Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 020/2018

SUBJECT: TREASURY MANAGEMENT – MODIFICATION OF THE CURRENCY MATERIAL ADMINISTRATION REGULATION.

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).
• The Statute of the Central Bank of Bolivia approved by Board Resolution No. 128/2005 of October 21, 2005 and its modifications.
• The Currency Material Administration Regulation, approved by Board Resolution No. 020/2016 of February 2, 2016 and its modifications.
• The Report from the Treasury Management BCB-GTES-SAMM-DAMM-INF-2018-10 of January 26, 2018.
• The Report from the Legal Affairs Management BCB-GAL-SANO-DLBCI-INF-2018-17 of January 29, 2018.

CONSIDERING:

That the Political Constitution of the State establishes in its article 328 that the attributions of the BCB, in coordination with the economic policy determined by the Executive Branch, in addition to those indicated by Law, include: determining and executing monetary policy, executing exchange rate policy, regulating the payment system, authorizing the issuance of currency, and administering international reserves.

That pursuant to articles 1 and 3 of Law No. 1670, the BCB is the sole monetary and exchange authority of the country with administrative, technical, and financial competence and specialized normative faculties of general application, being empowered to formulate policies in monetary, exchange, and financial intermediation matters.

That the aforementioned Law in its articles 10, 11, 13, and 54, subsections a), m), and o), establishes the functions of the BCB regarding the issuance of banknotes and metallic coins, as well as the attributions of the Board as the Highest Authority of the BCB, to authorize and supervise the printing, issuance, and destruction of currency material, being empowered to dictate, modify, and interpret norms and adopt general decisions necessary for their compliance, without the need for any additional administrative act, being able to approve, modify, and interpret the Statute and Regulations of the BCB, by two-thirds of the votes of all its members.

That pursuant to article 30 of Law No. 1670, all financial intermediation and financial services entities, whose operation is authorized by the

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Superintendence of Banks and Financial Entities, are subject to the normative competence of the BCB, with respect to their relationship as monetary, exchange, and payment system authority.

That Article 38 subsection f) of the aforementioned Law of the Central Bank of Bolivia establishes that in addition to what is provided in previous articles, the BCB may carry out other new operations that are compatible with the object of the BCB.

That article 67 of the Statute of the Central Bank of Bolivia establishes that the Treasury Management is responsible for establishing the requirements for the acquisition, distribution, destruction, and administration of currency material and for the custody of securities.

That the Treasury Management through Report BCB-GTES-SAMM-DAMM-INF-2018-10, recommends the modification of the Currency Material Administration Regulation in order to address the observations and requests of Financial Intermediation Entities referred to the specific parameters of the process of manual counting, classification, and destruction of currency material and the validity of the application of the "Manual for the Selection of Bolivian Banknotes".

That the Legal Affairs Management through Report BCB-GAL-SANO-DLBCI-INF-2018-17 concludes that the modifications of the Currency Material Administration Regulation in the terms expressed in Report BCB-GTES-SAMM-DAMM-INF-2018-10 are legally appropriate, being the competence of the Board of the Issuing Entity to consider its approval by two-thirds of the votes of all its members, in accordance with what is provided in subsection o) of article 54 of Law No. 1670 and numeral 29 of article 11 of the BCB Statute.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Modify article 4 (Deposits) and article 17 (Counting of Fit Banknotes) of the Currency Material Administration Regulation, with the following text:

Article 4. (Deposits).

SAYS:

Financial Intermediation Entities may make cash deposits in the BCB in national currency or United States dollars in the schedules defined by the BCB through an express circular issued by its General Management.

Banknote deposits shall be made in packages containing one thousand pieces of banknotes of a single denomination, ordered in ten bundles of one hundred pieces each. Each bundle of

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banknotes must contain cared banknotes; that is, all banknotes in the bundle in the same position and orientation. With the purpose of guaranteeing the circulation of new and good condition 10 and 20 Bolivianos banknotes, only unfit banknotes in these denominations may be deposited.

Deposits of coins in national currency require prior authorization from GTES, provided that they do not affect the availability in circulation of the respective denomination.

MUST SAY:

“Financial Intermediation Entities may make cash deposits in the BCB in national currency or United States dollars in the schedules defined by the BCB through an express circular issued by its General Management.

Banknote deposits shall be made in packages containing one thousand pieces of banknotes of a single denomination, ordered in ten bundles of one hundred pieces each. Bundles of unfit banknotes must contain cared banknotes; that is, all banknotes in the bundle must be in the same position and orientation. With the purpose of guaranteeing the circulation of new and good condition 10 and 20 Bolivianos banknotes, only unfit banknotes in these denominations may be deposited.

Deposits of coins in national currency require prior authorization from GTES, provided that they do not affect the availability in circulation of the respective denomination.”

Article 17. (Counting of Fit Banknotes).

SAYS:

The BCB may determine the verification and counting of packages of banknotes classified as fit, deposited by Financial Intermediation Entities, applying the same procedures established in article 14 of this Regulation for the counting of packages of unfit banknotes.

If in the counting process the equivalent of more than 1% of unfit and/or uncared banknotes is found, in the daily re-counted batch, the return of said batch will proceed, which, having been processed by the BCB, must be deposited again in the BCB on the same day.

MUST SAY:

“The BCB may determine the verification and counting of packages of banknotes classified as fit, deposited by Financial Intermediation Entities,

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applying the same procedures established in article 14 of this Regulation for the counting of packages of unfit banknotes.

If in the counting process the equivalent of more than 1% of unfit banknotes is found, in the daily re-counted batch, the return of said batch will proceed, which, having been processed by the BCB, must be deposited again in the BCB on the same day.”

Article 2.- This Board Resolution shall enter into effect from March 19, 2018.

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

La Paz, January 30, 2018

Pablo Ramos Sánchez
Abraham Pérez Alandia
Gabriel Herbas Camacho
Luis Baudoin Olea
Ronald Polo Rivero
Sergio Velarde Vera