He Central Bank of Uruguay (BCU), through the Superintendence of Financial Services (SSF)advances in a project to renew the Uruguayan financial system with special emphasis on activities related to banks.
The plan, which seeks to renew before December all the sectors covered by the BCU regulation, has the objective of contributing industry predictability and involve other actors in the design of the changes, since several of them will be consulted to implement them.
The monetary authority advances five changes in the operation of banks and non-bank financial institutions. Three of them have an immediate effect on the experience of users of the banking system.
- Debtor balance coverage insurance: the regulatory project is ready and reviews the collection of compensations or commissions for the insurance coverage of debit balance that the institutions force their clients to hire. The changes will be made in the sense of strengthening the regulatory framework linked to the protection of the user of financial services.
- Financial transaction report: Thus, the report format will be modernized and the repetition of data provided in other reports will be avoided. In the second quarter there will be a public consultation and in the third quarter the initiative will materialize.
- Suspicious transaction report form: It will be restructured, modifying the way STRs are presented. Meanwhile, the document will be customized for each type of financial institution, all relevant information will be systematized and errors will be minimized. The changes will become effective in the third quarter of the year.
The other two modifications that the Central Bank will promote in the operations of the banking system are related to the accounting framework and provisions for risk.
For the first, the BCU will review the regulations on restructuring of credit operations. It will seek to contemplate “situations that would warrant the exposure of the restructuring as current and a cure period for restructurings that are not exposed as current.” In the second quarter there will be a public consultation and between April, May and June the regulations will be issued.
Meanwhile, the entity will analyze the provisions of Annex 1 of the Roadmap Impairment Standard IFRS 9 and the provisioning percentages by risk category provided in Annex 2 of the Accounting Framework. At this point, it will also seek to align the regulations with international standards, something that is expected to be completed in the second half of the year.
Source: Ambito
