Board Resolution No. 065/2015: Regulation of Incentives for the Collection of Credit Portfolio Owned by the Central Bank of Bolivia and Received in Administration from the Former National Pre-investment Institute (Ex INALPRE)

ey/iffice, BOARD RESOLUTION NO. 065/2015 SUBJECT: FINANCIAL ENTITIES MANAGEMENT - REGULATION OF INCENTIVES FOR THE COLLECTION OF CREDIT PORTFOLIO OWNED BY THE CENTRAL BANK OF BOLIVIA AND RECEIVED IN ADMINISTRATION FROM THE FORMER NATIONAL PRE-INVESTMENT INSTITUTE (EX INALPRE).

VIEWING: 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. Board Resolution No. 050/2013 of May 7, 2013. Minutes of the Recovery and Realization Committee of Direct Administration Assets No. 02/2015 of April 16, 2015. Supreme Decree No. 25336 of March 29, 1999. Supreme Decree No. 2068 of July 30, 2014. Agreement for the Administration of Pre-investment Funds of May 3, 1988. Note from the Ministry of Development Planning MPD/DGAJ/EXT No. 168/2012 of June 19, 2012. Technical Report from the Financial Entities Management BCB-GEF-SRRA-DRCA-INF-2015-35 of April 16, 2015. Legal Report from the Legal Affairs Management BCB-GAL-SAJU-EXBBA-INF-2015-14 of April 17, 2015.

CONSIDERING:

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That Article 54 item o) of Law No. 1670, and Article 11 numeral 29) of the Statute of the BCB, 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 Board Resolution No. 061/2003 of June 6, 2003, brings into effect only chapters II (Credit Recovery Committee) and V (Write-off of Unrecoverable Portfolio) of the Regulation for the Collection of Old Delinquent Portfolio, until the total conclusion of the administration of the Old Delinquent Portfolio.

That Board Resolution No. 072/2008 approved the Regulation for the Administration and Recovery of Credit Portfolio 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 Portfolio 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 Delinquent Portfolio.

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

That Board Resolution No. 050/2013 approved the Regulation of Incentives for the Collection of Credit Portfolio owned by the Central Bank of Bolivia and received in administration from the former INALPRE.

That the Recovery and Realization Committee of Direct Administration Assets, in its ordinary meeting on April 16, 2015, and through Minutes No. 02/2015, took note of Report BCB-GEF-SRRA-DRCA-INF-2015-30 from the Financial Entities Management related to credit portfolio collection policies in direct administration of the Issuing Entity and those received in administration, approving the option to continue with the policy provided in B.R. No. 050/2013 and instructed that it be submitted for consideration by the Board of Directors.

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 sector maintain with the former National Pre-investment Institute (Ex INALPRE), under the incentive and write-off conditions determined by its board of directors for the collection of the portfolio in delinquency received in payment in kind by the issuing institute.

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That Supreme Decree No. 2068 in its Article 2, determines the transfer of assets from financial entities in liquidation (Banco Sur, Cochabamba and BIDESA) to the Central Bank of Bolivia, including the balances of written-off portfolio and those assets that were not effectively delivered to the General Treasury of the Nation, as indicated by Supreme Decree No. 29889 of January 23, 2009.

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 the recovery of portfolio and establish incentive policies in the recovery of the portfolio that entities of the public and private sector maintain with the Ex INALPRE.

That the report from the Financial Entities Management BCB-GEF-SRRA-DRCA-INF-2015-35 presents the analysis of the need to have policies for extrajudicial collection of credit portfolio, suggesting according to what was determined by the Recovery and Realization Committee in Minutes No. 02/2015, to apply incentives similar to those established in Board Resolution No. 050/2013 and recommends elevating to the consideration of the Institution's Board of Directors its approval.

That the Legal Affairs Management in report BCB-GAL-SAJU-EXBBA-INF-2015-14, establishes that the Incentives proposed for the Collection of portfolio of Property of the BCB and of the Received in Administration do not contravene any legal norm, so there is no legal objection to its consideration and subsequent approval, being the authority of the Board of Directors of the Central Bank of Bolivia to consider and approve the proposed policy 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 Portfolio of Property of the Central Bank of Bolivia and of the portfolio in administration of the former National Pre-investment Institute (Ex INALPRE), which forms an integral part of this Resolution, with effect from May 10, 2015, until December 31, 2016.

La Paz, April 28, 2015 Reynaldo Yujra Se Abr /am- Perez Alandia Polo Rivero tgio Velarde Vera es

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Article 2.- The provisions contained in the Regulation for the Administration and Recovery of Credit Portfolio of the former Bolivian American Bank and 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 charged with the execution and compliance of this Resolution.

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CAPITAL BALANCE EXPRESSED IN ITS FORGIVENESS OF CURRENT INTERESTS FORGIVENESS OF PENALTY, MORATORY INTERESTS AND OTHER CHARGES Less than or equal to $us500 95% 100% From $us501 to $us1,000 90% 100% From $us1,001 to $us5,000 85% 100% From $us5,001 Onwards 80% 100%

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ANNEX INCENTIVES FOR THE COLLECTION OF CREDIT PORTFOLIO OF PROPERTY OF THE CENTRAL BANK OF BOLIVIA AND RECEIVED FOR ADMINISTRATION FROM THE FORMER NATIONAL PRE-INVESTMENT INSTITUTE (EX INALPRE)

Article 1. Object and Scope of Application. The present Regulation aims to facilitate to 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 performed by a third party, without this signifying automatic subrogation of the debt in their favor. The scope of application of this Regulation extends to the entire portfolio of property of the BCB and in administration, in the state in which it is found: current, overdue and in judicial execution, in the latter case until before the extension of the adjudication deed inclusive. It includes the credit portfolio of the Banks: Ex BBA, Credito Oruro, Potosi, Del Progreso Nacional, BIDESA (The BIDESA portfolio up to the capital amount that is property of the BCB), San Jose Obrero Cooperative, ex INALPRE, as well as the written-off credit portfolio of the Banks Sur, Cochabamba and International Development (BIDESA) of property of the TGN that will be received in payment in kind by the BCB within the framework of D.S. No. 2068.

Article 2. Of the Benefits. The debtors of the credit portfolios listed in the first article may avail themselves of the Benefit for the total payment of their credits and in cash.

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, penalty interest, moratory interest and other charges, according to the following scale:

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Article 4. Requirements for the Benefit. Those who avail themselves of the benefits of this Regulation must pay the professional fees of external lawyers, where applicable, they must also pay the judicial expenses incurred during the administration of the BME mandate or in the administration of the former BBA, the judicial expenses claimed by FONDESIF and the judicial expenses incurred during the direct administration of the BCB. The BCB's judicial expenses that were not reported by the lawyers at the date of settlement of the obligation will be forgiven, with the BCB assuming these amounts from management results. Likewise, other charges registered in the credit records and/or in the Credit Portfolio Administrator System (SACC), which refer to Publications, forms and insurance, 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 judicial 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. Interests Received in Payment by the BCB. The interests of the credit portfolio of the Ex BBA received and accounted for as part of payment for the financial supports carried out by the BCB will not be forgiven.

Article 6. Payments on Account. The pending judicial deposits for application up to the date of approval of this Regulation, due to judicial retentions or auctions of goods, will not be considered for the benefits provided in the regulation.

Article 7. Linked Credits. The credits qualified as linked by the Banks Sur, Cochabamba and International Development (BIDESA) received by the BCB in payment in kind within the framework of Supreme Decree No. 2068, will not be covered by the benefits of this regulation.

Article 8. Validity of the Benefits. The benefits granted in application of this regulation will be valid from May 1, 2015, until December 31, 2016.