Board Resolution No. 069/2017 Approving the Legal Reserve Regulation

Banco Central de Bolivia
Directorio

BOARD RESOLUTION NO. 069/2017

SUBJECT: ECONOMIC POLICY ADVISORY AND FINANCIAL ENTITIES MANAGEMENT APPROVES THE LEGAL RESERVE REGULATION

VIEWED:

The Political Constitution of the State promulgated on February 7, 2009.

Law No. 1670 of October 31, 1995 of the Central Bank of Bolivia (BCB).

Law No. 393 of August 21, 2013 on Financial Services.

The BCB Statute approved by Board Resolution No. 128/2005 of October 21, 2005 and its subsequent amendments.

The Legal Reserve Regulation approved by Board Resolution No. 107/2016 of June 14, 2016.

Board Resolution No. 214/2016 of November 15, 2016.

The Legal Reserve Regulation approved by Board Resolution No. 65/2017 of May 16, 2017.

The Report from the Economic Policy Advisory and Financial Entities Management BCB-APEC-SIE-INF-2017-37 of May 19, 2017.

The Report from the Legal Affairs Management BCB-GAL-SANO-DLBCI-INF-2017-119 of May 19, 2017.

CONSIDERING:

That Article 328 of the Political Constitution of the State provides that the BCB is authorized, in coordination with the economic policy determined by the Executive Branch, to determine and execute monetary policy and execute exchange rate policy.

That in compliance with Article 7 of Law No. 1670, the BCB has established a Legal Reserve Regulation of mandatory compliance by Institutions of the Financial System.

That Article 11, numeral 7) of the BCB Statute states that it is the faculty of the Board to establish, by absolute majority of votes, legal reserves of mandatory compliance by Financial Intermediation Entities and approve their composition, amount, calculation, characteristics, forms of administration, custody, and remuneration according to Regulation.

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That the Legal Reserve Regulation aims to establish the technical and operational conditions of mandatory compliance for financial entities duly authorized for operation by the Financial System Supervision Authority (ASFI), regarding the constitution and form of administration of the legal reserve.

That the Economic Policy Advisory and Financial Entities Management, through Report BCB-APEC-SIE-INF-2017-37, recommend the approval of the Legal Reserve Regulation.

That according to Report BCB-GAL-SANO-DLBCI-INF-2017-119, the Legal Affairs Management concludes that the proposed modification is legally appropriate, as it does not contravene the current legal framework, and it is the competence of the BCB Board to consider its approval by two-thirds of the votes of all its members, in accordance with subsection o) of Article 54 of Law No. 1670 concordant with numeral 29) of Article 11 of the BCB Statute.

THEREFORE,
THE BOARD OF THE CENTRAL BANK OF BOLIVIA
RESOLVES:

Article 1.- Approve the Legal Reserve Regulation, which as an annex, forms part of this Resolution.

Article 2.- The Legal Reserve Regulation will enter into force starting May 22, 2017.

Article 3.- From the entry into force of this Resolution, Board Resolution No. 65/2017 of May 16, 2017 is repealed.

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

La Paz, May 22, 2017

[Signature]
Pablo Ramos Sánchez

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[Signature]
Sergio Velarde Vera

[Signature]
Ronald Polo Rivero

[Signature]
Abraham Pérez Alandia

[Signature]
Luis Baudoin Olea

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LEGAL RESERVE REGULATION
FOR FINANCIAL INTERMEDIATION ENTITIES

TITLE I
GENERALITIES

Article 1 (Scope of Application).

All Financial Intermediation Entities, authorized for operation by the Financial System Supervision Authority (ASFI), are subject to the provisions of this Regulation.

State Financial Intermediation Entities or those with majority state participation (Productive Development Bank, Public Bank, and Public Development Financial Entity) will be subject to the provisions of this Regulation provided that they capture public resources in the Plurinational State of Bolivia.

Branches abroad authorized for operation by the Financial System Supervision Authority (ASFI), which capture resources in the Plurinational State of Bolivia, must constitute legal reserve under the terms of this Regulation when they are exempt from reserve in the country where they operate. When abroad they are subject to a reserve requirement lower than that of this Regulation, they must constitute reserve in the amount and modality that allows covering the difference, which will be determined by the Board of the Central Bank of Bolivia.

Article 2 (Terms and Abbreviations).

For the purposes of this Regulation, the following terms and abbreviations are used:

BCB: Central Bank of Bolivia.
ASFI: Financial System Supervision Authority.
COMA: Open Market Operations Committee of the BCB.
BDR: Productive Development Bank.
DPF: Fixed-Term Deposits.
UFV: Housing Development Unit.
MN: National Currency.
ME: Foreign Currency.
MNUFV: National currency with value maintenance relative to the UFV.
MVDOL: National currency with value maintenance relative to the US dollar.

Legal Reserve:

The proportion of deposits from natural and legal persons that Financial Intermediation Entities must maintain as a reserve, at the BCB or through the BCB.

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Required Legal Reserve:

Amount that Financial Intermediation Entities must deposit at the BCB or in Financial Intermediation Entities authorized for legal reserve purposes.

Constituted Legal Reserve:

Amount deposited by Financial Intermediation Entities at the BCB or in Financial Intermediation Entities authorized for legal reserve purposes.

Legal Reserve in Cash:

Legal reserve required and constituted in cash by Financial Intermediation Entities, which will be maintained in deposit in accounts enabled for this effect.

Legal Reserve in Securities:

Legal reserve required and constituted in cash by Financial Intermediation Entities, to be invested by the BCB or the Delegated Administrators of the RAL-MN, RAL-MNUFV, RAL-ME, and RAL-MVDOL Funds in securities, values, or authorized instruments.

RAL Fund:

The Liquid Asset Requirement Fund is a closed-end investment fund constituted solely by resources contributed by Financial Intermediation Entities through legal reserve in securities. Each Financial Intermediation Entity will have its contribution to the RAL Fund registered individually. The RAL Fund is constituted by the following denominations: National Currency (RAL-MN Fund), National currency with value maintenance relative to the UFV (RAL-MNUFV Fund), Foreign Currency (RAL-ME Fund), and National currency with value maintenance relative to the US dollar (RAL-MVDOL Fund).

Fund for credits destined to the productive sector and social housing:

This Fund is constituted at the BCB with resources released from the RAL-ME Fund by the application of the legal reserve rates in securities in ME and MVDOL determined in this regulation.

Delegated Administrator of the RAL-MN Fund:

Corresponds to the BCB or the Financial Intermediation Entity acting as Delegated Administrator in the administration of the RAL-MN Fund.

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When it concerns a Financial Intermediation Entity other than the BCB, it will be selected based on competitive mechanisms and conditions approved by the BCB Board by express resolution.

Delegated Administrator of the RAL-MNUFV Fund:

Corresponds to the BCB or the Financial Intermediation Entity acting as Delegated Administrator in the administration of the RAL-MNUFV Fund.

When it concerns a Financial Intermediation Entity other than the BCB, it will be selected based on competitive mechanisms and conditions approved by the BCB Board by express resolution.

Delegated Administrator of the RAL-ME Fund:

Is the foreign financial institution acting as Delegated Administrator in the administration of the RAL-ME Fund, selected based on competitive mechanisms and conditions approved by the BCB Board by express resolution.

Delegated Administrator of the RAL-MVDOL Fund:

Is the foreign financial institution acting as Delegated Administrator in the administration of the RAL-MVDOL Fund, selected based on competitive mechanisms and conditions approved by the BCB Board by express resolution.

Legal Reserve Requirement Period:

Period of 14 consecutive days, determined by the ASFI for the purpose of calculating the required legal reserve.

Legal Reserve Constitution Period:

Period of 14 consecutive days, lagged by 8 days relative to the legal reserve requirement period.

Obligations Subject to Reserve (OSR):

Liabilities denominated in MN, MNUFV, MVDOL, and ME, detailed in Articles 3 and 4 of this Regulation. Short-term liabilities with the exterior mentioned in Article 6 of this Regulation are excluded from the scope of this definition.

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TITLE II

LEGAL RESERVE ON DEMAND LIABILITIES, SAVINGS ACCOUNTS, DPF, AND OTHER OBLIGATIONS

Article 3 (Demand, savings, and fixed-term obligations subject to legal reserve).

Financial Intermediation Entities included in Article 1 of this Regulation must constitute legal reserve in cash and securities on liabilities registered in the accounts detailed below:

Liabilities with the public and state-participated companies on demand

• Checking account deposits
• Inactive checking accounts
• Demand deposits
• Certified checks
• Transfers and wire transfers payable
• Collections for reimbursement
• Maturity values
• Checking account fiduciary deposits
• Demand fiduciary deposits

Liabilities with the public and state-participated companies for savings accounts

• Savings account deposits
• Inactive savings account deposits
• Liabilities with participants in savings plans
• Savings account fiduciary deposits

Liabilities with the public and state-participated companies for fixed-term

• Fixed-term obligations
• Fixed-term obligations with account annotation

Liabilities with the public and state-participated companies restricted

• Closed checking accounts
• Savings account deposits affected as collateral
• Fixed-term deposits affected as collateral
• Restricted fixed-term obligations with account annotation

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Other payable accounts

• Management checks

Liabilities with banks and financing entities

• Checking account deposits from domestic financial entities subject to reserve
• Other demand liabilities with domestic financial entities subject to reserve
• Demand financing from foreign entities
• Head office and branches on demand
• Foreign banks and correspondents on demand
• Savings account deposits from domestic financial entities subject to reserve
• Fixed-term deposits from domestic financial entities with account annotation subject to reserve
• Interbank operations
• Short-term financing from foreign entities freely available
• Short-term financing from foreign entities for foreign trade operations
• Head office and branches short-term freely available
• Head office and branches short-term for foreign trade operations

Other liabilities with the public, state-participated companies, and banks and financing entities:

• Judicial deposits
• Third-party funds for Bolsín operations
• Third-party funds for stock market operations
• Funds to be delivered to third parties by the placement of securities
• Mobile wallet payment account
• Prepaid card account
• Other demand liabilities with the public
• Judicial withholdings
• Prepaid credit letter collateral deposits
• Other collateral deposits
• Other restricted liabilities with the public
• Restricted liabilities with banks and other financial entities subject to legal reserve
• Anticipated collections from credit card clients

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Article 4 (Reserve applications for DPF).

The legal reserve requirements for DPF, according to terms and denominations, are established in the following table:

LEGAL RESERVE FOR DPF ACCORDING TO MATURITY TERM AND DENOMINATION*

Original Term on DPF	NATIONAL CURRENCY AND MNUFV	FOREIGN CURRENCY AND MVDOL
	Reserve in Securities	Reserve in Cash	Reserve in Securities	Reserve in Cash
From 30 to 360 days	Reserve	Reserve	Reserve	Reserve
Greater than 360 days	No reserve	No reserve	Reserve	No reserve

*Only fixed-term deposits of 30 days or more are considered DPF.

Article 5 (Legal reserve rates).

The legal reserve rates on the liabilities detailed in Article 3 of this Regulation are as follows:

In MN and MNUFV:

Cash
Six percent (6%) for cash reserve.
Securities
Five percent (5%) for securities reserve.

In ME and MVDOL:

Cash
Thirteen point five percent (13.5%) for cash reserve.
Securities
Thirty-five percent (35%) for securities reserve for DPF greater than 720 days; and forty-three percent (43%) for the rest of liabilities.

Financial Intermediation Entities must constitute legal reserve in cash, equivalent to a rate of one hundred percent (100%), on accounts included in "Other Liabilities with the public, state-participated companies, and banks and financing entities" indicated in Article 3 of this Regulation.

Article 6 (Deductions and exemptions from reserve).

Short-term liabilities with the exterior, contracted exclusively for foreign trade operations with exact matching between asset and liability for each operation, are exempt from the requirement to constitute legal reserve.

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The following accounts of Financial Intermediation Entities (IFD) are exempt from the application of cash reserve (in all currencies) and securities reserve (in ME and MVDOL):

• 237.01 Short-term financing from foreign entities freely available
• 237.02 Short-term financing from foreign entities for foreign trade operations (for the part that does not maintain exact matching with active operations)
• 237.08 Head office and branches short-term freely available
• 237.09 Head office and branches short-term for foreign trade operations (for the part that does not maintain exact matching with active operations)

Article 7 (Registration).

Financial Intermediation Entities must register at the BCB, in detail, the DPF referred to in Article 4 of this Regulation. Likewise, they must inform the BCB about the redemptions of the same made in a term shorter than the original.

Article 8 (Obligations between Financial Intermediation Entities).

Deposits from one Financial Intermediation Entity in other Financial Intermediation Entities will be subject to the legal reserve norms established in Articles 3 and 4 of this Regulation, in case reserve had not been constituted previously.

TITLE III

CONSTITUTION OF LEGAL RESERVE IN CASH AND SECURITIES

Article 9 (Legal Reserve Cash Accounts).

Multiple Banks, SME Banks, the Productive Development Bank, the Public Bank, and the Public Development Financial Entity will maintain at the BCB a single account called "checking and reserve account" in each of the four denominations (MN, MNUFV, MVDOL, and ME).

Housing Financial Entities, Savings and Credit Cooperatives, Development Financial Institutions, and Communal Financial Entities authorized by ASFI will maintain at the BCB a single account called "reserve account" in each of the four denominations (MN, MNUFV, MVDOL, and ME) on which checks cannot be drawn. For cash withdrawal from this account at BCB counters, the procedures established by the Issuer Entity will be followed.

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Multiple Banks, SME Banks, the Productive Development Bank, the Public Bank, and the Public Development Financial Entity must constitute cash reserve in the checking and reserve account, and Housing Financial Entities, Savings and Credit Cooperatives, Development Financial Institutions, and Communal Financial Entities must do so in the reserve account. These accounts will not be subject to any type of judicial seizure or retention by third parties.

Legal reserve in cash must be constituted: (i) in national currency, for deposits in the same currency, (ii) in national currency at the equivalent value in UFV, for deposits in MNUFV, and (iii) in US dollars, for deposits in ME and MVDOL.

Article 10 (Compensation between Securities and Cash).

Excesses of legal reserve in cash may compensate deficiencies of legal reserve in securities. Excesses of legal reserve in securities may not compensate deficiencies of legal reserve in cash.

Article 11 (Calculation of Legal Reserve).

All Financial Intermediation Entities of the country included in Article 1 of this Regulation will maintain a legal reserve of their liabilities with the public, deposited in accounts enabled for this effect.

The required legal reserve will include the reserve requirements of Articles 3 and 4 of this Regulation, calculated as the average of the OSR that each Financial Intermediation Entity maintains at the end of the day in the reserve requirement period.

The constituted reserve will be calculated as the average of daily balances credited in the respective accounts, in the reserve constitution period.

Article 12 (Report of Liabilities Subject to Legal Reserve).

Financial Intermediation Entities must report daily the entirety of their liabilities subject to legal reserve, by denomination and by type of deposit through the financial information system and according to what is established by ASFI norms. The report will correspond to the liabilities subject to legal reserve of the previous business day.

Cash deposits at the BCB or its correspondents will be subject to the schedules established by the BCB.

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Article 13 (No Compensation by Currencies).

Legal reserve in cash must be constituted in the denomination in which the deposits were captured. Compensation between denominations for cash reserve is not permitted. Legal reserve in securities must be constituted according to what is established in Article 18 of this Regulation.

On reserve constituted in MNUFV and MVDOL, the BCB will recognize in favor of Financial Intermediation Entities the differential by variation of the UFV for MNUFV and by variation of the exchange rate for MVDOL only up to the limit of the required legal reserve in cash.

Article 14 (Sanctions for Early Withdrawal of DPF).

Fixed-term deposits that maintain any exemption of reserve, under what is established in this Regulation, may not be redeemed early. This prohibition is excepted for fixed-term deposits in ME and MVDOL that, being exempt from constituting legal reserve, are redeemed with the sole and exclusive purpose of converting them into deposits in MN.

When the issuing entity acquires its own fixed-term deposit certificates, these must be cancelled and withdrawn accounting-wise, and such withdrawal must be communicated to the BCB within a term no greater than 48 hours after it occurs.

Article 15 (Funds in Custody).

Financial Intermediation Entities may maintain up to 50% of their legal reserve requirement in cash in MN and MNUFV in Funds in Custody in any jurisdiction. Any excess maintained by Financial Intermediation Entities above this percentage will not be recognized for reserve purposes.

Financial Intermediation Entities must maintain 40% of their legal reserve requirement in cash in ME and MVDOL in Funds in Custody in any jurisdiction. Any excess maintained by Financial Intermediation Entities above this percentage will not be recognized for reserve purposes. The global deficiency in Funds in Custody in ME and MVDOL may not be compensated with excesses of reserve in BCB accounts or reserve in securities.

Article 16 (Cash Movements of Funds at the BCB).

The BCB will charge the commission fixed in the Table of Commissions and Other Incomes, established by its Board, for cash movements of entry or exit of funds to Financial Intermediation Entities.

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Article 17 (Deposits in Other Currencies).

For deposits captured in other currencies, other than the Bolivian and the US dollar, the reserve must be constituted in its equivalent in US dollars, at the reference purchase exchange rate issued daily by the BCB.

Article 18 (Constitution of Legal Reserve in Securities).

Legal reserve in securities must be constituted: (i) in MN, for deposits in the same currency, (ii) in MN at the equivalent value in UFV, for deposits in MNUFV, and (iii) in US dollars, for deposits in ME and MVDOL.

Article 19 (Transfers to and from Legal Reserve in Securities).

Every seven days, the BCB will transfer from the legal reserve in cash of each Financial Intermediation Entity, the amounts necessary to effect the corresponding transfers to legal reserve in securities, and vice versa.

The movement in reserve accounts will be automatic based on the reserve and deposit reports sent by Financial Intermediation Entities to the BCB.

TITLE IV

OF THE LIQUID ASSET REQUIREMENT FUND (RAL FUND)

Article 20 (Constitution and Investment of the RAL Fund).

The RAL Fund will be constituted by resources transferred every seven days from legal reserve in securities, in accordance with Article 21 preceding.
It will have the following composition:

---

(i) Fondo RAL-MN: national sovereign fixed-income securities with public offering, denominated in MN and, subsidiarily, in cash; (ii) Fondo RAL-MNUFV: national sovereign fixed-income securities with public offering, denominated in MN or UFV and, subsidiarily, in cash; (iii) Fondo RAL-ME: sovereign securities, values, cash, denominated in ME in accordance with investment guidelines approved by the BCB Board of Directors. (iv) Fondo RAL-MVDOL: sovereign securities, values, cash, denominated in ME in accordance with investment guidelines approved by the BCB Board of Directors.

Article 21 (Rights and Responsibilities).

Participating Financial Intermediation Entities shall be beneficiaries of all rights of the RAL Fund, distributed in proportion to their contributions in accordance with the norms established in this Regulation and according to the Financial Services Contract to instrument the Legal Reserve Regulation.

Losses arising from the administration of the RAL Fund shall be distributed in proportion to the contributions made by each of the Financial Intermediation Entities. Under no circumstances shall the BCB assume any responsibility or risk, nor shall it guarantee the results of the RAL Fund. In the case of the RAL-ME and RAL MVDOL Funds, the BCB shall not assume responsibility for the quality of their administration.

Article 22 (Administration of the Fund).

The RAL-MN and RAL-MNUFV Funds shall be administered by the BCB Financial Entities Management Department, or by one or more Delegated Administrators expressly contracted by the BCB for such purpose, in accordance with contracts signed with the Financial Intermediation Entities and within the operational guidelines determined by the COMA.

The administration of the RAL-ME and RAL-MVDOL Funds shall be entrusted to one or more specialized entities in Delegated Administration, with recognized technical capacity and international solvency, in accordance with the norms approved by the BCB Board of Directors. The commissions charged by the Delegated Administrators for the administration of the RAL-MN, RAL-MNUFV, RAL-ME, and RAL-MVDOL Funds shall be charged to the resources of the Funds themselves. The BCB Board of Directors shall incorporate into the Commission and Other Income Table, the commissions that the BCB will charge for the administration of the RAL-MN, RAL-MNUFV, RAL-ME, and RAL-MVDOL Funds.

Article 23 (Exemption of Commission for Transfers to the RAL Fund).

Transfer operations of funds between the accounts maintained by Financial Intermediation Entities at the BCB and the RAL Fund shall not be subject to any commission.

Article 24 (Liquidity Loans Collateralized by the RAL Fund).

The resources invested by each participant in the RAL Funds shall serve as collateral for the liquidity credits requested from the BCB, under the following conditions:

First tranche: The Financial Intermediation Entity may access, for a term not exceeding seven days, an amount equivalent to up to 40% of the Financial Intermediation Entity's share in the RAL Fund, in freely available resources, required through a request to the BCB by the means determined by the latter.

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Second tranche: The Financial Intermediation Entity may access an equivalent amount of up to 30% additional in freely available resources for a term not exceeding seven days, prior to written or electronic request to the BCB, justifying the reasons motivating this requirement.

No Financial Intermediation Entity may use the second tranche for more than seven consecutive days or ten discontinuous days during two consecutive reserve periods.

Upon maturity of the loans granted in both the first and second tranches, the BCB shall automatically debit the loaned amount, its interest, and related surcharges, from the current account and reserve account or the reserve account, as applicable, that the Financial Intermediation Entities maintain at the BCB. In case of insufficient funds in the corresponding account, the contributions of securities from the RAL Fund shall be liquidated up to the amount of capital and interest that the entity owes to the BCB.

When the total required by the financial intermediation system does not exceed 7.5% of the RAL-ME and RAL-MVDOL Funds, the BCB shall use its own resources to pay the requirements for freely available resources. If the requirement exceeds said percentage, the BCB may obtain these resources from the RAL Fund or other sources as determined by the BCB Board of Directors.

Article 25 (Interest Rates for Liquidity Loans).

The COMA shall determine the interest rates that will apply to liquidity credits collateralized by the RAL Fund in the first and second tranches.

Article 26 (Internal RAL-ME Fund).

When a percentage higher than the limit of 7.5% defined in Article 24 of this Regulation is observed, the BCB Board of Directors, by express resolution, may authorize that a part of the legal reserve in securities for deposits in ME and MVDOL may be temporarily invested in a new fund in the country, called the Internal RAL-ME Fund. This fund may be constituted with resources representing up to seventy percent (70%) of the RAL-ME and RAL-MVDOL Funds.

The Internal RAL-ME Fund shall be administered by the BCB. The investment guidelines and conditions for the resources of the Internal RAL-ME Fund shall be determined by the BCB Board of Directors by express resolution.

Article 27 (Non-Participation in the RAL Fund).

In the event that any Financial Intermediation Entity decides not to participate in the RAL Fund, under the terms mentioned in Article 20 and following of this Regulation, the balance corresponding to its reserve in securities shall be deposited in an account called "Restricted Legal Reserve Securities Account" at the BCB, earning no yields or costs for the aforementioned entity and the resources of this account cannot be used as collateral for operations of the Financial Intermediation Entity at the BCB. This account shall be subject to all reserve requirement and constitution conditions stipulated for legal reserve in securities.

Article 28 (Dissolution).

The RAL Fund may only be dissolved by the BCB Board of Directors by express Resolution.

TITLE V
OF THE FUND FOR CREDITS DESTINED TO THE PRODUCTIVE SECTOR AND SOCIAL HOUSING

Article 29 (Constitution of the Fund for Credits destined to the Productive Sector and Social Housing).

The Fund for Credits destined to the Productive Sector and Social Housing (CPVIS Fund) is constituted at the BCB with the resources released from the RAL-ME Fund by the application of the legal reserve rates in securities in ME and MVDOL determined in this regulation. The participation of each EIF in the CPVIS Fund shall be equal to its participation in the released RAL-ME Fund.

Article 30 (Rights and Responsibilities).

Participating Financial Intermediation Entities shall be beneficiaries of all rights of the Fund for Credits destined to the Productive Sector and Social Housing.

Article 31 (Liquidity Loans in MN Collateralized by the Fund for Credits destined to the Productive Sector and Social Housing).

The resources of each participant in the CPVIS Fund shall serve as collateral for the liquidity loans in MN requested from the BCB, under the following conditions:

1. EIFs may request liquidity loans from the BCB in MN at an interest rate of 0%, with the purpose of increasing their loan portfolio destined to the productive sector and social housing in national currency. These loans may be requested from the constitution of the CPVIS Fund until December 28, 2017.
2. The maximum amount of accumulated liquidity loans shall be the amount of each EIF's participation in the CPVIS Fund, equivalent in MN at the buying exchange rate. Liquidity loans shall have a maturity date of January 30, 2018, and cannot be cancelled in advance.

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3. With information as of the end of each month, the balance of credits destined to the productive sector and social housing in MN of each entity shall be compared with the balance of April 30, 2017, provided by the ASFI. If this increase is less than the accumulated loans granted by the BCB, the difference shall pay the interest of the MN repo rate on the evaluation date (end of each month), from that date until the EIF has remedied that difference.

4. For the purposes of the comparison indicated in point (3) above, EIFs must send to the BCB a letter in the form of a sworn declaration, with a copy to the ASFI, with information on their credits from the Productive Sector and Social Housing as of the end of each month, until the 5th business day of the following month. For cooperatives, the total gross portfolio shall be considered.

5. In the event that an EIF requires demonstrating compliance with the increase in the portfolio on a date other than the end of the month to remedy the difference indicated in point (3), it may send to the BCB, with a copy to the ASFI, a letter in the form of a sworn declaration with this information within a maximum term of five business days after the compliance with the increase in the portfolio.

6. In the event that the EIF does not send the letters cited in the two previous points within the established deadlines, the ASFI shall apply the corresponding fines.

7. Credits destined to the productive sector shall be understood as credit operations of business type, microcredit, or SME, whose destination corresponds to the following categories of the Economic Activity Code and Credit Destination (CAEDEC), used by the ASFI:
   a. Agriculture and Livestock; b. Hunting, Forestry, and Fishing;
   c. Extraction of Crude Oil and Natural Gas;
   d. Metallic and Non-Metallic Minerals; e. Manufacturing Industry; f. Production and Distribution of Electricity; g. Construction.
   Likewise, credit operations destined to economic activities of the tourism and intellectual production sectors shall be considered, detailed in Annexes 2 and 3 of the Regulation for Credit Operations to the Productive Sector, contained in the Compilation of Norms for Financial Services of the ASFI.

8. On January 30, 2018, the BCB shall return to EIFs their participation in the CPVIS Fund in ME, prior to the cancellation of their liquidity loans in MN collateralized by the CPVIS Fund. In the event that an EIF does not have sufficient resources in its current or reserve account in MN to pay its liquidity loans, the BCB may offset the difference with its participation in the CPVIS Fund at the buying exchange rate.

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