BOARD OF DIRECTORS

BOARD RESOLUTION NO. 125/2022

SUBJECT: LEGAL AFFAIRS MANAGEMENT AND FINANCIAL ENTITIES MANAGEMENT – APPROVAL OF THE REGULATIONS FOR INCENTIVES FOR THE RECOVERY OF CLAIMS OF THE CENTRAL BANK OF BOLIVIA.

VIEWED:

• The Political Constitution of the State of February 7, 2009.
• Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia (BCB).
• Law No. 1356 of December 28, 2022, of the General State Budget Management 2021.
• Law No. 1493 of December 17, 2022, Law of the General State Budget – Management 2023.
• The Statute of the Central Bank of Bolivia approved by Board Resolution No. 095/2022 of October 6, 2022.
• Board Resolution No. 008/2022 of January 11, 2022, which approves the Regulations for Incentives for the Recovery of Claims of the Central Bank of Bolivia.
• Board Resolution No. 098/2022 of October 25, 2022, which approves the Regulations for the Reception and Administration of Credit Portfolios.
• Board Resolution No. 037/2022 of May 3, 2022, which approves the Regulations for Incentives for the Recovery of Claims of the BCB, valid until December 31, 2022, and its modification.
• Technical Report BCB-GAL-SAJU-DLCC1-INF-2022-280 of December 22, 2022, issued jointly by the Legal Affairs Management (GAL) and the Financial Entities Management (GEF).
• Report BCB-GAL-SANO-DLBCI-INF-2022-283 of December 23, 2022, issued by the Legal Affairs Management.

CONSIDERING:

That Article 327 of the Political Constitution of the State establishes that the BCB is a public law institution, with legal personality and its own assets.

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That Article 1 of Law No. 1670 of the BCB states that the BCB is a State institution, of public law, of an autonomous 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 authority of the country with administrative, technical, and financial competence and specialized normative powers of general application.

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

That subsections a) and o) of Article 54 of Law No. 1670 of the BCB establish as attributions of the Board of Directors to issue norms and adopt general decisions that are necessary for the BCB to fulfill the functions, competencies, and powers assigned to it by the Law, and 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 any additional administrative act.

That Article 13 of Law No. 1356 of December 28, 2020, Law of the General State Budget Management 2021 grants incentives for the recovery of claims from non-affiliated credit portfolios owned by the BCB and received in administration from financial intermediation entities, pursuant to specific Laws, Supreme Decrees, and through liquidation processes via the forgiveness of interest and other expenses with a balance to capital equal to or less than USD 80,000.00 (Eighty Thousand 00/100 United States Dollars) or its equivalent in national currency.

That subsection x) of the Eighth Final Provision of Law No. 1493 of December 17, 2022, Law of the General State Budget Management 2023, provides for the validity of Article 13 of Law No. 1356 of December 28, 2020.

That the Statute of the BCB establishes in numerals 1) and 30) of Article 10 that the Board of Directors of the Issuing Entity has the attributions to approve general decisions and issue norms that are necessary for the BCB to fulfill the functions, competencies, and powers assigned to it by the Law, as well as being authorized to approve, modify, and interpret the Statute and Regulations, by two-thirds of all its members, without it being necessary for any additional administrative act.

That numeral 36) of Article 10 of the same legal body authorizes the alienation and administration of portfolios and assets received in pledge from banks in liquidation.

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That Board Resolution 008/2022 of January 11, 2022, valid until December 31, 2022, is the Regulations for Incentives for the Recovery of Claims of the Central Bank of Bolivia.

That, numeral 1) of Article 5 of Board Resolution No. 098/2022 of October 25, 2022, approves the Regulations for the Reception and Administration of Credit Portfolios; as well as, establishes among the functions and responsibilities of the Recovery and Realization of Assets Committee, the evaluation of proposals for strategies and/or policies for the reception, administration, and recovery of the credit portfolio.

The Regulations for Incentives for the Recovery of Claims of the Central Bank of Bolivia, approved by Board Resolution No. 037/2022 of May 3, 2022, valid until May 3, 2022, and its modification.

That report BCB-GAL-SAJU-DLCC1-INF-2022-280, from the GEF and the GAL, recommends to the Board of Directors to approve the proposal for the Regulations for Incentives for the Recovery of Claims of the BCB.

That Report BCB-GAL-SANO-DLBCI-INF-2022-283 from the GAL concludes that the content of the Regulations for Incentives for the Recovery of Claims of the Central Bank of Bolivia, proposed by the GAL and the 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 Regulations for Incentives for the Recovery of Claims in its eight (8) Articles, which form part of this Resolution as an Annex.

Article 2.- The Regulations for Incentives for the Recovery of Claims will enter into force from January 1, 2023.

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

La Paz, December 27, 2022

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

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ANNEX

REGULATIONS FOR INCENTIVES FOR THE RECOVERY OF CLAIMS OF THE CENTRAL BANK OF BOLIVIA

Article 1. (Object).

This regulation aims to regulate the application of incentives for the recovery of claims from non-affiliated credit portfolios owned and administered by the Central Bank of Bolivia (BCB), in accordance with what is provided in Article 13 of Law No. 1356 of December 28, 2020, valid by mandate of subsection x) of the Eighth Final Provision of Law No. 1493 of December 17, 2022, of the General State Budget Management 2023.

Article 2. (Scope of Application).

This Regulation applies to:

I. Credit obligations whose outstanding principal balance is equal to or less than USD 80,000 (Eighty Thousand 00/100 United States Dollars) or its equivalent in national currency from the credit portfolios corresponding to the following financial intermediation entities: Banco de Crédito Oruro S.A., Banco Potosí S.A., Banco del Progreso Nacional S.A.M., Cooperativa San José Obrero Ltda., Banco Boliviano Americano S.A. including the portfolio ceded by FONDESIF, BIDES A (in administration of the BCB), Banco Sur S.A., Mutual La Frontera, Mutual Manutata, Mutual Tarija, Mutual Del Pueblo, Cooperativa Trapetrol, and the credit portfolio of the Former INALPRE administered by the BCB.

II. Obligations from credit portfolios that the BCB receives within the framework of Supreme Decree No. 2068, during the validity of this Regulation.

III. Incentives may be applied to credits in execution, with judicial collection actions at any procedural stage, until before the judicial approval of the auction of the guarantee, as well as to written-off credits.

For credits that have the auction of goods approved by judicial authority, they may benefit from the incentives through the forgiveness, of the balance of the credit resulting from the amortization of the amount resulting from the auction of goods.

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Article 3. (Incentives for Recovery of Claims).

The incentives for the recovery of claims, through the forgiveness of current and penal interest, fines, commissions, and other accessory expenses, which the BCB applies to the credit portfolios mentioned in Article 2 of this Regulation, will be applied according to the following:

Principal Balance expressed in USD	Forgiveness of Current Interest	Forgiveness of Penal, Late Interest, Fines, Commissions, Publications, and Forms
Up to 80,000	100%	100%

Article 4. (Payment Conditions).

I. The debtors or guarantors of the credit portfolios indicated in Article 2 of this Regulation must effect the cancellation of the credit in a single payment, which may be made in cash, deposit, or transfer.

II. In the event that debtors or guarantors have more than one obligation with the BCB, the forgiveness will apply individually per credit.

Article 5. (Payment Procedure with Incentives).

The payment with incentives will be subject to the following:

a) Those interested in benefiting from the incentives must request the settlement of the debt as of the payment date.

b) Obligations in foreign currency may be cancelled in national currency at the official selling exchange rate valid on the payment date.

c) Interested parties must make the payment in BCB cashier offices or through the operational system enabled by the BCB in the Financial System.

d) Subsequently, interested parties will send a copy of the cancellation receipt to the Financial Entities Management of the BCB by physical or electronic means; from that moment on, they may request the Certificate of No Debt.

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e) Verified the payment of the debt, the BCB will proceed with the procedures to release the debtor and guarantors from the obligation.

Article 6. (Subrogation).

The following may make payment with subrogation benefiting from the incentives:

1. Guarantors.

2. Heirs of debtors and guarantors.

3. Co-owners when, as a result of some precautionary measure or judicial mortgage in the judicial execution of a credit, a property in the co-ownership regime has been encumbered.

In other cases of payment with subrogation made by third parties, the incentives determined in this Regulation will not apply.

Article 7. (Exclusions from Incentives).

The incentives established in Article 3 of this Regulation will not include the following concepts:

a) In the event of judicial processes, the payment of professional fees for external lawyers, nor judicial expenses during the processing of the credit collection process, which must be paid in full, and will be included in the settlement.

b) The credit insurance.

c) To the current interest of the credit portfolio of the Former BBA received in pledge for the financial support granted by the BCB.

d) To credits classified as affiliated that were delivered to the BCB in pledge.

Article 8. (Judicial Retentions).

Pending judicial retentions and/or deposits for remittance, collection, and application, cannot be considered in the settlement to be made for the forgiveness provided in Article 3 of this Regulation. They will be released via judicial means if the debtor pays the obligation.