Board Resolution No. 076/2022: Approval of the Legal Reserve Regulation for Financial Intermediation Entities

[Logo: BANCO CENTRAL DE BOLIVIA] [Logo: ESTADO PLURINACIONAL DE BOLIVIA]

D I R E C T O R I O

RESOLUCIÓN DE DIRECTORIO Nº 076/2022

SUBJECT: ECONOMIC POLICY ADVISORY AND FINANCIAL ENTITIES MANAGEMENT – APPROVE THE LEGAL RESERVE REGULATION FOR FINANCIAL INTERMEDIATION ENTITIES.

VIEWED:

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

Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia and its modifications.

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

Supreme Decree No. 4539 of July 7, 2021.

Board Resolution No. 128/2005 of October 21, 2005, which approves the Statute of the Central Bank of Bolivia and its modifications.

Board Resolution No. 018/2020 of February 18, 2020, which approves the Legal Reserve Regulation for FIEs and its modifications.

Report BCB-APEC-SIE-INF-2022-20 of August 25, 2022, issued by the Economic Policy Advisory and the Financial Entities Management.

Report BCB-GAL-SANO-DLBCI-INF-2022-163 of August 25, 2022, issued by the Legal Affairs Management.

CONSIDERING:

That Article 327 of the Political Constitution of the State states that the Central Bank of Bolivia (BCB) is a public law institution, with legal personality and its own assets. Within the framework of the State's economic policy, it is the function of the BCB to maintain the stability of the internal purchasing power of the currency, to contribute to economic and social development.

That Article 328 of the Political Constitution of the State states that the BCB, in coordination with the economic policy determined by the Executive Branch, in addition to those indicated by law, has the following attributes: 1. Determine and execute monetary policy. 2. Execute exchange rate policy. 3. Regulate the payment system. 4. Authorize the issuance of currency. 5. Administer international reserves.

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That Article 1 of Law No. 1670 of the Central Bank of Bolivia, modified by Article 67, section A3, item 1 of Law No. 1864 of June 15, 1998, on Popular Property and Credit, determines that the BCB is an institution of the State, of public law, of an autarkic nature, of indefinite duration, with its own legal personality and assets and with legal domicile in the city of La Paz. It is the sole monetary and exchange rate authority of the country, with administrative, technical and financial competence and specialized regulatory powers of general application.

That Article 6 of Law No. 1670 provides that the BCB will execute monetary policy and regulate the quantity of money and the volume of credit in accordance with its monetary program. To this end, it may issue, place and acquire securities and carry out other open market operations.

That Article 7 of Law No. 1670 determines that the BCB may establish Legal Reserves of mandatory compliance by Banks and FIEs. Its composition, amount, method of calculation, characteristics and remuneration shall be established by the Board of Directors of the Bank, by an absolute majority of votes. The control and supervision of the Legal Reserve shall correspond to the current Authority for the Supervision of the Financial System.

That Article 8 of Law No. 1670 states that the reserve and the deposits constituted in the BCB by banks and financial entities shall not be subject to any type of attachment or retention by third parties.

That Article 37 of Law No. 1670 establishes that the BCB will be the depository of the liquid reserves intended to cover the Legal Reserve and to attend to the payment system and other operations with the BCB of FIEs subject to the authorization and control of the Authority for the Supervision of the Financial System.

That Article 430 of Law No. 393 determines that the BCB may grant liquidity credits to FIEs with the guarantee of the Legal Reserve constituted, as well as with other guarantees determined by the Issuing Entity, in accordance with a regulation approved by its Board of Directors.

That Article 44 of Law No. 1670 provides that the highest authority of the BCB is its Board of Directors, which is responsible for defining its policies, specialized regulations of general application and internal rules; as well as for establishing administrative, operational and financial strategies of the Issuing Entity, approving their respective short and medium-term programs.

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That subsections a), i) and o) of Article 54 of Law No. 1670 indicate as attributes of the BCB Board of Directors to issue the norms and adopt the general decisions that were necessary for the Issuing Entity to fulfill the functions, competencies and powers assigned by the Law; to fix and regulate the administration of the Legal Reserve to which banks and other financial entities must be subject, disposing of the measures for its compliance; as well as to approve, modify and interpret the Statute and Regulations of the BCB by two-thirds of the votes of all its members, without the need for an additional administrative act.

That items 1), 7) and 29) of Article 11 of the BCB Statute determine that the Board of Directors of the Issuing Entity has the attributes to approve general decisions and issue the norms that are necessary for the BCB to fulfill the functions, competencies and powers assigned to it by the Law; to establish by absolute majority of votes, Legal Reserves of mandatory compliance by FIEs and approve their composition, custody and remuneration, in accordance with a Regulation; as well as to approve, modify and interpret the Statute and Regulations of the BCB, by two-thirds of the votes of all its members, without the need for an additional administrative act.

That Supreme Decree No. 4539 aims to comprehensively incentivize the use of electricity with the purpose of contributing to the improvement of the environment, energy savings and efficiency through, among others, financial incentives for the manufacture, assembly and purchase of electric, hybrid motor vehicles and electric and hybrid agricultural machinery.

That Article 26 of the Issuing Entity's Statute stipulates that the Board of Directors pronounces on matters within its competence through resolutions. It may also do so through decisions that will be expressly recorded in the minutes. Likewise, every draft resolution of the Board of Directors must be motivated and justified by a technical report from the Management or Managements to which the subject matter of the resolution corresponds and by a report from the Legal Affairs Management. These reports must be sent to the Board of Directors by the General Management with its recommendation.

That the Economic Policy Advisory and the Financial Entities Management through Report BCB-APEC-SIE-INF-2022-20, conclude and recommend to the Board of Directors the approval of the proposal for the Legal Reserve Regulation for FIEs.

That the Legal Affairs Management, through Report BCB-GAL-SANO-DLBCI-INF-2022-163 concludes that the content of the draft Legal Reserve Regulation for the

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FIEs, proposed by the APEC and GEF is legally viable, since it does not contravene the legal order, recommending to the Board of Directors of the Issuing Entity its approval.

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

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

Article 2.- Repeal Board Resolutions No. 018/2020 of February 18, 2020, No. 44/2020 of March 24, 2020, No. 55/2020 of May 15, 2020, No. 60/2020 of June 29, 2020, No. 71/2020 of July 31, 2020, No. 081/2020 of September 8, 2020, No. 018/2021 of January 21, 2021, No. 047/2021 of March 23, 2021, No. 094/2021 of August 13, 2021, No. 141/2021 of November 30, 2021, No. 147/2021 of December 28, 2021 and No. 046/2022 of June 22, 2022.

Article 3.- This Board Resolution shall enter into force from the date of its publication.

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

La Paz, August 26, 2022

SIGNED. ROGER EDWIN ROJAS ULO, Oscar Ferrufino Morro, Gabriel Herbas Camacho, Gumercindo Héctor Pino Guzmán, Diego Alejandro Pérez Cueto Eulert.

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ANNEX

LEGAL RESERVE REGULATION
FOR FIEs

TITLE I
GENERALITIES

Article 1 (Object).

This Regulation aims to fix and regulate the administration of the Legal Reserve and the resources resulting from its modification, in order to have instruments of monetary regulation and preservation of the stability of the financial system.

Article 2 (Scope of Application).

All FIEs, authorized for their operation by the Authority for the Supervision of the Financial System, are subject to the provisions of this Regulation.

State FIEs or 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 resources from the public in the Plurinational State of Bolivia.

Branches abroad authorized for their operation by the Authority for the Supervision of the Financial System, 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 this Regulation, they must constitute reserve in the amount and modality that allows covering the difference, which will be determined by the Board of Directors of the Central Bank of Bolivia.

Article 3 (Terms and Abbreviations).

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

ASFI: Authority for the Supervision of the Financial System BCB: Central Bank of Bolivia.
COMA: Open Market Operations Committee of the BCB.

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DPF: Fixed Term Deposits.
FIE: Financial Intermediation Entity(ies).
FC: Foreign Currency.
NC: National Currency.
NCUFV: National currency with value maintenance with respect to the UFV.
NCUSD: National currency with value maintenance with respect to the US dollar.
UFV: Housing Development Unit.

Legal Reserve:

It is the proportion of deposits of natural and legal persons that FIEs must maintain as a reserve, in the BCB or through the BCB.

Required Legal Reserve:

Amount that FIEs must deposit in the BCB or in FIEs authorized for Legal Reserve purposes.

Constituted Legal Reserve:

Amount deposited by FIEs in the BCB or in FIEs authorized for Legal Reserve purposes.

Legal Reserve in Cash:

Reserve required and constituted in cash by FIEs, which will be kept on deposit in accounts enabled for this effect.

Legal Reserve in Securities:

Reserve required and constituted in cash by FIEs, to be invested by the BCB or the Delegated Administrators of the RAL-NC, RAL-NCUFV, RAL-FC and RAL-NCUSD Funds in securities, values or authorized instruments.

RAL Fund:

The Liquid Asset Requirement Fund is a closed investment fund constituted solely by the resources contributed by FIEs through Legal Reserve in securities. Each FIE will have its contribution to the RAL Fund registered individually. The RAL Fund is

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constituted by the following denominations: National Currency (RAL-NC Fund), National currency with value maintenance with respect to the UFV (RAL-NCUFV Fund), Foreign Currency (RAL-FC Fund) and National currency with value maintenance with respect to the US dollar (RAL-NCUSD Fund).

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

Fund constituted in the BCB with resources and/or voluntary contributions of FIEs, which can be used by these entities as guarantee to request liquidity loans from the BCB, in accordance with the conditions established in the Regulation.

Fund for credits destined to the productive sector (CPRO):

Fund constituted in the BCB with resources and/or voluntary contributions of FIEs, which can be used by these entities as guarantee to request liquidity loans from the BCB, in accordance with the conditions established in the Regulation.

Fund for Incentive for the Use of Electric and Renewable Energy (FIUSEER):

Fund constituted in the BCB with resources of FIEs, which can be used by these entities as guarantee to request liquidity loans from the BCB, in accordance with the conditions established in the Regulation.

Delegated Administrator of the RAL-NC Fund:

Corresponds to the BCB or to the FIE that acts as Delegated Administrator in the administration of the RAL-NC Fund.

When it is an FIE other than the BCB, it will be selected based on competitive mechanisms and conditions approved by the BCB Board of Directors through an express resolution.

Delegated Administrator of the RAL-NCUFV Fund:

Corresponds to the BCB or to the FIE that acts as Delegated Administrator in the administration of the RAL-NCUFV Fund.

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When it is an FIE other than the BCB, it will be selected based on competitive mechanisms and conditions approved by the BCB Board of Directors through an express resolution.

Delegated Administrator of the RAL-FC Fund:

Corresponds to the BCB or to one or more foreign financial institutions that act as Delegated Administrators in the administration of the RAL-FC Fund abroad, selected based on competitive mechanisms and conditions approved by the BCB Board of Directors through an express resolution.

Delegated Administrator of the RAL-NCUSD Fund:

Corresponds to the BCB or to one or more foreign financial institutions that act as Delegated Administrators in the administration of the RAL-NCUSD Fund abroad, selected based on competitive mechanisms and conditions approved by the BCB Board of Directors through an express resolution.

Legal Reserve Requirement Period:

Period of 14 consecutive days, determined by the ASFI for the purposes of calculating the Required Legal Reserve.

Legal Reserve Constitution Period:

Period of 14 consecutive days, lagging 8 days with respect to the legal reserve requirement period.

Obligations Subject to Reserve (OSE):

They are the liabilities denominated in NC, NCUFV, NCUSD and FC, detailed in articles 4 and 5 of this Regulation. Short-term liabilities with the exterior mentioned in article 7 of this Regulation are excluded from the scope of this definition.

TITLE II
LEGAL RESERVE ON DEMAND OBLIGATIONS, SAVINGS ACCOUNTS, DPF AND OTHER OBLIGATIONS

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Article 4 (Demand, savings and term obligations subject to Legal Reserve).

The FIEs included in article 2 of this Regulation must constitute Legal Reserve in cash and in securities on the liabilities registered in the accounts detailed below:

a) Obligations with the public and with companies with state participation on demand:

• Checking account deposits.
• Inactive checking accounts.
• Demand deposits.
• Certified checks.
• Drafts and transfers payable.
• Collections to be reimbursed.
• Matured securities.
• Fiduciary deposits in checking accounts.
• Fiduciary demand deposits.

b) Obligations with the public and with companies with state participation for savings accounts:

• Savings account deposits.
• Savings account deposits closed due to inactivity.
• Obligations with participants in savings plans.
• Fiduciary deposits in savings accounts.

c) Obligations with the public and with companies with state participation at fixed term:

• Fixed term obligations.
• Fixed term obligations with account notation.

d) Obligations with the public and with companies with state participation restricted:

• Closed checking accounts.
• Savings deposits affected as guarantee.
• Term deposits affected as guarantee.
• Restricted fixed term deposits with account notation.

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e) Other payables:

• Manager's checks.

f) Obligations with banks and financing entities:

• Checking account deposits of financial entities of the country subject to reserve.
• Other demand obligations with financial entities of the country subject to reserve.
• Financing from foreign entities on demand.
• Head office and branches on demand.
• Banks and foreign correspondents on demand.
• Savings account deposits of financial entities of the country subject to reserve.
• Fixed term deposits of financial entities of the country subject to reserve.
• Fixed term deposits of financial entities of the country with account notation subject to reserve.
• Interbank operations.
• Financing from foreign entities at short term of free availability.
• Financing from foreign entities at short term for foreign trade operations.
• Head office and branches at short term of free availability.
• Head office and branches at short term for foreign trade operations.

g) Other obligations with the public, with companies with state participation and with banks and financing entities:

• Judicial deposits.
• Third-party funds for operations in the Bolsín.
• 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 obligations with the public.
• Judicial withholdings.
• Prepaid credit card guarantee deposits.
• Other guarantee deposits.
• Other restricted obligations with the public.
• Obligations with banks and other financial entities subject to Legal Reserve restricted.
• Advance collections from credit card clients.

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Article 5 (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 the DPF	NATIONAL CURRENCY AND NCUFV	FOREIGN CURRENCY AND NCUSD
	Reserve in Securities	Reserve in Cash	Reserve in Securities	Reserve in Cash
From 30 to 360 days	Reserves	Reserves	Reserves	Reserves
Greater than 360 days	No reserve	No reserve	Reserves	No reserve

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

Article 6 (Legal Reserve Rates).

The Legal Reserve rates on the liabilities detailed in article 4 of this Regulation are the following:

a) In NC and NCUFV:
Cash
Five point five percent (5.5%) for cash reserve.
Securities
Three point five percent (3.5%) for securities reserve.

b) In FC and NCUSD:
Cash
Ten percent (10%) for cash reserve.
Securities
Nine percent (9%) for securities reserve for DPF greater than 720 days; and ten percent (10%) for the rest of liabilities.

FIEs must constitute the Legal Reserve in Cash, equivalent to a rate of one hundred percent (100%), on the accounts included in "Other Obligations with the public, with companies with state participation and with banks and financing entities" indicated in article 4 of this Regulation.

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Article 7 (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, will be exempt from the requirement to constitute Legal Reserve.

The following accounts of the FIs are exempt from the application of cash reserve (in all currencies) and securities reserve (in FC and NCUSD):

a) 237.01 Financing from foreign entities at short term of free availability. b) 237.02 Financing from foreign entities at short term for foreign trade operations (for the part that does not maintain exact matching with active operations). c) 237.08 Head office and branches at short term of free availability. d) 237.09 Head office and branches at short term for foreign trade operations (for the part that does not maintain exact matching with active operations).

Article 8 (Registration).

FIEs must register in the BCB, in detail, the DPF referred to in article 5 of this Regulation. Likewise, they must inform the BCB about the redemptions of the same made in a period shorter than the original.

Article 9 (Obligations between FIEs).

Deposits of one FIE in other FIEs will be subject to the Legal Reserve rules established in articles 4 and 5 of this Regulation, in case reserve had not been constituted previously.

TITLE III
CONSTITUTION OF LEGAL RESERVE IN CASH AND IN SECURITIES

Article 10 (Legal Reserve Cash Accounts).

Multiple Banks, SME Banks, the Productive Development Bank, the Public Bank and the Public Development Financial Entity will maintain in the BCB a single account

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

Multiple Banks, SME Banks, the Productive Development Bank, the Public Bank and the Public Development Financial Entity must constitute the 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 attachment or judicial retention by third parties.

The 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 NCUFV.
iii. In US dollars, for deposits in FC and NCUSD.

Article 11 (Compensation between Securities and Cash).

Excesses of Legal Reserve in Cash can compensate for deficiencies of Legal Reserve in Securities. Excesses of Legal Reserve in Securities cannot compensate for deficiencies of Legal Reserve in Cash.

Article 12 (Calculation of Legal Reserve).

All FIEs in the country included in article 2 of this Regulation will maintain daily a Legal Reserve of their liabilities with the public, deposited in the accounts enabled for this effect.

The Required Legal Reserve will comprise the reserve requirements of articles 4 and 5 of this Regulation, calculated as the average of the OSE that each FIE maintains at the end of the day in the Legal Reserve Requirement Period.

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The constituted reserve shall be calculated as the average of the daily balances credited in the respective accounts, during the Reserve Constitution Period.

Article 13 (Reporting of Liabilities Subject to Legal Reserve).

Financial Intermediation Entities (EIFs) must report daily the entirety of their liabilities subject to Legal Reserve, by denomination and by type of deposit, through the financial information system in accordance with what is established by ASFI regulations. The report shall correspond to the liabilities subject to Legal Reserve of the previous business day.

Cash deposits at the Central Bank of Bolivia (BCB) or its correspondents shall be subject to the schedules established by the BCB.

Article 14 (No Compensation for Currencies).

The Legal Reserve in Cash must be constituted in the denomination in which the deposits were captured. Compensations between denominations through the financial information system for the Legal Reserve in Cash are not permitted. The Legal Reserve in Securities must be constituted in accordance with what is established in Article 19 of this Regulation.

Regarding the reserve constituted in UFV-denominated Foreign Currency (MNUFV) and Bolivian Dollar-denominated Foreign Currency (MVDOL), the BCB shall recognize in favor of the EIFs the differential due to the 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 15 (Sanctions for Early Withdrawals of Time Deposits).

Time deposits that maintain any reserve exemption, under what is established in this Regulation, cannot be redeemed early.
The following cases are exempt from this prohibition:

1) Time deposits in Foreign Currency (ME) and MVDOL that, being exempt from constituting Legal Reserve, are redeemed with the sole and exclusive purpose of converting them into deposits in National Currency (MN).
2) Time deposits in MN, MNUFV, ME, and MVDOL that, being exempt from constituting Legal Reserve, are redeemed to comply with fund remittance orders instructed by the Competent Authority. In case the fund remittance order is for an amount less than the value of the Time Deposit, prior to the early redemption of said deposit, its fractionation shall be proceeded with, so that only the amount equivalent to the cited order is redeemed.

When the issuing entity acquires its own time deposit certificates, these must be cancelled and withdrawn from accounting, communicating said withdrawal to the BCB within a period not greater than 48 hours after it occurs.

Article 16 (Funds in Custody).

EIFs may maintain up to 60% of their Legal Reserve in Cash requirement in MN and MNUFV in Funds in Custody in any jurisdiction. Any excess that EIFs maintain above this percentage will not be recognized for reserve purposes.

EIFs must maintain 40% of their Legal Reserve in Cash requirement in ME and MVDOL in Funds in Custody in any jurisdiction. Any excess that EIFs maintain above this percentage will not be recognized for reserve purposes. The global deficiency in Funds in Custody in ME and MVDOL cannot be compensated with excesses of reserve in BCB accounts or reserve in securities.

Article 17 (Cash Movements of Funds at the BCB).

The BCB will charge the commission fixed in the "BCB Service Commissions Table" approved by its Board of Directors, for cash movements of entry or exit of funds to EIFs.

Article 18 (Deposits in Other Currencies).

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

Article 19 (Constitution of Legal Reserve in Securities).

The 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.
iii. In US dollars, for deposits in ME and MVDOL.

Article 20 (Transfers to and from Legal Reserve in Securities).

Every seven days, the BCB will transfer from the Legal Reserve in Cash of each EIF, the amounts necessary to effect the corresponding transfers to the Legal Reserve in Securities and vice versa.

The movement in reserve accounts will be made automatically based on the reserve and deposit reports sent by EIFs to the BCB.

TITLE IV
OF THE LIQUID ASSET REQUIREMENT FUND (FONDO RAL)

Article 21 (Constitution and Investment of the RAL Fund).

The RAL Fund shall be constituted by the resources transferred every seven days from the Legal Reserve in Securities, in accordance with Article 22.

It shall have the following composition:

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

Article 22 (Rights and Responsibilities).

Participating EIFs will 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 Account Opening and Financial Services Contract.

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

Article 23 (Fund Administration).

The RAL Funds-MN and RAL-MNUFV will be administered by the Financial Entities Management of the BCB, or by one or more Delegated Administrators expressly hired by the BCB for such effect, in accordance with contracts signed with EIFs and within the operational guidelines determined by the COMA.

The RAL Funds-ME and RAL-MVDOL will be administered by the Central Bank of Bolivia or by one or more specialized entities in Delegated Administration, with recognized technical capacity and international solvency, in accordance with norms approved by the BCB Board of Directors.

The commissions that Delegated Administrators charge for the administration of the RAL Funds-MN, RAL-MNUFV, RAL-ME, and RAL-MVDOL will be charged to the resources of the Funds themselves. The BCB Board of Directors will incorporate in the "BCB Service Commissions Table" the commissions that the BCB will charge for the administration of the RAL Funds-MN, RAL-MNUFV, RAL-ME, and RAL-MVDOL.

Article 24 (Exemption of Commission for Transfers to the RAL Fund).

Fund transfer operations between the accounts that EIFs maintain at the BCB and the RAL Fund will not be subject to any commission.

Article 25 (Liquidity Loans with Guarantee of the RAL Fund).

The resources invested by each participant in the RAL Funds will serve as guarantee for the liquidity credits they request from the BCB, under the following conditions:

First tranche: The EIF may access for a term not greater than seven days an amount equivalent of up to 40% of the EIF's share in the RAL Fund, in freely available resources, required through request to the BCB by the means it determines.

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

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

Upon maturity of the loans granted in both the first and second tranche, the BCB will automatically debit the amount loaned, its interests and related surcharges, from the current and reserve account or the reserve account, as applicable, that EIFs maintain at the BCB. In case of insufficiency of funds in the corresponding account, the securities contributions of the RAL Fund will be liquidated up to the amount of capital and interests that the entity owes to the BCB.

When the total required by the financial intermediation system does not exceed 7.5% of the RAL Fund-ME and RAL Fund-MVDOL, the BCB will use its own resources to pay the requirements of 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 26 (Interest Rates of Liquidity Loans).

The COMA will determine the interest rates that will be applied to liquidity credits with guarantee of the RAL Fund in the first and second tranche.

Article 27 (Internal RAL Fund-ME).

When a percentage higher than the 7.5% limit defined in Article 25 of this Regulation is observed, the BCB Board of Directors, through express resolution, may authorize that a part of the Legal Reserve in Securities for deposits in ME and MVDOL may be invested temporarily in a new fund in the country, called the Internal RAL Fund-ME. This fund may be constituted with resources representing up to seventy percent (70%) of the RAL Fund-ME and RAL Fund-MVDOL.

The Internal RAL Fund-ME will be administered by the BCB. The investment guidelines and conditions of the resources of the Internal RAL Fund-ME will be determined by the BCB Board of Directors through Express Resolution.

Article 28 (Non-Participation in the RAL Fund).

In case any EIF decides not to participate in the RAL Fund, under the terms mentioned in Article 21 and following of this Regulation, the balance corresponding to its Legal Reserve in Securities will be deposited in an account called "Restricted Legal Reserve Securities Account" at the BCB, without earning yields or costs for the mentioned entity and the resources of this account cannot be used as guarantee for EIF operations at the BCB. This account will be subject to all the reserve requirement and constitution conditions stipulated for the Legal Reserve in Securities.

Article 29 (Dissolution).

The RAL Fund can only be dissolved by the BCB Board of Directors through Express Resolution.

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

Article 30 (Constitution and purpose of the Fund for Credits destined to the Productive Sector and Social Housing II).

The Fund for Credits destined to the Productive Sector and Social Housing II (CPVIS II Fund) is constituted with the available resources resulting from the modifications to the Legal Reserve rates effective from April 30, 2018, and subsequent voluntary contributions.

EIFs may make voluntary contributions to the CPVIS II Fund until November 30, 2023, only with resources in ME deposited in the BCB account at its correspondent bank abroad.

EIFs may request the BCB for the partial or total return of their participation in the CPVIS II Fund that is not guaranteeing liquidity loans in MN. In case EIFs request the return of resources that are guaranteeing liquidity loans in MN, they must first pay them.

The return of voluntary contributions made from February 19, 2019, until November 30, 2023, may be carried out in the EIFs' accounts abroad or in another account abroad that the EIF communicates to the BCB, without the BCB charging the Commission for fund transfer abroad for the financial system, established in the "BCB Service Commissions Table".

Article 31 (Liquidity Loans in MN with Guarantee of the Fund for Credits destined to the Productive Sector and Social Housing II).

The resources of each participant in the CPVIS II Fund will serve as guarantee for the liquidity loans in MN they request from the BCB, under the following conditions:

1. EIFs may request liquidity loans from the BCB in MN at an interest rate of 0%. These loans may be requested until November 30, 2023.
2. The maximum amount of accumulated liquidity loans will be the participation amount of each EIF in the CPVIS II Fund, equivalent in MN at the prevailing buy exchange rate. Liquidity loans will have a maturity date of December 29, 2023. These loans may be paid early.
3. On December 29, 2023, the BCB will return in ME to the EIFs their participation in the CPVIS II Fund prior to cancellation of their liquidity loans in MN with guarantee of the CPVIS II Fund. In case an EIF does not have sufficient resources in its current or reserve account in MN to pay its liquidity loans, the BCB may compensate the difference with its participation in the CPVIS II Fund at the prevailing buy exchange rate.

The return of voluntary contributions made from February 19, 2019 until November 30, 2023, may be carried out in the EIFs' accounts abroad or in another account abroad that the EIF communicates to the BCB, without the BCB charging the Commission for fund transfer abroad, established in the "BCB Service Commissions Table".

Article 32 (Constitution and purpose of the Fund for Credits destined to the Productive Sector and Social Housing III).

The Fund for Credits destined to the Productive Sector and Social Housing III (CPVIS III Fund) is constituted with the available resources resulting from the modifications to the Legal Reserve rates effective from April 8, 2019. The resources in this Fund can be used by EIFs to guarantee liquidity loans of the BCB to the same EIFs in MN.

Article 33 (Liquidity Loans in MN with Guarantee of the Fund for Credits destined to the Productive Sector and Social Housing III).

The resources of each participant in the CPVIS III Fund will serve as guarantee for the liquidity loans in MN they request from the BCB, under the following conditions:

1) EIFs may request liquidity loans from the BCB in MN at an interest rate of 0%. In the case of banks, these loans will have the purpose of increasing their loan portfolio destined to the productive sector and social housing in MN. Additionally, from September 8, 2020, banks may request these loans also to increase their loan portfolio to Savings and Credit Cooperatives (CAC) and Development Financial Institutions (IFD). These loans may be requested until January 3, 2023.

2) The maximum amount of accumulated liquidity loans will be the participation amount of each EIF in the CPVIS III Fund, equivalent in MN at the prevailing buy exchange rate. Liquidity loans will have a maturity date of January 31, 2023.

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 bank will be compared with the balance of December 31, 2018, provided by the ASFI. Additionally, with information as of the end of each month, the balance of credits destined to CAC and IFD in MN of each bank will be compared with the balance of August 31, 2020, provided by the ASFI. If the increment summing both differences is less than the accumulated loans granted by the BCB, the difference will pay the interest of the MN repo rate of the evaluation date (end of each month cut), from said date until the entity has remedied that difference.

4) For the purposes of the comparison indicated in point (3) above, banks with loans guaranteed with the CPVIS III Fund must send to the BCB a letter in the character of a sworn declaration with a copy to the ASFI, with information on their loans to the productive sector, to social housing, to CAC and to IFD, as of the cut date of each month, until the 5th business day of the following month.

5) In case a bank requires demonstrating compliance with the portfolio increase on another date that is not end of month to remedy the difference indicated in point (3), it must send to the BCB, in the character of a sworn declaration, this information within a maximum period of five business days after the compliance with the portfolio increase.

6) In case the bank with loans guaranteed with the CPVIS III Fund does not send the letters cited in the two previous points within the established deadlines, the BCB will communicate the non-compliance to the ASFI so that this authority applies the corresponding fines or sanctions.

7) Credits destined to the productive sector will be understood as the credit operations indicated in Article 1 of Section 2 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 31, 2023, the BCB will return in ME to the EIFs their participation in the CPVIS III Fund prior to cancellation of their liquidity loans in MN with guarantee of the CPVIS III Fund. In case an EIF does not have sufficient resources in its current or reserve account in MN to pay its liquidity loans, the BCB may compensate the difference with its participation in the CPVIS III Fund at the prevailing buy exchange rate. The validity of this Fund may be extended to the extent that the BCB considers pertinent.

Article 34 (Rights and Responsibilities).

Participating EIFs will be beneficiaries of all rights and subject to the responsibilities of the CPVIS II Fund and the CPVIS III Fund.

TITLE VI
OF THE FUND FOR CREDITS IN MN FOR THE ACQUISITION OF NATIONAL PRODUCTS AND THE PAYMENT OF SERVICES OF NATIONAL ORIGIN

Article 35 (Constitution of the Fund for Credits in MN for the Acquisition of National Products and the payment of Services of National Origin).

The Fund for Credits in MN for the Acquisition of National Products and the payment of Services of National Origin (CAPROSEN Fund) is constituted in national currency (CAPROSEN-MN) with the resources of the CAPROSEN-MN Fund and in foreign currency (CAPROSEN-ME) with the resources of the CAPROSEN-ME Fund, which guaranteed liquidity loans with the BCB effective as of August 20, 2021.

Article 36 (Liquidity Loans in MN with Guarantee of the CAPROSEN Fund).

The liquidity loans in MN of the BCB to EIFs with guarantee of their resources in the CAPROSEN Fund granted prior to the approval date of this Regulation, will maintain their established conditions. Liquidity loans will have a maturity date of December 30, 2022. These loans may be paid early.

The MN credits that EIFs grant to their clients for the acquisition of national products and the payment of services of national origin, granted with the resources coming from the liquidity loans indicated in the previous paragraph, must have a term of at least one year and an interest rate not greater than 3% annually.

With information as of the end of each month, the balance of MN credits for the acquisition of national products and the payment of services of national origin of each entity will be compared with the balance of June 30, 2020, provided by the ASFI. If this increment is less than the accumulated loans granted by the BCB, the difference will pay the interest of the MN repo rate of the evaluation date (end of each month cut) plus 50 basis points, from said date until the EIF has remedied that difference.

For the purposes of the comparison indicated in the previous paragraph, EIFs with loans guaranteed with the CAPROSEN Fund must send to the BCB a letter in the character of Sworn Declaration with a copy to the ASFI with information on the credits granted for the acquisition of national products and the payment of services of national origin, as of the cut date of each month, until the 5th business day of the following month.

On December 30, 2022, the BCB will return in MN and ME to the EIFs their participation in the CAPROSEN-MN Fund and CAPROSEN-ME Fund, respectively; prior to cancellation of their liquidity loans in MN with guarantee of these funds. In case an EIF does not have sufficient resources in its current or reserve account in MN to pay its liquidity loans, the BCB may compensate the difference with its participation in the CAPROSEN-MN Fund and, in case of insufficiency of this fund, it will compensate the balance with the CAPROSEN-ME Fund at the prevailing buy exchange rate.

Article 37 (Rights and Responsibilities).

Participating EIFs will be beneficiaries of all rights and subject to the responsibilities of the CAPROSEN Fund.

TITLE VII
OF THE FUND OF INCENTIVE FOR THE USE OF ELECTRICAL AND RENEWABLE ENERGY (FIUSEER)

Article 38 (Constitution of the Fund of Incentive for the Use of Electrical and Renewable Energy).

The Fund of Incentive for the Use of Electrical and Renewable Energy (FIUSEER) is constituted at the BCB, in national currency (FIUSEER-MN) with the resources of the CAPROSEN-MN Fund and in foreign currency (FIUSEER-ME) with the resources of the CAPROSEN-ME Fund that did not guarantee liquidity loans with the BCB as of September 30, 2021.

Article 39 (Liquidity Loans in MN with Guarantee of the FIUSEER).

The resources of each participant in the FIUSEER will serve as guarantee for the liquidity loans in MN they request from the BCB, under the following conditions:

a) The liquidity loans of the BCB to EIFs, guaranteed with the resources of each entity in the FIUSEER, will have an interest rate of 0% and may be requested until November 30, 2023. The loans must be used by EIFs to grant credits in MN in accordance with what is established in Article 3 of Supreme Decree No. 4539 of July 7, 2021. b) The maximum amount of accumulated liquidity loans will be the participation amount of each EIF in the FIUSEER-MN, plus the FIUSEER-ME equivalent in MN at the prevailing buy exchange rate. Liquidity loans will have a maturity date of December 29, 2023. c) The MN credits that EIFs grant to their clients must have a term of at least one year and other conditions established in Supreme Decree No. 4539 of July 7, 2021.

d) The balances, at the end of each month, of loans in national currency (MN) that Financial Intermediation Entities (EIF) grant to their clients will be compared with the balance as of July 31, 2021, provided by the ASFI. If the reported increase is less than the accumulated loans granted by the BCB, the difference will pay interest at the MN repo rate on the evaluation date (end-of-month cutoff) plus 50 basis points, from that date until the next measurement made by the BCB.

e) For the purposes of the comparison indicated in the preceding subsection (d), EIF with loans guaranteed by the FIUSEER-MN must send a letter to the BCB in the form of a Sworn Declaration, with a copy to the ASFI, containing information on the credits granted under the FIUSEER framework, by the 5th business day of the following month. The information included must not consider credits reported in other sworn declarations (Fondos CPVIS III, CAPROSEN, and CPRO).

f) In the event that the bank with loans guaranteed by the FIUSEER does not submit the letter cited in the previous point within the established timeframe, the BCB will communicate the non-compliance to the ASFI so that this authority applies the corresponding fines or sanctions.

g) On December 29, 2023, the BCB will return to the EIF their participation in the FIUSEER-MN and FIUSEER-ME, respectively, in MN and foreign currency (ME), prior to the cancellation of their liquidity loans in MN guaranteed by these funds. 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 FIUSEER-MN and, in case of insufficiency of this fund, it will offset the balance with the FIUSEER-ME at the prevailing buying exchange rate.

h) The validity of the FIUSEER may be extended to the extent that the BCB deems appropriate.

Article 40 (Rights and Responsibilities).

Participating EIF will be beneficiaries of all rights and subject to the responsibilities of the FIUSEER.

TITLE VIII
ON THE FUND FOR CREDITS DESTINED TO THE PRODUCTIVE SECTOR (CPRO)

//26. R.D. Nº 076/2022

Article 41.- (Constitution of the Fund for Credits destined to the Productive Sector).

The Fund for Credits destined to the Productive Sector (Fondo CPRO) is constituted in the BCB, in national currency (Fondo CPRO-MN) with available resources resulting from the modification of the Legal Reserve Rate on Titles in MN-MNUFV effective from January 10, 2022, and in foreign currency (Fondo CPRO-ME) with available resources resulting from the modification of the Legal Reserve Rate on Titles in ME-MVDOL effective from January 10, 2022; in addition to the voluntary contributions of the EIF in ME and deposited in the BCB account at its correspondent bank abroad, made from January 18 to December 30, 2022. The validity of this fund will be until March 31, 2025. The resources of each EIF in the fund will be returned by the BCB upon the expiration of the fund according to what is stipulated in numeral 9 of Article 42.

Article 42 (Loans in MN with Guarantee of the Fund for Credits destined to the Productive Sector).

The resources of each participant in the CPRO Fund will serve as guarantee for the loans in MN that they request from the BCB, under the following conditions:

1. EIF may request loans in MN from the BCB at an interest rate of 0%. These loans will have the following purpose according to the type of entity:
   a. For the case of banks, loans guaranteed by the CPRO Fund will have the purpose of increasing their portfolio of loans in MN destined to the productive sector. b. For the case of EFV, loans guaranteed by the CPRO Fund will have the purpose of increasing their social housing portfolio.
   c. For the case of CAC and IFD, loans guaranteed by the CPRO Fund must be destined to their portfolio of loans in MN, with a participation of the productive sector not less than 50%.
2. Loans may be requested until December 30, 2022. The extension of the loan request period will be reviewed annually by the BCB.
3. The maximum amount of accumulated loans will be the participation amount of each EIF in the CPRO Fund, equivalent in MN to the prevailing buying exchange rate. Loans will have a maturity date of March 31, 2025.

//27. R.D. Nº 076/2022

4. Monthly, the BCB will compare the amount of loans granted to each EIF with the guarantee of their participation in the CPRO Fund, with the increase in the balance of credits disbursed by these entities in MN with respect to December 31, 2021, as established in numeral 1 of this article. If the increase is less than the accumulated loans granted by the BCB, the difference will pay the interest rate of the repo in MN effective on the evaluation date (end-of-month cutoff), from that date until the entity has remedied that difference.
5. For the purposes of the comparison indicated in numeral 4 of this article, EIF with loans guaranteed by the CPRO Fund must send a letter to the BCB in the form of a sworn declaration with information on their credits, with a copy to the ASFI, as established in numeral 1 of this article. The cutoff will be made at the end of each month, until the 5th business day of the following month. The information included must not consider credits reported in other sworn declarations (Fondos CPVIS III, CAPROSEN, and FIUSEER).
6. In the event that an EIF needs to demonstrate compliance with the increase in the portfolio on a date other than the end of the month to remedy the difference indicated in numeral 4 of this article, it must send this information to the BCB, in the form of a sworn declaration, within a maximum period of five business days after the compliance with the increase in the portfolio.
7. In the event that the EIF with loans guaranteed by the CPRO Fund does not submit the letters cited in the previous numerales within the established timeframes, the BCB will communicate the non-compliance to the ASFI so that this authority applies the corresponding fines or sanctions.
8. Credits destined to the productive sector will be understood as credit operations established in numeral 7 of Article 33 of this Regulation.
9. On March 31, 2025, the BCB will return to the EIF, in MN and in ME, respectively, their participation in the CPRO-MN Fund and CPRO-ME Fund, prior to the cancellation of their loans in MN with the guarantee of the fund. In the event that an EIF does not have sufficient resources in its current or reserve account in MN to pay its loans, the BCB may offset the difference with its participation in the CPRO-MN Fund and, in case of insufficiency of this fund, it will offset the balance with the CPRO-ME Fund at the prevailing buying exchange rate. The return of voluntary contributions, at the request of the EIF, may be made in the accounts abroad of the EIF or in another account abroad that the EIF communicates to the BCB, without the BCB charging the Commission for transfer of funds to the

//28. R.D. Nº 076/2022

abroad for the financial system, established in the "Table of Commissions for Services of the BCB".
10. The validity of the CPRO Fund may be extended to the extent that the BCB deems appropriate.

Article 43 (Rights and Responsibilities).

Participating EIF will be beneficiaries of all rights and subject to the responsibilities of the CPRO Fund.

SINGLE FINAL PROVISION.

(Extraordinary Legal Reserve).

EIF that, from April 1, 2020, had generated a Net Gross Credit (NCB) to the non-financial private sector, to IFD, and to CAC lower than the exceptional funds (FE) received through the issuance of DPF in March 2020, must maintain an Extraordinary Legal Reserve (ELE) in cash according to the following conditions:

1. EIF must send a letter to the BCB in the form of a sworn declaration with information on the balance of the NCB at the close of each month, until the 5th business day of the following month.
2. With information provided in numeral 1 of this provision, the BCB will calculate the ELE monthly.
3. For the gross credit to IFD and CAC to be computed in the NCB of the EIF, it must be destined to loans by the IFD and CAC.
4. The ELE will be 100% of the difference between the FE and the NCB.
5. The ELE will be registered in a restricted account in the BCB and will not be remunerated.

EIF that increase their NCB by at least 100% of the FE will be exempt from the ELE; otherwise, the ELE will remain for the difference until that condition is met.