The Central Bank of Venezuela (BCV, for its acronym in Spanish) published a circular modifying the penalty regime applied to banks failing to comply with legal reserve requirements for funds kept on deposit at the BCV. The regulation, which is already in force, stipulates January 7 as the last of the three dates when banks need to apply the Initial Global Deficit (DGI, for its acronym in Spanish).
The DGI is an index which calculates the amount of reserves that banks have yet to place in the BCV, and institutions were able to choose between three dates to apply the DGI: October 25, 2019, November 18, 2019 or January 7, 2020. Banks can reduce their charges by using any of the deficit amounts on the three dates available in their favor.
If the amount not covered by the institutions is equal to or less than the DGI, a 126% annual rate penalty is applied. However, if it is higher, an additional financial cost is imposed on the uncovered amount calculated according to a formula using the rate applicable to the deficit plus the Investment Index (IDI, for its acronym in Spanish) established by the BCV.