Today, Executive Orders 27/2018 and 30/2018 were published in the Official Gazette, as part of a process of simplification of the State that aims at reducing bureaucracy and implementing straightforward compliance policies that generate benefits for the population, thus, eliminating unnecessary burdens and improving the daily life of citizens and their businesses.
These executive orders include six measures that improve the functioning of the financial system, encourage competition, reduce costs and foster financial inclusion through access to equitable and quality financial services, removing access barriers to the most vulnerable sectors.
Firstly, new methods are enabled for the remote execution of contracts for credit cards, checks, bills of exchange, and promissory notes in a reliable and safe environment for the parties involved. For instance, this will allow financial institutions to issue e-checks. This will also allow remote access to financial services, providing significant capillarity to the financial system and allowing access to credit across the entire country, simplifying processes that are currently cumbersome.
The balance of real property sales contract may also be financed in units of purchasing power (unidades de valor adquisitivo, UVAs) or housing units (unidades de vivienda, UVIs). In this way, real estate developers will be able to provide loans for a pre-construction sale at a lower and adjustable fee, allowing a significant portion of the population to access these loans, as is the case with mortgage loans.
In addition, it is established that the equivalent of three times the average salary received by a worker in the last six months cannot be seized from their salary account. This increases the credit quality of around nine million salary account holders, and thus improves their access to credit. Regarding foreign exchange activities, and with a view to continuing streamlining these transactions as it has been done by the BCRA since December 2015, the law on foreign exchange houses and agencies has been amended to provide more flexibility to the system, encourage competition through the entry of new traders into the forex market, and reduce their costs. This change aims at creating a competitive and efficient forex market, which may provide solutions to those who need to exchange pesos for another currency in a safe and accessible way—at all times, in common places and on any day of the week. Bureaucratic formalities for the export of foreign banknotes are also eliminated.
Finally, a regulatory cap on the interest rate that remunerates bank deposits covered by the deposit insurance scheme has been removed. This enables and encourages competition among banks regarding savings accounts and current accounts. It will also increase the size of the financial system through better yields to depositors. This change does not affect in any way the maximum amount covered by the deposit insurance, which remains at ARS450,000.
The above measures are framed within the continuous pursuit of efficiency, quality, transparency, and competition of the financial system, with the goal of achieving sustained, solid, and inclusive growth.
