BOARD OF DIRECTORS

BOARD RESOLUTION NO. 007/2024

SUBJECT: FINANCIAL ENTITIES MANAGEMENT - APPROVAL OF THE REGULATION ON INCENTIVES FOR THE RECOVERY OF CLAIMS OF THE CENTRAL BANK OF BOLIVIA.

VIEWED:

The Political Constitution of the State, of February 7, 2009.

Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia (BCB) and its modifications.

Law No. 1356 of December 28, 2022, on the General State Budget for the 2021 Management Period.

Law No. 1546 of December 31, 2023, on the General State Budget for the 2024 Management Period.

The Statute of the Central Bank of Bolivia, approved by Board Resolution No. 095/2022 of October 6, 2022.

Board Resolution No. 098/2022 of October 25, 2022, which approves the Regulation on the Reception and Administration of Credit Portfolios.

Board Resolution No. 125/2022 of December 27, 2022, which approves the Regulation on Incentives for the Recovery of Claims of the Central Bank of Bolivia.

Report BCB-GEF-SRRA-DRCA-INF-2024-4 of January 2, 2024, issued by the Financial Entities Management (GEF).

Report BCB-GAL-SANO-DLBCI-INF-2024-3 of January 2, 2024, issued by the Legal Affairs Management (GAL).

CONSIDERING:

That Article 327 of the Political Constitution of the State establishes that the BCB is a public law institution, with legal personality and its own assets.

That Article 1 of Law 1670 provides that the BCB is a State institution, of public law, of an autarkic nature, of indefinite duration, with its own legal personality and assets, and with its legal domicile in the city of La Paz.

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That Article 44 of Law No. 1670 of the BCB establishes that the Highest Authority of the Central Bank of Bolivia is its Board of Directors, which is responsible for defining its policies, specialized regulations of general application, and internal rules; as well as establishing administrative, operational, and financial strategies for the BCB, approving their respective short and medium-term programs.

That subsections a) and o) of Article 54 of Law No. 1670 of the BCB establish that it is within the Board of Directors' powers to issue regulations and adopt general decisions necessary for the BCB to fulfill the functions, competencies, and powers assigned to it by Law; as well as to approve, modify, and interpret the Statute and Regulations of the BCB, by two-thirds of the votes of all its members, without the need for any additional administrative act.

That Article 13 of Law No. 1356, on the General State Budget for the 2021 Management Period, grants incentives for the recovery of claims from non-affiliated credit portfolios owned by the BCB and received in administration by financial intermediation entities, pursuant to specific Laws, Supreme Decrees, and liquidation processes through the forgiveness of interest and other expenses with a balance to principal equal to or less than USD 80,000.00 (Eighty Thousand 00/100 United States Dollars) or its equivalent in national currency.

That subsection x) of the Second Final Provision of Law No. 1546 of December 31, 2023, on the General State Budget for the 2024 Management Period, provides for the validity of Article 13 of Law No. 1356 of December 28, 2020.

That subsections 1) and 30) of Article 10 of the BCB Statute determine as Board of Directors' powers to approve general decisions and issue regulations necessary for the BCB to fulfill the functions, competencies, and powers assigned to it by Law; to define BCB policies, specialized regulations of general application, and internal rules, as well as to monitor their execution; in addition to approving, modifying, and interpreting the Statute and Regulations of the BCB, by two-thirds of the votes of all its members, without the need for an additional administrative act.

That subsection 36) of Article 10 of the BCB Statute authorizes the alienation and administration of portfolios and assets received in payment in kind from banks in liquidation.

That Board Resolution No. 098/2022 of October 25, 2022, approves the Regulation on the Reception and Administration of Credit Portfolios.

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That subsection 1) of Article 5 of Board Resolution No. 098/2022 establishes among the functions and responsibilities of the Asset Recovery and Realization Committee, the evaluation of proposals for strategies and/or policies for the reception, administration, and recovery of the credit portfolio.

That Report BCB-GEF-SRRA-DRCA-INF-2024-4, from the GEF, concludes that Article 13 of Law No. 1356, in force as determined by subsection x) of the Second Final Provision of Law No. 1546 of December 31, 2023, provides for the application of incentives for the non-affiliated portfolio owned by the BCB and also for the portfolio administered by it, for credits whose balance to principal is equal to or less than USD 80,000 or its equivalent in national currency; from which the technical viability of the Draft Regulation on Incentives is established, recommending to the BCB Board of Directors its approval.

That Report BCB-GAL-SANO-DLBCI-INF-2024-3, from the GAL, concludes that the content of the Regulation on Incentives for the Recovery of Claims of the BCB, proposed by the GEF, is legally viable, as it does not contravene the legal framework, recommending to the Issuer Entity's Board of Directors its approval.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Approve the Regulation on Incentives for the Recovery of Claims of the Central Bank of Bolivia, in its eight (8) Articles, which form part of this Resolution as an Annex.

Article 2.- The Regulation on Incentives for the Recovery of Claims of the Central Bank of Bolivia will enter into force as of January 2, 2024.

Article 3.- The Presidency and the General Management are charged with the compliance of this Resolution.

La Paz, January 2, 2024

SIGNED. ROGER EDWIN ROJAS ULO, Oscar Ferrufino Morro, Gabriel Herbas Camacho, Gumercindo Héctor Pino Guzmán, Diego Alejandro Perez Cueto Eulert

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ANNEX

REGULATION ON INCENTIVES FOR THE RECOVERY OF CLAIMS OF THE CENTRAL BANK OF BOLIVIA

Article 1. (Object).

This regulation aims to govern the application of incentives for the recovery of claims from non-affiliated credit portfolios owned by and in administration of the Central Bank of Bolivia (BCB), in accordance with what is provided in Article 13 of Law No. 1356 of December 28, 2020, in force by mandate of subsection x) of the Second Final Provision of Law No. 1546 of December 31, 2023, on the General State Budget for the 2024 Management Period.

Article 2. (Scope of Application).

This Regulation applies to:

I. Non-affiliated credit obligations whose outstanding principal balance is equal to or less than USD 80,000.00 (Eighty Thousand 00/100 United States Dollars) or its equivalent in national currency from the credit portfolios corresponding to the following financial intermediation entities: Banco de Crédito Oruro S.A., Banco Potosí S.A., Banco del Progreso Nacional S.A.M., Cooperativa San José Obrero Ltda., Banco Boliviano Americano S.A. including the portfolio ceded by FONDESIF, BIDESA (in administration of the BCB), Banco Sur S.A., Mutual La Frontera, Mutual Manutata, Mutual Tarija, Mutual Del Pueblo, Cooperativa Trapetrol, and the credit portfolio of the Former INALPRE administered by the BCB.

II. Obligations from non-affiliated credit portfolios that the BCB receives under Supreme Decree No. 2068, during the validity of this Regulation.

III. Incentives may be applied to non-affiliated credits in execution, with judicial collection actions at any procedural stage, up until the judicial approval of the auction of the collateral, as well as to written-off credits.

For credits that have judicially approved auction of goods, incentives may be accessed through forgiveness, of the credit balance resulting from the amortization of the amount obtained from the auction of goods.

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Article 3. (Incentives for Recovery of Claims).

The incentives for the recovery of claims, through the forgiveness of current and penal interest, fines, commissions, and other accessory expenses, which the BCB applies to the credit portfolios mentioned in Article 2 of this Regulation, will be applied as follows:

Principal Balance expressed in USD	Forgiveness of Current Interest	Forgiveness of Penal, Moratory Interest, Fines, Commissions, Publications, and Forms
Up to 80,000	100%	100%

Article 4. (Payment Conditions).

I. The debtors or guarantors of the credit portfolios indicated in Article 2 of this Regulation must effect the cancellation of the credit in a single payment, which may be made in cash, deposit, or transfer.

II. In the event that debtors or guarantors have more than one obligation with the BCB, the forgiveness will apply individually per credit.

Article 5. (Payment Procedure with Incentives).

The payment with incentives will be subject to the following:

a) Interested parties wishing to avail themselves of the incentives must request the settlement of the debt as of the payment date.

b) Obligations in foreign currency may be cancelled in national currency at the official selling exchange rate in effect on the payment date.

c) Interested parties must make the payment at BCB cashier offices or through the operational system enabled by the BCB in the Financial System.

d) Subsequently, interested parties will send a copy of the cancellation receipt to the Financial Entities Management of the BCB via physical or electronic means; from that moment, they may request the Certificate of No Debt.

e) Upon verification of the debt payment, the BCB will proceed with the procedures to release the debtor and guarantors from the obligation.

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Article 6. (Subrogation).

The following may make payment with subrogation availing themselves of the incentives:

1. Guarantors.

2. Heirs of debtors and guarantors.

3. Co-owners when, as a result of some precautionary measure or judicial mortgage in the judicial execution of a credit, a property under the co-ownership regime has been encumbered.

In other cases of payment with subrogation made by third parties, the incentives established in this Regulation will not apply.

Article 7. (Exclusions from Incentives).

The incentives established in Article 3 of this Regulation will not cover the following concepts:

a) In the event of judicial processes, the payment of professional fees for external lawyers, nor judicial expenses during the processing of the credit collection process; these must be paid in full and will be included in the settlement.

b) Credit insurance (desgravamen).

c) Current interest on the credit portfolio of the Former BBA received in payment in kind for the financial support granted by the BCB.

d) Credits classified as affiliated.

Article 8. (Judicial Retentions).

Pending judicial retentions and/or deposits to be remitted, collected, and applied, cannot be considered in the settlement to be made for the forgiveness provided in Article 3 of this Regulation. These will be released via judicial means if the debtor pays the obligation.