financial institutions will no longer be required, for example, to verify the certificate of no outstanding debt with the Federal Government from borrowers.
The provisional measure also establishes that banks must report quarterly to the Federal Revenue Service and the Attorney General's Office of the National Treasury on the list of credit contracts and renegotiations involving public funds carried out directly or through financial agents, indicating, at a minimum, the beneficiaries, the amounts, and the terms involved.
When asked about the amount of credit that could be renegotiated under the Provisional Measure, the Ministry of Economy did not immediately comment.