Regulatory Alerts1999-06-22 | Resolución 053/99Added · Updated
Board Resolution No. 053/99 Approving Regulations for the Collection of Past-Due Portfolio
The Board of Directors of the Central Bank of Bolivia approved regulations for collecting past-due credit portfolios, effective July 1, 1999. This resolution authorizes the recovery of non-performing loans through incentives for full payment and accounting regularization mechanisms, while repealing previous resolutions that prohibited credit reprogramming and limited debt forgiveness to penal interest only.
BOARD RESOLUTION NO. 053/99 SUBJECT: FINANCIAL SYSTEM MANAGEMENT – APPROVES REGULATIONS FOR THE COLLECTION OF PAST-DUE PORTFOLIO.
VIEWED: Board Resolutions of the Central Bank of Bolivia (BCB) Nos. 110/98, 111/98, and 112/98 dated December 17, 1998. Supreme Decree No. 25336 of March 29, 1999. Law on Government Administration and Control No. 1178 (SAFCO) of July 20, 1990. Law of the Central Bank of Bolivia No. 1670 of October 31, 1995. SELF Report No. 24/99 from the Financial System Management dated April 28, 1999. ALEG Report No. 027/99 from the Legal Advisory and Note UAJUR No. 364/99 from the Legal Affairs Unit.
CONSIDERING: That Board Resolutions of the BCB Nos. 110/98, 111/98, and 112/98 accept the method of payment of BCB credits by banking entities in liquidation: Bancos del Progreso Nacional S.A.M., Potosí S.A., and de la Vivienda S.A.M., respectively, with the assignment of current and past-due credit portfolios at net value after provisions.
That Article 3 of Supreme Decree No. 25336 authorizes the BCB to recover the portfolio delivered by the former National Pre-investment Institute (public and private sectors) under the incentive and penalty conditions determined by its Board of Directors.
That Article 33 of the SAFCO Law establishes that there is no administrative, executive, or civil responsibility when the decision approved aims for the greatest benefit of the entity.
That Article 55 of the aforementioned Law repeals Decree-Law No. 16390 of April 30, 1979, which established the imprescriptibility of debts to the State.
That Article 54, subsection j) of Law No. 1670, empowers the Board of Directors of the Central Bank of Bolivia to set and modify interest rates on credits granted by the BCB, taking into account market rates, as well as to establish their other terms and conditions.
That SELF Report No. 024/99 from the Financial System Management recommends the approval of the proposed collection policies, in order to recover the past-due portfolio delivered to the BCB in administration and in lieu of payment.
That in the opinion of the Legal Advisory (ALEG Report No. 027/99), it is the attribution of the Board of Directors to establish the terms and conditions for the recovery of BCB credits. That the Legal Affairs Unit, through note UAJUR No. 364/99 of May 26, 1999, states that the responsibility for the forgiveness of current and penal interest on the past-due portfolio is diluted in the application of Article 33 of the SAFCO Law, taking into account final judicial rulings that forgive current and penal interest for equity, given the passage of time, in favor of the debtors of the Banco de Crédito Oruro in liquidation.
That in merit of the above, it is necessary for the Central Bank of Bolivia to have regulations that, to some extent, allow it to recover its past-due credit portfolio by granting incentives that prioritize the total payment of obligations, and simultaneously establish penalty mechanisms for credit portfolios to regularize the BCB's accounting records.
THEREFORE, THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:
Article 1.- Approve the Regulations for the Collection of Past-Due Portfolio, which, as an annex, forms an integral part of this Resolution.
Article 2.- The aforementioned Regulations will enter into force on July 1, 1999.
Article 3.- Board Resolutions of the BCB No. 086/91 of July 15, 1991, and No. 057/93 of April 20, 1993, which prohibited the reprogramming of credits administered by the former Development Management and authorized the General Management of the BCB to recover the refinanced portfolio of the Banco de Crédito Oruro in Liquidation, through judicial and extrajudicial actions that considered only the forgiveness of penal interest, are hereby repealed.
Article 4.- The Presidency and the General Management are charged with the execution and compliance of this Resolution.
La Paz, June 22, 1999
Juan Antonio Morales A.
Armando Pinell S.
Jaime Ponce G.
Juan Medinaceli
Fernando Campero P.
Armando Méndez M.
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