BOARD OF DIRECTORS

BOARD RESOLUTION NO. 044/2023

SUBJECT: ECONOMIC POLICY ADVISORY AND FINANCIAL ENTITIES MANAGEMENT – AMENDMENT OF ARTICLE 4 OF BOARD RESOLUTION NO. 043/2023.

VISTOS (VIEWED):

• Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia and its modifications.
• Law No. 393 of August 21, 2013, on Financial Services.
• Board Resolution No. 095/2022 of October 6, 2022, which approves the Statute of the Central Bank of Bolivia.
• Board Resolution No. 076/2022 of August 26, 2022.
• Board Resolution No. 036/2023 of February 16, 2023.
• Board Resolution No. 043/2023 of February 27, 2023.
• Report BCB-APEC-INF-2023-6 of March 1, 2023, from the Economic Policy Advisory and the Financial Entities Management.
• Report BCB-GAL-SANO-DLBCI-INF-2023-74 of March 1, 2023, from the Legal Affairs Management.

CONSIDERING (CONSIDERATIONS):

That Article 1 of Law No. 1670 of the Central Bank of Bolivia, modified by Article 67, section A3, item 1 of Law No. 1864 of June 15, 1998, on Property and Popular Credit, determines that the BCB is a State institution, of public law, autonomous in 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 regulatory powers of general application.

That Article 7 of Law No. 1670 determines that the BCB may establish Legal Reserves mandatory for Banks and Financial Intermediation Entities (EIFs). Their composition, amount, method of calculation, characteristics, and remuneration shall be established by the Board of Directors of the Bank, by an absolute majority of votes. The control and supervision of the Legal Reserve shall correspond to the current Supervisory Authority of the Financial System.

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That Article 37 of Law No. 1670 establishes that the BCB shall be the depository of liquid reserves intended to cover the Legal Reserve and to attend to the payment system and other operations with the BCB of EIFs subject to the authorization and control of the Supervisory Authority of the Financial System.

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

That subsections a) and i) of Article 54 of Law No. 1670 indicate as attributions of the BCB Board of Directors to issue regulations and adopt general decisions that may be necessary for the Issuing Entity to fulfill the functions, competencies, and powers assigned by Law; to fix and regulate the administration of the Legal Reserve to which banks and other financial entities shall be subject, disposing of measures for its compliance; 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 an additional administrative act.

That Article 430 of Law No. 393 determines that the BCB may grant liquidity credits to EIFs with the guarantee of the constituted Legal Reserve, as well as with other guarantees determined by the Issuing Entity, in accordance with a regulation approved by its Board of Directors.

That items 1) and 7) of Article 10 of the BCB Statute determine that the Board of Directors of the Issuing Entity has the attributions to approve general decisions and issue regulations that may be necessary for the BCB to fulfill the functions, competencies, and powers assigned to it by Law; to establish by absolute majority of votes, Legal Reserves mandatory for EIFs and to approve their composition, amount, calculation, characteristics, forms of administration, custody, and remuneration, in accordance with the Regulation.

That Article 24 refers that resolutions and decisions of the Board of Directors are adopted by a simple majority of votes of the members present in a meeting, except in cases where Law No. 1670 or this Statute require qualified majorities.

That Article 26 of the Statute of the Issuing Entity stipulates that the Board of Directors pronounces itself on matters within its competence through resolutions. It may also do so through decisions that shall be expressly recorded in the minutes. Likewise, every draft resolution of the Board of Directors must be motivated and justified by a technical report from the Management or Managements

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responsible for the subject matter of the resolution and by a report from the Legal Affairs Management. These reports must be submitted to the Board of Directors by the General Management with its recommendation.

That the Legal Reserve Regulation for Financial Intermediation Entities, approved by Board Resolution No. 076/2022 of August 26, 2022, provides in its Article 1 that its object is to fix and regulate the administration of the Legal Reserve and the resources resulting from its modification, in order to have instruments of monetary regulation and preservation of the stability of the financial system.

That Board Resolution No. 036/2023 of February 16, 2023, incorporated the Additional Provision Only, which states that “The BCB may authorize temporary exemptions from what is established in this Regulation through express communication from the General Management to the ASFT.”

That Board Resolution No. 043/2023 of February 27, 2023, modifies articles 6, 16, and 31 of the Legal Reserve Regulation.

That the Economic Policy Advisory and the Financial Entities Management through Report BCB-APEC-INF-2023-6, establish the need to modify article 4 of Board Resolution No. 043/2023, which establishes the validity for the application of Board Resolution No. 043/2023, consequently recommending to the Board of Directors the approval of the proposal for incorporation into said provision.

That the Legal Affairs Management, through Report BCB-GAL-SANO-DLBCI-INF-2023-74, concludes that the modification of Article 4 of Board Resolution No. 043/2023 proposed by the APEC and GEF is legally viable, since it does not contravene the legal order, recommending to the Board of Directors of the Issuing Entity its approval.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA,

RESOLVES:

Article 1.- Amend Article 4 of Board Resolution No. 043/2023, with the following text:

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“Article 4. The modifications to the Legal Reserve Regulation for Financial Intermediation Entities, established in articles 1 and 2, shall enter into force as of March 6, 2023, and Article 3 shall enter into force as of March 2, 2023.”

Article 2.- The Presidency and the General Management are charged with the compliance of this Resolution.

La Paz, March 1, 2023

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