The Banking Regulation Review: Argentina
The Argentine financial system is currently composed of 64 banks and 14 financial entities (non-banks). According to the last survey published by the Argentine Central Bank (BCRA),2 the top five financial institutions, in terms of their total assets in 2020, are the following:
- Banco de la Nación Argentina, with assets of 1,770,583.5 million Argentine pesos;
- Banco Santander Rio SA, with assets of 901,173.1 million pesos;
- Banco de Galicia y Buenos Aires SAU, with assets of 867,062.1 million pesos;
- Banco de la Provincia de Buenos Aires, with assets of 848,221.5 million pesos; and
- Macro SA, with assets of 660,606.8 million pesos.
In spite of major efforts conducted to strengthen the existing controls over the banking industry, to turn it into a relatively conservative system and to reduce risk exposures, there is still much work to be done, as there continues to be a lack of confidence in the system among the public. Evidence of this lies in the fact the country still has below-average levels of banking inclusion (only 48 per cent according to the latest report issued by the Argentine Fintech Chamber in 2020)3 in comparison with other countries in the region.
In this sense, Argentine authorities and regulators have put special focus on financial inclusion, designing a national strategy for financial inclusion and issuing regulations to promote it. Among these are regulations that encourage the use of technology in the provision and development of financial services, allowing, for instance, the creation of digital wallets for the performance of instant payments or money transfers ordered through mobile devices or computers, or even the withdrawal of cash from retail stores that are regulated, non-financial correspondents.
The regulatory regime applicable to banks
The Argentine banking industry is subject to strict regulations and controls, mainly provided by the Financial Institutions Law (FIL),4 which has been regulating banking activities in Argentina since 1977. At the same time, the FIL places the supervision and control of the Argentine banking system on the BCRA, pursuant to the BCRA Charter Law.
The BCRA is an autonomous organism in charge of enforcing all financial regulations. It is ruled internally by its Organic Chart,5 which determines its powers and functions as the lead regulator of the banking system.
The functions carried out by the BCRA can be categorised into two groups: all the concrete measures and actions taken to promote monetary and financial stability, which are the typical functions performed by central banks; and the regulatory faculties, which include the elaboration and enforcement of the regulations necessary to achieve its aims. Regarding its regulatory faculties, the BCRA has vested, through its Organic Chart, its supervisory powers and the enforcement of regulations enacted by it to the Superintendency of Financial and Foreign Exchange Institutions (the Superintendency).
The FIL has explicitly conferred to the BCRA the following powers:
- granting and revoking bank licences;
- authorising the establishment of bank branches abroad;
- approving bank mergers, capital increases and certain transfers of stock;
- setting minimum capital, liquidity and solvency requirements and lending limits;
- granting credit facilities to financial institutions in cases of liquidity problems; and
- promulgating all the regulations that are deemed necessary for such purposes.
Regulations enacted by the BCRA are known as communications. These play an essential role in the design and control of the Argentine banking regulatory system. The BCRA is also the regulatory agent and enforcement authority of the foreign exchange market. Thus, the BCRA regulates the interaction with some other specific regimes and the effects that these have over the banking system, such as those introduced by the following regulations:
i Relationship with the prudential regulator
The BCRA, in its capacity as regulator of the Argentine financial system, requires financial institutions to submit information periodically (on a daily, monthly, quarterly, semi-annual and annual basis). These reports, which include the provision of balance sheets, income statements and information relating to reserve funds, deposits, portfolio quality and other matters, allow the BCRA to monitor institutions' financial conditions and business practices.
The BCRA periodically carries out formal inspections of all banking institutions to monitor banks' compliance with legal and regulatory requirements and confirm the accuracy of the information provided to the BCRA. If BCRA rules are breached, it may impose various sanctions depending on the magnitude of the infringement. These sanctions range from warning calls to the imposition of fines, or even the revocation of the financial institution's operating licence. Moreover, non-compliance with certain rules may result in the obligatory presentation to the BCRA of specific adequacy or regularisation plans. The BCRA must approve these plans for the financial institution to remain operational.
Accordingly, since 1994, the BCRA has rated financial institutions based on the CAMEL quality rating system. Each letter of the CAMEL system corresponds to an area of the operations of each bank being rated, with 'C' standing for capital, 'A' for assets, 'M' for management, 'E' for earnings and 'L' for liquidity. Each factor is evaluated and rated on a scale from one to five, with one being the highest rating an entity can receive.
This system was replaced in 2000 by CAMELBIG. Even though the objectives and basic methodology of this new system do not differ substantially from the previous CAMEL system, the components were redefined to evaluate business risks separately from management risks. Therefore, the components used to rate business risks are capital, assets, market, earnings, liquidity and business. The components used to rate management risks are internal control and the quality of management. By combining the individual factors under evaluation, an index can be obtained that is representative of the final ratings for the financial institutions analysed.
ii Management of banks
Regarding management structures, the appointed directors and top-level managers must be approved by the BCRA and once approved, must exercise their functions as per the relevant BCRA communications. To approve the appointees' designation, the BCRA evaluates their capacity, experience, reputation and ability in the financial field. Likewise, the personnel designated for the management of foreign financial entities' branches set up in Argentina must be approved by the BCRA.
Current regulations mandate banks to have an audit committee composed of at least two members of the board of directors and an internal auditor.
In addition, BCRA policies establish that financial institutions must implement adequate internal control procedures for monitoring compliance with corporate governance requirements, applicable laws and regulations, and to report any deviation to the managers or the board of directors. For this purpose, the BCRA has established guidelines and methodologies that internal controls should follow, stating that these should focus on three different aspects: measuring the effectiveness and efficiency of transactions, testing the reliability of accounting information, and monitoring compliance with the applicable laws and regulations.
According to the BCRA criteria, all board members of financial entities are deemed responsible for compliance with the internal controls. However, this responsibility is particularly assigned by the regulations to the board of directors, the managers, the audit committee and the internal auditor. The BCRA has also provided a set of guidelines for financial entities' good corporate governance (good practices).
With respect to the payment of bonuses to management and employees, a specific procedure is in place and certain requirements must be met by the financial institution before authorisation for granting these bonuses, such as:
- the financial entity cannot be subject to a regularisation or reorganisation process;
- the financial entity cannot be registered for obtaining financial assistance from the BCRA;
- the financial entity cannot present delays or non-compliance with the informative regimes established by the BCRA; and
- the financial entity must comply with, inter alia, the integration of capital and minimum cash requirements.
These requirements are revised periodically, in relation to the volume of each entity's operations.
iii Regulatory capital and liquidity
Minimum capital requirements
During the past few years, the BCRA has also worked on the implementation of policies aiming to comply with Basel III guidelines, designing a roadmap for this purpose. It has established regulations regarding the liquidity coverage ratio (LCR), LCR monitoring tools and introducing Basel principles for liquidity risk management and supervision.
In that sense, the BCRA has stated that the minimum legal capital requirement for financial entities should be equal to the greater value resulting from a comparison between the applicable basic requirement (corresponding to the type of entity) and the sum of those requirements determined by credit and market risk, as well as the operational risk.
The minimum legal capital requirement may be increased by 1 per cent in relation to certain assets if the financial institution is considered systemically important. Furthermore, when banks act as custody or registry agents, these requirements are higher.
To verify compliance with the minimum capital requirements, the paid-in capital to be considered shall be the computable regulatory capital (RPC).
Any financial institution operating with an RPC under the legally established minimum shall pay the corresponding amount within a certain period (counted from when it was determined to have failed to comply with the requirement) or submit a regularisation and reorganisation plan to the Superintendency. The Superintendency may appoint a supervisor and impose restrictions on the distribution of dividends, among other actions, until the proper integration is verified.
Moreover, any financial institution operating under the minimum daily capital requirement in relation to market risk, when such failure is caused by the requirements established to prevent interest rate risk, foreign exchange risk or equity prices risk, shall pay the corresponding amount or reduce its asset position, or both, until the minimum requirement is complied with. Whenever the deficiency verified by the authorities remains after the term provided for its integration, the entity must submit a regularisation and reorganisation plan to the Superintendency.
The BCRA requires banks to allocate an amount between 10 per cent and 20 per cent of their annual net profits to a legal reserve. This reserve amount may only be used in certain deficiency scenarios, and the distribution of dividends will not be allowed if the legal reserve has been utilised.
Minimum cash requirements
Financial institutions are also required to observe minimum cash requirements. These are established as a percentage of the balances of the different types of bank deposits. For term deposits, the percentage varies depending on the time remaining until maturity. The minimum cash requirements will determine the lending capacity with respect to the different kinds of deposits.
Compliance with the minimum cash requirements is determined in averages, for monthly periods. The BCRA regularly modifies the percentages of the minimum cash requirements depending on monetary policy considerations. The minimum cash requirements can be satisfied not only with cash but also with other assets (such as certain bonds or monetary regulatory instruments), provided they are in the same currency as the deposit that triggers such requirement.
The BCRA periodically modifies the applicable minimum cash requirement depending on monetary policy considerations.
Supervision of banking groups
Financial entities must require each shareholder, in Argentina or abroad, to prepare consolidated financial statements of the economic group to be presented semi-annually to the Superintendency. Consolidated financial statements of foreign groups will also be required to be audited by a firm of recognised prestige.
Entities that own or acquire shares in foreign subsidiaries must give their consent to provide the information required by the Superintendency to enable it to exercise supervision based on the consolidated financial situation. For the determination of the information requirements, the Superintendency shall consider the legislation of the country in which the subsidiary is located and the agreements held with the local supervisory body.
Whenever the Superintendency does not have the information deemed necessary to evaluate a financial institution on a consolidated basis, the local financial entities will not be allowed to hold shares in banks or foreign companies that are consolidated as significant subsidiaries. In this case, the Superintendency would provide an appropriate time frame for the sale of such shares.
iv Recovery and resolution
Financial entities' regularisation
The FIL establishes that financial institutions that evidence a deficiency in their cash reserves or have not complied with certain technical standards, including minimum capital requirements, or whose solvency or liquidity is deemed to be compromised, must submit a restructuring plan to the BCRA.
In relation to the restructuring plan, the BCRA may require a financial institution to provide guarantees, limit the distribution of profits and appoint a supervisor to oversee the institution's management, with the power to veto decisions taken by its corporate authorities.
Revocation of authorisation to function
If a restructuring plan is not filed, approved or complied with by the financial entity, the BCRA may revoke its authorisation to function. The BCRA board may also revoke the entity's authorisation to operate in the following situations: at the request of the authorities of the entity; in cases of dissolution established in the codes and laws that regulate its existence as a legal entity; and in other cases established in the FIL (e.g., when sanctions are imposed or when a fundamental change to the basic conditions prescribed for the granting of the authorisation occurs).
Restructuring and dissolution of financial entities
Argentina's legal system has a specific procedure to deal with banking insolvency – which differs from the ordinary procedure established by the Bankruptcy Law – that involves the intervention of the BCRA for the protection of customers and creditors. This procedure is regulated in Section 35 bis of the FIL and it establishes that if, in the judgement of the BCRA, a financial institution is in a situation in which the FIL would authorise it to revoke its licence to operate, the latter may, before considering the revocation, order a variety of measures, including:
- taking steps to reduce, increase or sell the financial institution's capital;
- revoking the approval granted to the shareholders of the financial institution to own an interest therein, giving a term for the transfer of such shares;
- excluding and transferring assets and liabilities;
- constituting trusts with all or part of the financial institution's assets;
- granting temporary exemptions to comply with technical regulations, or paying charges and fines arising from such defective compliance, or both; and
- appointing a bankruptcy trustee and removing statutory authorities.
Any actions authorised, commissioned or decided by the BCRA under the FIL involving the transfer of assets and liabilities, or those deemed necessary to execute the restructuring of a financial institution, as well as those related to the reduction, increase or sale of its equity, are not subject to any court's authorisation, and cannot be deemed inefficient in respect of the financial institution's creditors.
Regarding the dissolution of financial entities, the BCRA must be notified of any decision to dissolve a financial institution pursuant to the FIL. The BCRA must then notify a court of competent jurisdiction, which will determine who will liquidate the entity (either the corporate authorities or an appointed independent liquidator). This determination is based on the ability of the corporate authorities and the existent assurances to carry out the liquidation properly.
Moreover, the bankruptcy of a financial institution cannot be adjudicated until its licence is revoked. No creditor, with the exception of the BCRA, may request the bankruptcy of a former financial institution before 60 days have elapsed since the revocation of its licence.
Finally, financial entities' branches are responsible for their own assets: parent companies do not respond for them.
Suspension of functions
The BCRA Organic Chart authorises the Superintendency, subject to the prior approval of the president of the BCRA, to suspend for up to 30 days, in whole or in part, the operations of a financial institution if its liquidity or solvency has been adversely affected. Notice of this decision must be given to the BCRA's board of directors.
If at the end of such suspension period the Superintendency considers it is necessary to renew it, it can only be authorised by the board of directors for an additional period of up to 90 days. During the suspension period, there is an automatic stay of claims, enforcement actions and precautionary measures; any commitment increasing the financial institution's liabilities is void; and the acceleration of indebtedness and interest accrual is suspended.
Deposit insurance system
In 1995, Law No. 24,485 and Decree No. 540/95, as amended, created a mandatory deposit insurance system for bank deposits and delegated the organisation and initiation of the deposit insurance system to the BCRA. The deposit insurance system was implemented through the creation of a deposit guarantee fund (FGD), which is administered by Seguros de Depósitos SA (SEDESA). The shareholders of SEDESA are the Argentine government, through the BCRA, which holds at least one share, and a trust constituted by the financial institutions that participate in the fund.
The BCRA establishes the extent of participation of each institution in proportion to the resources it contributes to the FGD. Banks must contribute to the FGD on a monthly basis. In addition, when the contributions to the FGD reach a certain threshold, the BCRA may suspend or reduce the monthly contributions and reinstate these when contributions fall below the required level.
The deposit insurance system covers all peso and foreign currency deposits held in demand deposit accounts, savings accounts and time deposit accounts (for a certain maximum amount defined per person, account and deposit). Certain deposits are not covered by the guarantee of the deposit insurance system, such as deposits received at rates higher than the reference rate under the limits established by the BCRA, deposits acquired by endorsement and those made by persons related to the financial institution (as defined by BCRA regulations).
v New payment service provider regime
The FIL empowers the BCRA to apply the FIL and its regulations to other entities or activities if it deems this necessary based on the volume of their operations and their monetary and credit policies. Also, pursuant to the BCRA Organic Chart, the BCRA is empowered to regulate national payment systems as well as the operation of credit cards, purchase cards, electronic money and similar methods of payments.
In recent years, the scope of supervision of the BCRA has progressively broadened in practice. While traditionally its scope of authority was limited to controlling the activity of banks (namely, the activity of financial intermediation involving public deposit-taking), in recent years it has extended its powers and enhanced its regulations over non-banking issuers of credit cards, non-banking providers of credit and, more recently, payment service providers (PSPs) that offer payment accounts. This new regime imposes: (1) a registration procedure (which is not strictly a licence); (2) local incorporation; (3) limitations on the ability of PSPs to manage, dispose and invest funds held on behalf of their customers; (4) reporting obligations; and (5) transparency and publicity standards.
vi Non-banking cash collectors
In line with the expansion of its scope of supervision, the BCRA recently began issuing certain isolated regulations for the activity of non-banking cash collection.12 The BCRA established a new regime for complementary non-banking agents that perform activities for banks (such as non-banking cash deposits). This regime is intended to only affect the activity of these non-banking collectors while they perform activities on behalf of banks (but not when they do it on behalf of other entities).
Conduct of business
The Superintendency, in its capacity as the banking system enforcement authority, performs formal inspections of all banking institutions to monitor their compliance with the legal and regulatory requirements established by the FIL and BCRA regulations. These include control of the fulfilment of the different informative regimes established by this entity.
If regulations are breached, the Superintendency may impose various sanctions, depending on the seriousness of the infringement. Sanctions range from warning calls to fine impositions, or even the revocation of a licence. In certain cases, non-compliance may result in the mandatory filing of a specific adequacy plan, which must be approved by the BCRA to remain operational (e.g., in the case of non-compliance with minimum capital requirements). In addition, financial entities may be sanctioned through the application of other regimes' general rules, such as the consumer's defence regime,13 or for a breach of any obligation protected by the Argentine Civil and Commercial Code, in which case they would be treated and judged as any other non-financial legal entity.
At the same time, financial institutions may be judged by criminal courts when they have performed a criminal offence as provided by the Argentine Criminal Code (e.g., the performance of non-authorised financial or securities intermediation).
Financial institutions are also subject to the foreign exchange criminal regime, which was created to reinforce the fulfilment of BCRA regulations on foreign exchange transactions through the imposition of criminal sanctions. Sanctions range from the issuance of a fine and the suspension from or impairment to operating as a financial institution, to the imprisonment of directors, managers or other legal representatives.
Furthermore, the FIL and BCRA communications regulate banking secrecy. These regulations ban the disclosure of passive operations (e.g., savings accounts, checking accounts, time deposits and other liability products) to ensure the confidentiality of information and documents related to a financial entity's client and certain transactions, but only regarding information referring to passive operations and to an identified or identifiable customer. Notwithstanding, there are some exceptions to this rule (e.g., judicial disposition). The sanctions applicable for violations of banking secrecy rules are those established by the FIL; these may also constitute a criminal offence.
In addition to their own equity, financial entities may also obtain funds from deposits (in pesos or US dollars) or investments from outside the financial sector and from other alternative sources, such as the issuance of bonds and by the performance of a public offering of their shares in the market.
The FIL includes, among financial entities' permitted activities, the capacity to:
- receive loans;
- receive deposits from the general public in local and foreign currencies;
- securitise their customers' debts; and
- acquire, place and trade with shares and debt securities in the Argentine over-the-counter market, subject to a report to the National Securities Commission (CNV).
They may also sell their assets through private transactions, provided that certain regulatory requirements are fulfilled.
Likewise, subject to the prior authorisation of the Superintendency, the following instruments are allowed as capital contributions: securities issued by the government, debt instruments issued by the BCRA and a financial institution's deposits and other liabilities resulting from financial intermediation, including subordinated obligations.
Furthermore, under certain circumstances, the BCRA authorises financial entities to carry out repurchase transactions, provided that determined requisites are observed. Certain financial entities may also obtain loans from the BCRA; the repayment of these loans shall pre-emptively occur when an entity's liquidity ratio exceeds 40 per cent. According to the BCRA's Organic Chart, this may provide advances or further discounts for financial entities with transitory liquidity issues. Moreover, in such transitory situations, the BCRA may assign, transfer or sell credits acquired from the affected financial institutions.
Control of banks and transfers of banking business
i Control regime
The FIL and BCRA communications regulate the reporting duties and approval conditions required for a change in financial entities' equity composition and the acquisition of financial entities.
Substantial modifications of equity composition
A negotiation of shares or other circumstances capable of producing a change in the qualification of, or that may alter the structure of the respective groups of shareholders of, financial entities must be reported. This obligation shall apply to sellers and purchasers of shares and to boards of directors of cooperative societies and their members.
Within 15 days of the performance of such reporting, detailed information of the operation must be provided to the Superintendency. The transaction (payment of the price, transfer of stocks, etc.) cannot be performed until a resolution is passed.
Authorisation is a condition precedent for a transaction to be enforceable and, once presented to the competent authorities, there is no legal time frame for the BCRA to decide on it.
The BCRA will analyse the information provided and will pass a resolution based on the convenience and opportunity of the operation and on the grounds of the precedents credited by the parties (regarding their previous conduct and sanction impositions). At the same time, the BCRA may also revoke authorisations granted if there have been fundamental changes in the basic conditions considered for the granting of such.
If granted, an authorisation to operate will depend on the suitability of the initiative, the characteristics of the project, the general and particular conditions of the market and the background and responsibility of the applicants, and their experience in financial activities. There are no specific instructions regarding how a detailed business report is to be presented to the Superintendency for its approval.
Changes in financial entities' equity composition
Legal entities that intend to acquire shares of financial institutions must be regularly constituted, and, in the case of foreign companies, must be registered with the corresponding corporate authority in their home jurisdiction. When an acquirer is a foreign financial institution, a certificate from the supervision authority of the country of origin must be presented granting its legal establishment in such country and crediting proper supervision to the enacting authority.
Acquisitions by financial entities
Financial entities shall report to the Superintendency prior to making commitments or undertaking negotiations aimed at acquiring shares of another financial institution in such a proportion as to enable it to exercise control when total deposits of the entity whose shares would be transferred exceed 2 per cent of the deposits of the financial system; total deposits of the entity whose shares would be transferred exceed 50 per cent of the total deposits of the acquiring entity; or when the entity that would acquire those shares has a rating of three to five with the Superintendency (see Section III.i).
Acquisitions by controlling entities of other financial entities
Companies that directly or indirectly control financial entities must report directly to the Superintendency prior to entering into commitments or negotiations aimed at acquiring, directly or through branches or subsidiaries, shares of another financial entity in such a proportion that allows them to exercise control for the welfare of society when any of the following situations occurs: the total deposits of the entity whose shares would be transferred exceed 2 per cent of the total deposits of the financial system; the total deposits of the entity whose shares would be transferred exceed 50 per cent of the total deposits of the entity already controlled; or when some of the financial entities controlled by the acquiring company of the shares of another financial institution have a rating of three to five with the Superintendency.
Other approvals for acquisitions of financial entities
There are some other notification duties and approvals necessary for the purchase of shares of a financial institution when such purchase implies a change of control, such as notification to the CNV and to the National Commission for the Defence of Competition (CNDC).
Pursuant to the applicable regulations, in the event of a change of control, the local licensed company will retain its licence. However, this company must promptly notify the CNV and any other relevant administrative authority of the change. The notification shall be performed immediately after the first binding document or memorandum of understanding has been executed. Otherwise, an administrative investigation might be started, and the CNV might apply warnings, fines and even the suspension of a licence.
In addition, unless a 'first landing exception' becomes applicable – that is to say, the purchasing group does not own shares of Argentine companies or Argentine assets – the transaction must also be submitted to the CNDC for approval. Even though it is not a condition precedent for closing according to the applicable law, an operation shall not take effect until the approval is received. Filing must be performed by any of the parties involved, within seven days of the relevant documents' execution date. The CNDC may reject a transaction or raise objections. In this case, a buyer will be requested to take measures for the transaction to be approved (e.g., sale of assets, partial divestiture).
There are no specific rules regarding banking acquisition structuring processes other than those explained above. Notwithstanding, it is important to highlight the fact that financial entities cannot constitute liens on their assets without the prior approval of the BCRA nor can they receive their own shares as guarantees.
ii Transfers of banking business
Bank business transfers do not have a specifically regulated process, and banks are allowed to sell or transfer portions of their business by single transactions as long as they do not constitute transfers of goodwill. Transfers of goodwill must be approved by the Superintendency.
The year in review
Following the goals and efforts completed throughout the past couple of years, regulations still aim to boost the financial industry to achieve financial and monetary stability and to modernise the banking system. This has been approached mainly through the reinstatement of certain foreign exchange controls, the BCRA's active intervention in the regulation of the economy and by several efforts undertaken to achieve financial inclusion, leading to the following changes.
- Some restrictions and requirements with regards to the flow of foreign currency out of and into the country have been put back into place to bolster stability.
- To encourage financial inclusion, the BCRA now regulates non-financial correspondents, thereby enabling financial entities to assign certain services to be rendered by other persons (individuals or entities) in their favour, especially in places in which financial entities do not have a physical presence.
- Likewise, the BCRA has recently begun regulating the activity of PSPs, mainly to govern digital wallet operators.
- Meanwhile, the BCRA is also continuing to adjust, by all feasible means, local regulations to align with international recommendations, such as Basel III (e.g., it has stated that the observance of the International Financial Reporting Standards by financial institutions is mandatory), to keep pace with global trends and regulations.
- In addition, the Argentine financial system has made significant progress in recent years in increasing minimum capital and cash requirements and strengthening compliance regulations, mainly in the anti-money laundering field, to comply with international standards.
Outlook and conclusions
During the past few years, the financial industry in Argentina has continued to evolve considerably. Even though the situation surrounding covid-19 accelerated the financial inclusion process, there is still much work to be done, not only towards improving financial inclusion, incorporating technology into banks' operations and expanding the size of the financial market, but also towards fighting inflationary pressure and achieving financial stability.
1 Pablo José Torretta is a partner and Francisco Grosso is an associate at Beccar Varela.
3 Argentine Fintech Chamber Report: Informe Ecosistema Fintech Argentino (2020), p. 94.
4 Law No. 21,526.
5 Law No. 24,144.
6 Law No. 26,831.
7 Law No. 25,246.
8 Law No. 25,065.
9 Law No. 25,326.
10 Law No. 25,156.
11 Law No. 24,240.
12 Non-banking cash collection refers to local non-banking collection networks that offer cash withdrawal services and are also authorised to receive cash deposits from the public, which are credited to clients' bank accounts.
13 The Consumer's Defence Act establishes the mandatory disclosure of the annual effective interest rate for financial operations for consumption and consumers' credit. Its omission will determine that the obligation of the borrower to pay interest will be adjusted to the annual average passive rate, published by the BCRA on the date of conclusion of the contract. By this Act, the BCRA is entitled to take the necessary measures to reinforce such obligations.