BOARD OF DIRECTORS

BOARD RESOLUTION NO. 037/2022

SUBJECT: FINANCIAL ENTITIES MANAGEMENT - REGULATIONS OF 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 the Central Bank of Bolivia (BCB), dated October 31, 1995, and its amendments.
• Law No. 1356 of December 28, 2020, General State Budget Law for Management 2021.
• Law No. 1413 of December 17, 2021, General State Budget Law for Management 2022.
• Board Resolution No. 013/2021 of January 12, 2021, which approves the Regulation for the Administration and Recovery of Credit Portfolios.
• Report BCB-GEF-SRRA-DRCA-INF-2022-17 of April 21, 2022, issued by the Financial Entities Management (GEF).
• Report BCB-GAL-SANO-INF-2022-72 of April 22, 2022, 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, within the framework of the State's economic policy, it has the function of maintaining the stability of the internal purchasing power of the currency, to contribute to economic and social development.

That Article 1 of Law No. 1670 of the BCB, modified by Article 67, section A3, numeral 1 of Law No. 1864 of June 15, 1998, states 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 legal domicile in the city of La Paz. It is the sole monetary and exchange authority of the country with administrative, technical, and financial competence and specialized normative faculties of general application.

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That Article 44 of Law No. 1670 provides that the Board of Directors of the BCB is responsible for establishing the administrative, operational, and financial strategies of the BCB.

That subsections a) and o) of Article 54 of Law No. 1670 establish as attributions of the Board of Directors to issue norms and adopt general decisions that are necessary for the BCB to fulfill the functions, competencies, and faculties assigned to it by the Law, and 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 subsection y) of the Second Final Provision of Law No. 1413 of December 17, 2021, General State Budget Law for Management 2022, makes effective Article 13 of Law No. 1356 of December 28, 2020.

That Article 13 of Law No. 1356 of December 28, 2020, General State Budget Law for Management 2021, grants incentives for the recovery of claims from non-affiliated credit portfolios owned by the Central Bank of Bolivia and received in administration by financial intermediation entities, pursuant to Laws, Specific Supreme Decrees, and through liquidation processes via the forgiveness of interest and other expenses with a balance to capital equal to or less than USD 80,000.00 (Eighty Thousand 00/100 United States Dollars) or its equivalent in national currency.

That subsection a) of Article 5 of Board Resolution No. 013/2021 of January 12, 2021, approves the Regulation for the Administration and Recovery of Credit Portfolios; as well as, establishes among the functions and responsibilities of the Recovery and Asset Realization Committee, the definition of strategies, policies, and/or guidelines for management administration.

That Report BCB-GEF-SRRA-DRCA-INF-2022-17 of April 21, 2022 from the GEF concludes that in compliance with Article 13 of Law No. 1356, effective by subsection y) of the Second Final Provision of Law No. 1413 of the General State Budget Law for Management 2022 dated December 17, 2021, it is necessary to have a Regulation that allows the implementation of incentives for the recovery of claims of the BCB, improving incentives so that debtors have greater motivation to pay their debts, reducing the growing deterioration of the portfolio, and not losing the interest in payment; moreover, continuity is given to collection actions; therefore, it recommends to the Board of Directors of the BCB the approval of the aforementioned regulation.

That Report BCB-GAL-SANO-DLBCI-INF-2022-72 of April 22, 2022 from the GAL concludes that the proposal for Board Resolution that approves the "Regulation of Incentives for the Recovery of Claims of the Central Bank of Bolivia," proposed by the

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Financial Entities Management, does not contravene the current legal order; therefore, it is legally appropriate, recommending to the Board of Directors of the BCB its approval.

THEREFORE, THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:

Article 1.- Approve the "Regulation of Incentives for the Recovery of Claims of the Central Bank of Bolivia" within the framework of Article 13 of Law No. 1356 of December 28, 2020, effective by subsection y) of the Second Final Provision of Law No. 1413 of December 17, 2021, General State Budget Law for Management 2022, in its eight (8) Articles which form part of this Resolution as an Annex, with validity until December 31, 2022.

Article 2.- Repeal Board Resolution No. 008/2022 of January 11, 2022.

Article 3.- This Resolution shall enter into force from its publication.

Article 4.- The Presidency and General Management are charged with the execution and compliance of this Board Resolution.

La Paz, May 03, 2022

SIGNED: OSCAR FERRUFINO MORRO, Gabriel Herbas Camacho, Gumerindo Héctor Pino Guzmán, Diego Alejandro Pérez Cueto Eulert.

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ANNEX

REGULATIONS OF INCENTIVES FOR THE RECOVERY OF CLAIMS OF THE CENTRAL BANK OF BOLIVIA

Article 1. (Object).

This regulation aims to regulate 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, effective by mandate of subsection y) of the Second Final Provision of Law No. 1413 of December 17, 2021, of the General State Budget Law for Management 2022.

Article 2. (Scope of Application). This Regulation applies to:

I. Credit obligations whose outstanding balance to capital is equal to or less than USD 80,000 (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, BIDES A (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 credit portfolios that the BCB receives within the framework of Supreme Decree No. 2068, during the validity of this regulation.

Incentives may be applied to credits with judicial collection actions at any procedural stage, up until the judicial approval of the auction of the guarantee.

For credits that have judicially approved auction of goods, incentives may be accessed through forgiveness, only for the balance of the credit that results once the amount resulting from the auction of goods has been applied.

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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 according to the following scale:

Balance to Capital expressed in USD	Forgiveness of Current Interest	Forgiveness of Penal, Moratory Interest, Fines, Commissions, Publications, and Forms
Less than or equal to 5,000	100%	100%
Greater than 5,000 up to 80,000	80%	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) Those interested in availing 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 in BCB cashier offices or through the operational system enabled by the BCB with the Financial System.

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

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

Article 6. (Subrogation).

In the case of payment with subrogation, the incentives established in this Regulation will not apply.

Article 7. (Concepts Not Included in Incentives).

The incentives established in Article 3 of this Regulation will not contemplate 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, which must be paid in full, and will be included in the settlement.

b) The life insurance (desgravamen).

c) Current interest from the credit portfolio of the former BBA received in payment in kind due to the financial support granted by the BCB.

d) Credits classified as affiliated that were delivered to the BCB in payment in kind.

Article 8. (Judicial Retentions).

Pending judicial retentions and/or deposits to be remitted, collected, and applied, may be considered in the settlement to be made for the forgiveness provided in Article 3 of this Regulation. These will be released judicially if the debtor pays the obligation.