Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 050/2016

SUBJECT: FINANCIAL ENTITIES MANAGEMENT – AMENDMENT TO THE REGULATION ON THE DISPOSITION OF MOVABLE AND IMMOVABLE ASSETS TRANSFERRED AS PAYMENT IN KIND BY THE LIQUID BANKS SUR S.A., COCHABAMBA S.A. AND BANCO INTERNACIONAL DE DESARROLLO S.A. AND OTHER ASSETS ADJUDICATED JUDICIALLY.

VISTOS (VIEWED):

• Law No. 1670 of October 31, 1995 of the Central Bank of Bolivia.
• Law No. 1834 of March 31, 1998 on the Securities Market.
• The Statute of the Central Bank of Bolivia of October 21, 2005.
• Supreme Decree No. 2068 of July 30, 2014.
• Board Resolution No. 146/2014 of October 21, 2014, which approves the Regulation on the Disposition of Movable and Immovable Assets Transferred as Payment in Kind by the Liquid Banks Sur S.A., Cochabamba S.A. and Banco Internacional de Desarrollo S.A. and Other Assets Adjudicated Judicially.
• Technical Report from the Financial Entities Management BCB-GEF-SRRA-DRLA-INF-2016-57 of March 21, 2016.
• Report from the Legal Affairs Management BCB-GAL-SAJU-DLCC1-INF-2016-42 of March 21, 2016.

CONSIDERANDO (CONSIDERING):

That Article 1 of Law No. 1670 establishes that the Central Bank of Bolivia (BCB) is the sole monetary and exchange authority of the country, with administrative, technical, and financial competence and specialized normative powers of general application, in the manner and with the scope established in this Law.

That Article 86 of Law No. 1670 of the Central Bank of Bolivia determines that the BCB may not acquire or maintain participations in the capital of private, public, or mixed, financial or non-financial companies, and in cases where the shares or participations of the BCB, in any type of company or entity, originated from the payment of debts, capitalization of credits, or judicial adjudication, they must be disposed of for consideration within one year of their acquisition.

That Article 3 of Law No. 1834 on the Securities Market establishes that for the stock and over-the-counter markets, the only authorized intermediaries are Stock Agencies, which may act on their own account or on behalf of third parties in the securities market.

That Article 54 subsection o) of Law No. 1670, and Article 11 numeral 29) of the BCB Statute, provide 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. 2068 in its Article 2 establishes that the Liquid Banks Sur S.A., Cochabamba S.A., and Internacional de Desarrollo S.A. will transfer to the Central Bank of Bolivia the assets registered in their respective General Balance Sheets, including the balances of the Write-off Portfolio and those assets that were not effectively delivered to the General Treasury of the Nation.

That the Regulation on the Disposition of Movable and Immovable Assets Transferred as Payment in Kind by the Liquid Banks Sur S.A., Cochabamba S.A. and Banco Internacional de Desarrollo S.A. and Other Assets Adjudicated Judicially, approved by R.D. No. 146/2014 of October 21, 2014, requires a partial modification to facilitate the sale of realizable assets, allowing public entities to budget resources and, on the other hand, comply with securities regulations for the sale of shares.

That the Report BCB-GEF-SRRA-DRCA-INF-2016-57 from the Financial Entities Management recommends the modification of the Regulation on the Disposition of Movable and Immovable Assets Transferred as Payment in Kind by the Liquid Banks Sur S.A., Cochabamba S.A. and Banco Internacional de Desarrollo S.A. and Other Assets Adjudicated Judicially.

That the report from the Legal Affairs Management BCB-GAL-SAJU-DLCC1-INF-2016-42 states that the modification of the Regulation on the Disposition of Movable and Immovable Assets Transferred as Payment in Kind by the Liquid Banks Sur S.A., Cochabamba S.A. and Banco Internacional de Desarrollo S.A. and Other Assets Adjudicated Judicially, according to the technical criteria contained in Report BCB-GEF-SRRA-DRCA-INF-2016-51, does not contradict the current legal framework as it is legally appropriate, being within the competence of the BCB Board of Directors to consider its approval by two-thirds of the votes of its total members.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Approve the modification of the Regulation on the Disposition of Movable and Immovable Assets Transferred as Payment in Kind by the Liquid Banks Sur S.A., Cochabamba S.A. and Banco Internacional de Desarrollo S.A. and Other Assets Adjudicated Judicially, as follows:

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IT STATES:

Article 12.- On the Direct Sale of Real Estate to Public Sector Entities.

The direct sale to public sector entities is that carried out by the Central Bank of Bolivia only to public sector entities, of those immovable assets that it has received from the Liquid Banks, Sur S.A., Cochabamba S.A. and Banco Internacional de Desarrollo S.A., whether or not budgeted, or those adjudicated judicially in judicial processes for the recovery of credit portfolios of said banks, based on technical-legal justifications made by the interested public entity for the acquisition of the asset.

For this type of sale, the Board of Directors, based on a report prepared by the Committee, will establish the immovable assets that will be subject to this type of direct sale, which may be one or several immovable assets.

The Board of Directors, based on the Committee's report, may determine that the sales modalities of public invitation or open bidding auction be carried out directly, without it being necessary to carry out the direct sale modality.”

Article 14.- On the Call for Direct Sale

Once the direct sale modality is approved by the Board of Directors, the Asset Recovery and Realization Committee will instruct the Financial Entities Management to prepare the public call, with the following content:

a) Identification of the immovable assets.

b) Invitation to public entities to submit Technical-Legal Reports justifying the need to request the acquisition of the real estate.

c) Description, current situation, and base price of the immovable assets to be disposed of.

d) Address, date, and time for the exhibition of the immovable assets, consultations, and the holding of the envelope opening act.

e) Deadline for the submission of proposals and technical-legal reports.

f) Schedule for the direct sale by public invitation.

g) Deadline for the payment of the value of the real estate in case of adjudication.

h) Date of communication of the result of the invitation.

Article 19.- On the Criteria for the Adjudication of the Asset.

The Committee for the qualification of proposals must take into account the technical-legal reports presented by the interested public entities, which must expose and justify:

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a) The contribution to the purposes of the Plurinational State.

b) The contribution to improving the quality of life and sumak kawsay (living well) of Bolivian women and men.

c) The growth of the public entity.

d) The use of the asset to be acquired.

e) And others that the entity deems convenient to expose and justify.

Article 21.- Method of Payment.

The adjudicating entity must pay the amount corresponding to the adjudicated asset within 30 calendar days following the notification of the adjudication.

In the event of non-payment within the established period, the Board of Directors may consider another entity that had submitted its proposal and met all requirements for the adjudication.

Once the asset is adjudicated by the Board of Directors, the Financial Entities Management will carry out the respective collection and delivery of the asset.

All transfer costs are borne by the Institution that was awarded the asset.

IT SHOULD STATE:

“Article 12.- On the Direct Sale of Real Estate to Public Sector Entities.”

The direct sale to public sector entities is that carried out by the Central Bank of Bolivia only to public sector entities, of those immovable assets that it has received from the Liquid Banks, Sur S.A., Cochabamba S.A. and Banco Internacional de Desarrollo S.A., whether or not budgeted, or those adjudicated judicially in judicial processes for the recovery of credit portfolios of said banks, based on proposals made by the interested public entities in the acquisition of the assets.

For this type of sale, the Board of Directors, based on a report prepared by the Committee, will establish the immovable assets that will be subject to this type of direct sale, which may be one or several immovable assets.

The Board of Directors, based on the Committee's report, may determine that the sales modalities of public invitation or open bidding auction be carried out directly, without it being necessary to carry out the direct sale modality.

Article 14.- On the Call for Direct Sale

Once the direct sale modality is approved by the Board of Directors, the Asset Recovery and Realization Committee will instruct the Financial Entities Management to prepare the public call, with the following content:

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a) Identification, address, description, current situation, and base price of the assets to be disposed of.

b) Invitation to public entities to submit purchase proposals, which must be accompanied by:

i. Note signed by the highest executive authority of the public entity addressed to the President of the BCB, manifesting the decision to acquire the immovable asset and, if applicable, the legal instrument backing the acquisition proposal.

ii. Technical and legal reports justifying the need to have said real estate.

iii. Method of payment and guarantee offered in case partial payments are contemplated.

c) Schedule for the direct sale by public invitation, which will contain:

i. Date and time for the exhibition of the immovable assets and consultations.

ii. Deadline for the submission of proposals.

iii. Date and time for the holding of the envelope opening act.

iv. Date of communication of the result of the call.

Article 19.- On the Criteria for the Adjudication of the Asset.

The Committee will evaluate the proposals, considering the method of payment, guarantees, and the technical and legal reports. The reports must expose and justify:

a) The contribution to the purposes of the Plurinational State.

b) The contribution to improving the quality of life and sumak kawsay (living well) of Bolivian women and men.

c) The growth of the public entity.

d) The use of the asset to be acquired.

e) And others that the entity deems convenient to expose and justify.

The Committee, once the proposals have been evaluated, will suggest to the Board of Directors the adjudication of the real estate in favor of the proponent who best responds to the objectives of the invitation or, failing that, the declaration of the call as unsuccessful.

Article 21.- Method of Payment.

The adjudicating entity must pay the amount corresponding to the adjudicated asset according to the proposal presented.

In case the cancellation is in a single payment, this must be made up to 60 calendar days following the adjudication. Similarly, in case the cancellation

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Central Bank of Bolivia Board of Directors

considers partial payments, the first payment will be made up to 60 calendar days from the adjudication.

Once the asset is adjudicated by the Board of Directors, the Financial Entities Management will carry out the respective collection and delivery of the asset according to what is established in the Adjudication Resolution.

All transfer costs are borne by the Institution that was awarded the asset.

In the event of non-payment or withdrawal by the adjudicating public entity, the BCB Board of Directors may adjudicate the real estate to the public entity that obtained the second place in the evaluation, or, failing that, declare the call unsuccessful.

Article 2.- Incorporate a new transitional chapter as follows:

CHAPTER VII

SALE OF SHARES

**“Article 47.- Sale of Shares.

I. The Board of Directors will authorize the sale of shares received under the framework established in Article 86 of Law No. 1670 of the Central Bank of Bolivia, upon proposal of the Asset Realization Committee. The disposal of the shares will be carried out through a Stock Agency in compliance with the provisions of the securities market, or another mechanism of the over-the-counter market.

II. In the case that the payment in kind or judicial adjudication considers shares that are subject to the restriction established in Article 29 of Law No. 1834 on the Securities Market, the Board of Directors will authorize the management of the sale to the Financial Entities Management and Legal Affairs Management.”**

Article 3.- The approved modifications will enter into force on the day of their approval.

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

La Paz, March 21, 2016

Marcelo Zabalaga Estrada

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Central Bank of Bolivia Board of Directors

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Sergio Velarde Vera Ronald Polo Rivero Abraham Pérez Alandia Reynaldo Yujra Segales Álvaro Rodríguez Rojas