Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 078/2017

SUBJECT: ECONOMIC POLICY ADVISORY AND FINANCIAL ENTITIES MANAGEMENT MODIFY 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 modifications.
The Legal Reserve Regulation approved by Board Resolution No. 69/2017 of May 22, 2017.
The Report from the Economic Policy Advisory BCB-APEC-SIE-INF-2017-39 of June 2, 2017.
The Report from the Legal Affairs Management BCB-GAL-SANO-DLBCI-INF-2017-133 of June 5, 2017.

CONSIDERING:

That the Political Constitution of the State in its Article 328 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 the BCB, in compliance with what is provided in Article 7 of Law No. 1670, has established a Legal Reserve Regulation of mandatory compliance by Institutions of the Financial System.
That the BCB Statute in Article 11 numeral 7), states that it is the faculty of the Board of Directors 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 in accordance with the Regulation.
That the Legal Reserve Regulation aims to establish the technical and operational conditions of mandatory compliance for financial entities that are

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properly authorized for their operation by the Financial System Supervision Authority, regarding the constitution and form of administration of the legal reserve.

That the Economic Policy Advisory through Report BCB-APEC-SIE-INF-2017-39 recommends the modification of the Legal Reserve Regulation.
That according to Report BCB-GAL-SANO-DLBCI-INF-2017-133, the Legal Affairs Management concludes that the proposed modification indicated is legally appropriate, insofar as it does not contravene the current legal framework, being the competence of the BCB Board of Directors to consider its approval by two-thirds of the votes of all its members, in accordance with what is provided in subsection o) of Article 54 of Law No. 1670 concordant with numeral 29) of Article 11 of the BCB Statute.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Modify numerals 5) and 6) of Article 31 of the Legal Reserve Regulation as follows:

SAYS:

In the event that a Financial Intermediation Entity (EIF) requires demonstrating compliance with the portfolio increase on a date other than month-end to remedy the difference indicated in point (3), it may send to the BCB, with a copy to the ASFI, a letter in the character of a sworn declaration with this information within a maximum period of five business days after the compliance with the portfolio increase.
In the event that the EIF does not send the letters cited in the two previous points within the established deadlines, the ASFI will apply the corresponding fines.

MUST SAY:

“5) In the event that a Financial Intermediation Entity (EIF) requires demonstrating compliance with the portfolio increase on a date other than month-end to remedy the difference indicated in point (3), it must send to the BCB, with a copy to the ASFI, a letter in the character of a sworn declaration with this information within a maximum period of five business days after the compliance with the portfolio increase.

In the event that the EIF does not send the letters cited in the two previous points within the established deadlines, the ASFI will apply the corresponding fines or sanctions.”

Article 2.- The modification to the Legal Reserve Regulation will enter into force as of June 6, 2017.

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Article 3.- The Presidency and General Management are charged with the execution and compliance of this Resolution.

La Paz, June 6, 2017

Pablo Ramos Sánchez
Ronald Polo Rivero
Abraham Pérez Alandia
Sergio Velarde Vera

Board Resolution No. 078/2017