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The Check is not in the Mail—Banking in Brazil
by Danilo Nogueira | |
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Speaking of Banco do Brasil, please, do not confuse it with Banco Central do Brasil. The former is a banco múltiplo (universal bank) and you can have a checking account with them, or buy their shares in the stock exchange, if you have the inclination, whereas the latter is the Central Bank and they certainly do not want your business and don't sell shares. The Brazilian banking market used to be dominated by three very large banks: Itaú, Bradesco and Unibanco. They have thousands of agências ("storefront" agencies) and postos ("customer-site" agencies)—not to mention the caixas automáticos (ATMs). Banco do Brasil is also very important, but to a large extent because it handles Government business—and is controlled by the Federal Government. Smaller groups are being gobbled up by the big ones or by foreign groups. For instance, Santander, a Spanish group, recently bought the whole of Banespa, the once-powerful Banco do Estado de São Paulo, and is now one of the big ones. Of course, Banco do Estado de X de does not mean State Bank, but bank controlled by the government of the state of X. All Brazilian banks are federal and all of them may have branches wherever they care to set up shop. It's just that, for a long time, having its own bank was a status symbol for any state. In addition, every self-respecting banco do estado needed a well-appointed branch in São Paulo, either in the centro velho (older downtown area) or on Avenida Paulista, a three-kilometer stretch that used to concentrate much of Brazil's wealth. Bancos do estado have become something of a burden of late and are being auctioned off to the highest bidder, to the dismay of bancários (bank employees) and of all of those who believe the State knows better. All large banks (not only the big three) keep busy Internet sites for the obvious reason that Internet transactions are cheaper. Brazilians do not understand the concept of mailing a check. Most of our bills now come in the mail and are printed on a standard boleto bancário (bank payment slip). To pay them, you can (1) go to a walk-in agency and give them to the caixa (teller) together with a check, cash or your cartão magnético (bank card) or (2) you can pay it at an ATM using the código de barras (bar code) identification all those forms carry, or (3) you can pay it from home or the office, using the Internet. Utility and some other bills are paid by débito em conta (charged to your checking account). Until the data do vencimento (due date), bills can be paid to any bank. After due date boletos bancários have to be paid to the issuing bank and you will pay juros de mora (finance charge). This is the procedure usually called cobrança bancária (collection through a bank). Very small businesses, such as my translation company—which is only me—will mail a bill directly to customers. The bill, officially a nota fiscal is handwritten on an official printed form and contains the number of my bank account. Customers simply transfer money from their accounts to mine. But this is considered proof that I am very small fry. "Duplicatas" Long before our banking system went electronic, people were entrusting their receivables to banks for collection. Now, this deserves a stop for breath, because the Brazilian procedure differs from what is considered standard in most countries. Most enterprises vendem a crédito (sell on credit). Crédito entails cobrança (collections). The oldest system of collection is sending a cobrador to the customer with the fatura (invoice) in hand. Alternatively, you could have the customer go to your place to pay. This is called cobrança em carteira (direct collection?). If the customer was in a different city, this did not work, so people began to send a duplicata (copy of the invoice) to their customers and instruct them to pay the bill to a specified bank. Then, they began to send the bills directly to the bank with a borderô (listing) and instruct the bank to mail the bills to the customers, collect the payment, stamp the duplciata PAID and transfer the payment to the creditor. The system was extended little by little and at least in the larger towns and cities; cobradores are now nearly extinct. A cobrador today generally is someone who presses delinquent debtors for payment, not someone who collects bills when they are due. "Desconto" Then, merchants hungry for credit started asking their banks for an advance on the proceeds of the collections. The banks obliged, but of course, they never advanced the total billed: the amount advanced was always net of a desconto (discount) for interest and that is why the operation is called descontar uma duplicata (to discount a bill, to get an advance on a bill). Of course, the merchant was co-obrigado, meaning the bills were cedidas (assigned) to the bank com co-obrigação (with recourse, i.e., notice that the bank held the merchant responsible for the payment). In short, if the debtor did not pay, the bank would return bill to creditor and claim a refund. However, descontos became a habit with Brazilian merchants and it became a sort of revolving agreement. In the beginning, Brazilian banks demanded duplicatas com aceite (accepted bills). An acceptance, here, means a signature of the debtor on the face of the document (not on the back—that would be an endorsement) meaning "yes, I recognize this as a legitimate bill and will pay it when it comes due." So, that duplicata had two signatures on its face: the merchant's and the debtor's. This is technically known as a "two-name paper" in English, but the term is not in common use and the concept is not familiar to most Americans. Having the bill accepted by the debtor, however, was judged too cumbersome and now banks will discount unaccepted bills—but retain the right of recourse. Recently, fatorização (factoring) became popular, but most people still think in terms of descontos. The case of the hole in the wall The other day someone wanted to know what is the Brazilian for a hole-in-the-wall cash dispenser. Well, there isn't such thing in Brazil. For two reasons: first, we use full-service ATMs and not cash dispensers; second, Brazilians like the relative privacy and security of a secluded ATM. So many Brazilian ATMs are installed in booths on the sidewalk, with doors that stay closed. The nearest thing to a hole-in-the wall ATM is to be found in bank agency lobbies—but I have never seen anyone standing on the sidewalk and withdrawing cash from a hole in the wall in Brazil, as I have seen in some other countries. Compensação (Clearing) If you deposit a check on Monday, the amount will be shown in your statement as bloqueado (unavailable) on Tuesday and Wednesday, but must be liberado (available) on Thursday at latest, depending on the amount involved, if the check is da mesma praça (against a bank in the same clearing district). Because all banks are members of the câmara de compensação (clearinghouse) the concept of correspondent bank as understood in many countries is unknown. The "pré" Under Brazilian law, a check is a saque a vista (sight draft), meaning that the holder can claim payment at any time and the Bank is required to honor it, provided the issuer has funds. In practice, we often write cheques pré-datados (post-dated checks, future-dated checks) meaning a check that instead of bearing the date of issue bears some future date. Notice that we call it a predated check. This practice has many complications, because it finds no support in law. So that if you give someone a predated check and the bastard decides to cash it before the agreed date, there is nothing you can do. So this particular check, or some other check you wrote, may voltar or ser devolvido ("bounce"). Notice that Brazilian banks never return paid checks to the issuer. When a Brazilian bank returns a check, the check is returned to the payee, because the drawee bank refused to honor it. Illegal as it is, the practice is condoned by most banks and many of them run carteiras de pré-datados (future-dated check portfolios), which accept those checks, keep them safe and present them for collection on the appropriate dates. Banks will even advance part of the amount to the depositor. Many merchants, however, prefer to keep the checks in a drawer for future presentation, in which case a note will be pinned to the check, showing the day for presentation. A form for this may be bought as stationery stores. The form is very simple: it says bom para depósito em ___ (good for depositing on ___) and has a blank to be filled in with the date. Beneath the blank, in black letters: não depositar no dia anterior (do not present on the preceding day). This is often known as a cheque inglês form, on the grounds that it is the way the English do business. Even gas stations will accept prés. In fact, many gas stations will hold a check for as long as 30 days. There is nothing you can do about a pré that is apresentado antes da data (presented before the agreed date). Worse, Brazilian banks are required to stamp a returned check with the reason for dishonoring it. No use trying to talk a friendly relationship manager into stating that she did not recognize the signature: whatever happens, if the check has no funds when it is presented for payment, the bank stamp must make that clear. This is the dreaded alínea 11—formally point 11 and refers to a list of reasons for returning a check included in a Central Bank circular. If the check is dishonored a second time, it gets a super-dreaded alínea 12, and then the debtor must contact the creditor, refund the creditor for the value of the check, collect the check as a receipt and show it to the bank—or his account will be closed and his name reported to the Central Bank. Lots of nasty things may happen thereafter. Let us change the subject. Other kinds of check If your bank account has always been in the U.S. you probably have never seen a cheque cruzado (crossed check). This is a check with two slanted lines across it like this: // meaning it must be paid into a bank account. Crossed checks will not be cashed by a bank. You have to deposit them to your account and they must be cleared. A check may be stamped somente para depósito na conta do favorecido (account payee only) in which case it cannot be deposited in any other account. Lest I forget, a cheque cancelado is a check annulled for some reason and thus not accepted by any bank. A cancelled check on the other hand, is a cheque compensado if it is gone through the câmara de compensação (clearinghouse) or, to use a more general term, pago pelo banco. By the way, in order to reduce tax evasion and money laundering, checks generally must be nominais (nominative) and not to order, because there is a tax on checks cleared. However, most people make them ao portador (payable to bearer) and the last bearer simply fills in the blank with his name. We believe taxes are bad for business. Checks with insufficient funds are more common than we would like them to be. So are stolen checks. In theory, store cashiers should confront checks with the issuer's ID and copy the ID number on the back of the check to make it easier to track the issuer. In fact, Brazilians are not really security-conscious and appearing to be suspicious is generally considered rude. So that the cashier usually asks the issuer for the ID number, but does not check it against the ID card. In the past, we often took a check to the bank to be visado (certified) meaning that a manager would put a stamp on the face of the check and sign it to certify that it had funds. Although we still refer to cheque visado, banks will now use cheques administrativos (cashier's checks) instead. Those are checks issued by the bank against itself. The many things you can do at a Brazilian Bank The number of things you do in a Brazilian Bank is astonishing. For instance, tax returns are either filed through the Internet or at a Bank. Taxes are usually paid into a bank account by means of a guia de recolhimento (tax deposit form) filled by the taxpayer. Or you can buy insurance. In fact, it is very difficult to obtain anything from a Brazilian bank unless you agree to buy insurance from it. Or a private pension plan. Or perhaps a computer. This is called unfair competition by everybody except by bankers who cannot see what is wrong with it. A final note on the role of women Brazilian banks are the realm of women. Women began in the back office, moved to the front office, became cashiers and are now relationship managers and department heads. Some of them are already in the executive suite. I have no official statistics, but in the agencies I know, approximately nine out of every ten employees are female. Very professional, very knowledgeable, very capable. Why did my relationship catch me by the elbows and offer her cheek for me to touch with mine while both of us kissed the air? Because we are Brazilians and this is Brazil. One of these days, I will return to this matter. |
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he reasonably well-dressed woman in her thirties rises to welcome me. We hold each other by the elbows and our cheeks touch twice, then we sit down. She is my gerente de conta, or what would be called my relationship manager in a U.S. bank.