Board Resolution No. 050/2013: Regulation of Incentives for the Collection of Credit Portfolios Owned by the Central Bank of Bolivia and Administered from the Former National Pre-investment Institute

BOARD RESOLUTION NO. 050/2013 SUBJECT: FINANCIAL ENTITIES MANAGEMENT – REGULATION OF INCENTIVES FOR THE COLLECTION OF CREDIT PORTFOLIOS OWNED BY THE CENTRAL BANK OF BOLIVIA AND RECEIVED FOR ADMINISTRATION FROM THE FORMER NATIONAL PRE-INVESTMENT INSTITUTE (FORMER INALPRE).

VIEWED: The Law No. 1670 of October 31, 1995. The Statute of the Central Bank of Bolivia of October 21, 2005. Board Resolution No. 061/2003 of June 6, 2003. Board Resolution No. 072/2008 of May 27, 2008. Board Resolution No. 069/2009 of June 16, 2009. Board Resolution No. 050/2010 of April 6, 2010. Board Resolution No. 090/2011 of July 12, 2011. Supreme Decree No. 25336 of March 29, 1999. The Agreement for the Administration of Pre-investment Funds of May 3, 1988. The note from the Ministry of Development Planning MPD/DGAJ/EXT No. 168/2012 of June 19, 2012. The technical report from the Financial Entities Management BCB-GEF-SRRA-DRCA-INF-2013-52 of April 23, 2013. The legal report from the Legal Affairs Management BCB-GAL-SAJU-EXBBA-INF-2013-66-28 of May 3, 2013.

CONSIDERING: That Board Resolution No. 061/2003 of June 6, 2003 puts into effect only chapters II (Credit Recovery Committee) and V (Write-off of Unrecoverable Portfolio) of the Regulation for the Collection of Old Overdue Portfolio, until the total conclusion of the administration of the Old Overdue Portfolio.

That Board Resolution No. 072/2008 approved the Regulation for the Administration and Recovery of Credit Portfolios of the former Bolivian American Bank and the Regulation for the write-off of Credits of the Portfolio of the former BBA, treatment of recovery and withdrawal of the financial statements of the BCB.

That Board Resolution No. 069/2009 approved the Regulation of Incentives for the Collection and Reprogramming of Credit Portfolios owned by the Central Bank of Bolivia.

That Board Resolution No. 050/2010 approved the modification of article 1 of Board Resolution No. 092/2004 referred to the collection of the Written-off Portfolio of the Old Overdue Portfolio.

That Board Resolution No. 090/2011 approved the Regulation of Incentives for the Collection of Credit Portfolios owned by the Central Bank of Bolivia.

That the Recovery and Asset Realization Committee of Direct Administration, in an ordinary meeting on April 19, 2013 and through Act No. 04/2013, took note of Report BCB-GEF-SRRA-DRCA-INF-2013-45 from the Financial Entities Management and BCB-GAL-SAJU-EXBBA-INF-2013-43-21 related to credit portfolio collection policies under direct administration of the Issuing Entity, approving them and instructed that they be submitted to the Board of Directors.

That article 54 subsection o) of Law No. 1670, and article 11 numeral 29) of the BCB Statute, stipulate that the Board of Directors has the authority to approve, modify, and interpret the Statute and its Regulations, by two-thirds of its total members, without the need for any additional administrative act.

That Supreme Decree No. 25336 in its Article 3 authorizes the Central Bank of Bolivia to recover the portfolio that entities of the public and private sectors maintain with the former National Institute of Pre-investment (Former INALPRE), under the incentive and penalty conditions determined by its board for the collection of the portfolio in default received in pledge by the issuing institute.

That the agreement for the administration of the Pre-investment Funds signed between the Central Bank of Bolivia and the Former Ministry of Planning and Coordination establishes the responsibility of the Financial Agent (BCB) to recover the credit portfolio granted from the former INALPRE.

That the note from the Ministry of Development Planning MPD/DGAJ/EXT No. 168/2012, states that the Central Bank of Bolivia has the authority to adopt the necessary provisions for portfolio recovery and establish incentive policies in the recovery of the portfolio that entities of the public and private sectors maintain with the Former INALPRE.

That the report from the Financial Entities Management BCB-GEF-SRRA-DRCA-INF-2013-52 shows the results obtained with the application of benefits for the collection of portfolio and carries out the analysis of the application of incentives and recommends elevating to the consideration of the Institution's Board of Directors, the attached draft Regulation of Incentives referred to in said Report.

That the Legal Affairs Management BCB-GAL-SAJU-EXBBA-INF-2013-66-28, establishes that the draft Regulation of Incentives for the Collection of portfolio owned by the BCB and received for administration does not contravene any legal norm, therefore there is no legal objection to its consideration and subsequent approval, being the attribute of the Board of Directors of the Central Bank of Bolivia to consider and approve the said Regulation with the favorable vote of two-thirds of its total members.

THEREFORE, THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES: Article 1.- Approve the Regulation of Incentives for the Collection of Credit Portfolios Owned by the Central Bank of Bolivia and the portfolio in administration of the former National Institute of Pre-investment (Former INALPRE), which forms an integral part of this Resolution, with effect from May 15, 2013, until December 31, 2014.

Article 2.- The provisions contained in the Regulation for the Administration and Recovery of Credit Portfolios of the former Bolivian American Bank and the Regulation for the write-off of Credits of the Portfolio of the former BBA, treatment of recovery and withdrawal of the financial statements of the BCB, approved by Board Resolution No. 072/2008 of May 27, 2008, are applicable insofar as they are relevant to the credit portfolio of the former Bolivian American Bank.

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

La Paz, May 7, 2013

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Marcelo Zabalaga Estrada

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Gustavo Blacutt Alcalá Abraham Pérez Alandia

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Hugo Dorado Araníbar Rafael Boyán Téllez

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Rolando Marín Ibáñez

ANNEX INCENTIVES FOR THE COLLECTION OF CREDIT PORTFOLIOS OWNED BY THE CENTRAL BANK OF BOLIVIA AND RECEIVED FOR ADMINISTRATION FROM THE FORMER NATIONAL PRE-INVESTMENT INSTITUTE (FORMER INALPRE)

Article 1. Object and scope of application. The present Regulation aims to facilitate to the debtors and guarantors of the credit portfolio the cancellation of their pending payment obligations with the Central Bank of Bolivia, allowing such cancellation to be made by a third party, without this meaning automatic subrogation of the debt in their favor. The scope of application of this Regulation extends to the entire portfolio owned by the BCB and in administration, in the state it is found: current, overdue, and in judicial execution, in the latter case until before the extension of the adjudication deed inclusive. It comprises the Portfolios of the Banks: Former BBA, Crédito Oruro, Potosí, Del Progreso Nacional, San José Obrero Cooperative, and Former INALPRE.

Article 2. Of the benefits. The debtors of the credit portfolios indicated in the first article may avail themselves of the Benefit for the total payment of their credits.

Article 3. Benefits to be granted. The persons indicated in the first article of this regulation who make the total payment of the debt, in a single payment and in cash, will benefit from the forgiveness of current interest, penalties, moratory interest, BCB judicial expenses, and other charges, according to the following scale:

PRINCIPAL BALANCE EXPRESSED IN US$ FORGIVENESS OF CURRENT INTEREST FORGIVENESS OF PENAL, MORATORY INTERESTS, BCB JUDICIAL EXPENSES AND OTHER CHARGES Less than or equal to US$500 95% 100% From US$501 to US$1,000 90% 100% From US$1,001 to US$5,000 85% 100% From US$5,001 to US$15,000 80% 100% From US$15,001 to US$50,000 75% 100% From US$50,001 onwards 70% 100%

Article 4. Requirements for the benefit. Those who avail themselves of the benefits of this Regulation must pay the professional fees of external lawyers, in the case of the Former BBA portfolio, they must also pay the judicial expenses incurred during the administration of the BME mandate or in administration of the former BBA. Judicial expenses incurred during the direct administration of the BCB will be forgiven. As well as the BCB judicial expenses not reported by the lawyers at the date of settlement of the obligation will be forgiven, with the BCB assuming these amounts charged to management results. Likewise, other charges registered in the credit records and/or in the Credit Portfolio Administrator System (SACC), which refer to Publications and forms, will be forgiven. In the event that debtors or guarantors have more than one obligation with the BCB, the benefits will be applied per credit. Debtors who have actions against the BCB aimed at avoiding the payment of their obligations, prior to availing themselves of the benefits, must withdraw the action and the rights therein.

Article 5. Interest received in payment by the BCB. The interest from the credit portfolio of the Former BBA received and accounted for as part of payment for the financial support provided by the BCB will not be forgiven.

Article 6. Partial payments. Pending judicial deposits up to the date of approval of this Regulation, due to judicial withholdings or auctions of assets, will not be considered for the benefits provided in the regulation.

Article 7. Validity of the benefits. The benefits granted under this regulation will be valid from May 15, 2013, until December 31, 2014. ---- O ---