In brief

The Central Bank of Venezuela (CBV) issued Resolution No. 22-03-01 ("Resolution") on 17 March 2022, which regulates the issuance of banking credits using the Credit Value Unit (CVU). The Resolution entered into force on 23 March 2022 and repealed Resolution No. 22-01-02 issued by the CBV.

The Resolution establishes that banking credits must be denominated solely in CVU. To value obligations in terms of the CVU, banking institutions must divide the credit's amount in local currency (VEB) by the Investment Index (IDI) of that date, published daily in the CBV's website. In addition, the CBV also modified the annual interest rates established in the repealed resolution.

In more detail

The most relevant aspects of the Resolution are the following:

  1. Annual interest rate

a. Credits granted under the Sole National Productive Portfolio: a 6% annual interest rate

b. Commercial credits and microcredits: an annual interest rate of between 8% and 16%

c. Loans with credit cards and other methods of consumption credit: Loans granted through credit cards or other methods of consumption credit, with a line of credit equal to or greater than 20,400 CVU,3 will have an annual interest rate equal to or greater than 10%.

d. IDI: The CBV publishes the IDI daily. The exchange rate's variation, which the CBV calculates and publishes daily, will be the factor used to calculate the capital depreciation of the granted credit.

e. Exclusions. The Resolution excludes the following from its application:

i. Commercial loans directed to employees and directors of banking entities, which have a maximum annual interest rate equivalent to 90% of the valid rate for active operations related to credit cards, published monthly by the CBV through an official notice

ii. Active operations related to credit cards, commercial loans granted to persons for nominal credits and other consumption credits, with limits inferior to 20,400 CVU. In those cases, banking institutions must charge clients an annual interest rate equal to or less than the valid rate for active operations related to credit cards published monthly by the CBV.

  1. Conditions for approval by the banking authority

Banking entities that execute credits under the UVC must include these clauses, which are subject to approval by the banking authority (SUDEBAN):

a. All credits that consider payment in quotas must include in each payment the amount corresponding to interests and a portion to depreciate the capital expressed in CVU.

b. For credits under the Sole National Productive Portfolio that consider one sole payment, the total amount (main amount plus interests) will be contemplated in CVU. This credit modality will have a special charge of 20% at the moment of the loan's liquidation, which will be expressed in CVU, and will be deduced from the debit balance at the moment of cancellation.

c. The possibility for the debtor to cancel the loan in advance and at any moment, without risk of penalties: If the cancellation date's IDI is less than the IDI from the day the loan was granted, the latter will be used.

d. A detailed explanation by the banking institution about the credit's expression in CVU and its valuation and payment, in the terms established by the Resolution and other relevant norms dictated by the CBV and SUDEBAN

e. A declaration by the debtor where they accept the terms of the obligations assumed in CVU

  1. Interests

a. Interests for defaulting obligations: Regarding defaulting obligations, banking institutions may charge a maximum of 0.8% annually in addition to the interest rate agreed upon for the operation using CVU. Banking entities may charge an additional 3% annual default interest rate if the credits are not expressed under the CVU.

b. Interests on savings deposits: Banking institutions must not pay an annual interest rate below 32% for savings deposits they receive.

c. Interests on time deposits: Banking institutions must not pay an annual interest rate below 36% for time deposits and certification operations for time deposits.

d. Information on interests: Banking institutions must send the CBV periodic information on interest rates they offer to clients for active and passive operations, using the terms determined by the CBV.

e. Knowledge of interests: Banking institutions must ensure public knowledge of the interest rates it offers and their specific terms, and will announce the information in its offices and websites.

f. Interests on discounts, rediscounts and advances: The CBV will apply an annual interest rate of 19.2% in its discount, rediscount and operations in advance. The CBV may periodically review the rate and publicly inform of any changes in its website.

  1. Noncompliance

Noncompliance with the Resolution's dispositions will be sanctioned according to Article 135 of the Decree with Rank, Value and Force of Law of the VCB.

  1. Non-retroactivity

Commercial credits, microcredits and credits under the Sole National Productive Portfolio granted before 23 March 2022 will maintain their agreed-upon conditions until their total cancellation.

  1. Commissions, tariffs and charges

Banking institutions may only charge commissions, tariffs and/or charges to clients or the public for concepts established by the CVB through resolutions and notices dictated on the matter, until the maximum limits permitted in them.