Brazil’s central bank has published regulations governing a new methodology for calculating the minimum limit of paid-in capital and net worth of financial institutions (FIs) and other institutions authorized to operate.
With the new regulation, the definition of minimum share capital and net worth values for financial institutions and other institutions authorized to operate by the central bank will now primarily take into account the activities actually carried out, and no longer the specific type of institution.
In addition to the capital required according to the activities, the methodology provides for a portion of the minimum capital to cover the initial cost of operation and the costs associated with services that are intensive in technological infrastructure. The first portion applies to all institutions, according to their complexity, while the second applies only to institutions that provide services requiring intensive use of technology, as defined in the BCB Resolution.
Finally, the new regulation requires an additional capital component from institutions that use the word ‘bank’ or any term that suggests it in their name, whether in Portuguese or another language.
Validity and transition
Both resolutions come into effect immediately. However, to allow institutions already in operation — as well as those with requests for authorization or expansion of activities still under review by the central bank — to adjust to the new rules, there is a transition schedule through to end-2027.
Read the full release (Portuguese)