Banco Central do Brasil has announced a host of new banking rules, including lower reserve requirements and a cap on debit card transaction fees, in order to boost liquidity and competition in the sector.
Most notably, the central bank said it will lower reserve requirements on savings and checking accounts to 25% from 40%. Reserve requirements for rural savings accounts will fall to 21% from 20%, while those for other savings accounts will drop to 20% from 24.5%.
The measures, which will take effect between late April and early May, should help free up 25.7 billion Brazilian reais in funds for new lending, the central bank said.
It noted that the changes will see reserve requirements on savings accounts return to levels last seen before the 2008 global financial crisis, adding that they have the potential to reduce the cost of credit in Brazil.
At the same time, the central bank approved a resolution that prohibits banks from restricting access to certain operations for third-party payment processing firms. These operations include the issuance of payment tickets and transfers between accounts within the same institution, among others.
"Payment institutions and non-bank institutions need to be able to afford cheaper and more efficient products and services, to access services and instruments for the transfer of funds operated by commercial and multiple banks," the monetary authority said. Most aspects of this resolution take effect on July 2, while the rest will be implemented starting from November.
The central bank also introduced an 80-basis-point cap on debit card transaction fees, effective Oct. 1, aiming to foster innovation and competition by simplifying rules for small electronic payment card companies.
In announcing the cap, which will reduce the average fee paid to banks to 50 basis points from the current average of 82 basis points, the central bank noted that the use of debit cards in Brazil has grown at a rate of 18% per year during the last decade.
In a research note, Moody's said the cap on debit card fees is a credit negative for Brazil's banking sector as it will reduce banks' fee revenue from such transactions by roughly 40%.
According to the rating agency, this new rule will negatively impact Brazil's biggest banks, including Itaú Unibanco Holding SA, Banco Bradesco SA, Banco do Brasil SA, Banco Santander (Brasil) SA and Caixa Econômica Federal, which together account for 95% of the banking system's card business market share.
As of March 28, US$1 was equivalent to 3.34 Brazilian reais.