BANKING MEASURES INTRODUCED TO ADDRESS THE COVID-19 CRISIS IN ARGENTINA

As the whole world is struggling to manage the COVID-19 pandemic and the resulting economic crisis, the Argentine banking and financial sector has introduced a number of measures to attenuate the impact on struggling companies as well as citizens adversely affected by the crisis.

Although banks never stopped operating, they remained closed for public attention since March 20, amid the mandatory national lockdown declared by the Government; the Argentine Central Bank (“BCRA”) established that all financial entities should remotely continue to provide the services that they usually furnish.

Banking was not declared an essential activity from the outset and should have been, in order to guarantee appropriate attention to the public, especially for those sectors of the population that do not have a debit card for withdrawing funds at ATMs or access to online banking. This situation mainly affected older adults, retirees and people who receive state aid. On April 3, the first day banks opened since March 20, Argentina’s elderly -the highest-risk group for coronavirus complications- crowded in long lines to withdraw pensions as banks scrambled to keep up with demand and extended their hours through the weekend.

The BCRA later introduced an electronic appointment system using the numbers on a citizens' DNI identification cards, so that limited amounts of people can go to the banks each day.

In these unprecedented times, the BCRA has taken measures aimed at encouraging bank lending through:

(i) lower reserve requirements on bank lending to households and Small and Medium Enterprises (SMEs);

(ii) regulations that limit banks’ holdings of central bank paper to provide space for SME lending;

(iii) temporary easing of bank provisioning needs and of bank loan classification rules (i.e. extra 60 days

to be classified as non-performing);

(iv) a stay on both bank account closures due to bounced checks and credit denial to companies with

payroll tax arrears; and

(v) Zero-interest loans for self-employed workers and workers under the simplified tax regime.

The BCRA Bank has also:

(i) established that during the health emergency, transactions in ATMs operated by financial entities

are free of charge and commissions;

(ii) continued its policy of reducing the cap on the interest rate to finance balances of credit card

statements, setting it at 43% nominal annual for balances as of April 13th, 2020;

(iii) provided that credit card statements expired between April 1st and April 12th, 2020 could be

canceled on day 13th of the same month, for the same amount and without any extra charge;

(iv) established that the unpaid balances due to maturities operated between April 13th and April 30th, 2020

must be automatically refinanced for at least one year, with a grace period of 3 months and in 9

equal and consecutive monthly installments, to accrue only compensatory interest, without any extra charge;

(v) expanded the limit to US$ 200 for cash withdrawals from foreign ATMs in non-bordering

countries to facilitate assistance to Argentine citizens abroad and individuals were enabled to

transfer foreign currency from local accounts to remittance accounts abroad for up to the equivalent

amount of US$ 500 per calendar month; 

(vi) extended the period for the presentation of common checks and deferred payment checks by 30 days,

as well as admitting a second presentation for checks rejected due to “lack of funds”, except in

the case of ECHEQs.

However, the banking and financial sector has still to address the development of an electronic payments policy that encourages the use of debit card payments, bank transfers and online banking in order to avoid the use of cash payment as the main form of payment.

The BCRA should seize the chance to further develop fintech and digital banking instruments such as virtual wallets. The impact of mobile or electronic solutions in Argentina could be immense, considering that a significant part of the population is still out of the financial system or is virtually disconnected from it.

In order to prevent crowding in bank premises, enabling interoperability between virtual and banking accounts is essential as well.

Carlos E. Alfaro cealfaro@alfarolaw.com and Laura LaFuente LLaFuente@alfarolaw.com