The Central Bank of Argentina has been reformed to broaden its mandate beyond monetary stability to also promote economic development and employment. It can now lend directly to the government and provide funds to domestic banks for long-term productive investment. The Central Bank's lending policy sets limits on banks' lending to individual clients based on the client's equity and ability to repay to avoid excessive risk. It also establishes guidelines for different types of loans like mortgages, consumer loans, and construction loans.

1. LENDING POLICY OF BANKS IN
ARGENTINA
By: Anuradha Parihar

2. INITIATION OF POWER TO CENTRAL BANK OF
ARGENTINA
 the government of Argentina has fought against this
neo-liberal “conventional wisdom” and broadened
the mandate of the Argentine Central Bank to use
more tools to support credit allocation to promote
productive investment and job creation
 The Central Bank reform has instituted a triple
mandate, which includes monetary
stability, financial stability and economic
development with employment creation and income
equality.

3. POWERS OF THE CENTRAL BANK UNDER NEW
REFORMS
 it allows the Central Bank to lend directly to the
government up to 12% of the monetary base
 advance funds that correspond to no more than 10% of
the government revenue in the previous 12 months.
 It also allows for the use of international reserves for the
payment of the foreign debt obligations of the national
government, eliminating some restrictions that were in
place over the use of international reserves.
 most importantly, the reform allows the bank to provide
funds for domestic banks and other financial institutions
involved in the financing of long-term productive
investment.

4. CENTRAL BANK OF ARGENTINA: LENDING
POLICY
1. Apply for graduation Foreign Credit
 The credit support, in national or foreign currency, each
financial institution will not grant exceed 50% of
stockholders' equity clients, whether natural or legal
persons, groups or economic groups, maximum ratio in
the case of related borrowers will be 25%
 Within these ceilings assistance, institutions must weigh
the ability of demanded payment of Credit and analyze
the emerging risk of each assignment to demand the
creation of guarantees they deem appropriate. Also be
considered as a reasonable involvement in the entire
financial system, not to exceed a ratio around concept
100% of the assets of the customer

5. 2. Operations included.
The ratios indicated in the previous paragraph are
applicable to financial operations financing-both
those granted directly and incorporated into the
assets as result of portfolio purchases to other
entities,

6. 3. Operations not included
 Credit assistance destined for execution of investment
projects.
 Mortgage loans for homeownership and permanent end
users, which has been granted in compliance with a
sufficient margin of security against an appropriate
valuation of encumbered assets and ability to pay
pondering income from regular borrowers, so the initial
involvement does not exceed 30% of the per-
perceptions of the owner and the family group partner.
 Personal and family loans granted on the basis of ability
to pay services by users of your regular income
derivatives, when such subscriptions are not exceed, at
the time of the agreements, the degree of imputation
noted in the previous section

7.  The seasonal credits, provided that, in addition to
the assistance provided by other items, do not
exceed the above annual average proportions and
intended to serve cyclical extraordinary
needs, which must not be greater than one year
 Loans to construction companies linked to the
financing of public works CAS

8. SOME OTHER LENDING POLICIES
 The entities shall consider the capital, reserves and
retained earnings in adjusted values ​at the end of last
financial year, according to auditor's report states
external accordance with generally accepted auditing
standards, and certification of the corresponding
Professional Council in the case of corporations and, for
the rest of the legal and natural persons, certified public
accountant, or equity that arising from the
demonstrations of goods when not worn ledgers under
the laws that govern matter.
 They must also state that the property in question to
determine the aforementioned responsibility is linked to
the activities for which assistance is requested.

9. DISTRIBUTION OF LOAN PORTFOLIOS.
 Complementary to the precautions to be observed
in accordance with the other instructions,
institutions shall maintain adequate distribution of
their loan portfolios, so that there are no significant
concentrations in certain sectors of economic
activity