2023-12-28 | RESOLUCIONES DE DIRECTORIO N° 167/2023

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Board Resolution No. 167/2023

The Central Bank of Bolivia amends Articles 13 and 16 of the Currency Material Administration Regulation to authorize the outsourcing of banknote processing to authorized Third-Party Managers (ETMs) under conditions established by the Bank. The amendments introduce quality control thresholds, requiring the return of any daily batch containing more than 1% of misclassified or unsorted notes, which must be redeposited with the Issuer on the same day. These changes apply to the processing of both unfit and fit banknote packages and take effect upon publication of the resolution.

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BOARD OF DIRECTORS

BOARD RESOLUTION NO. 167/2023

SUBJECT: TREASURY MANAGEMENT — AMEND THE REGULATION ON CURRENCY MATERIAL ADMINISTRATION.

SEEN:

  • 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.
  • Board Resolution No. 095/2022 of October 6, 2022, which approves the Statute of the Central Bank of Bolivia (BCB).
  • Board Resolution No. 106/2021 of September 30, 2021, which approves the Regulation on Currency Material Administration and its modifications.
  • Report BCB-GTES-SAMM-DAMM-INF-2023-180 of December 26, 2023, from the Treasury Management (GTES).
  • Report BCB-GAL-SANO-DLBCI-INF-2023-440 of December 27, 2023, from the Legal Affairs Management (GAL).

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: to determine and execute monetary policy, execute exchange rate policy, regulate the payment system, authorize the issuance of currency, and administer international reserves.

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


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with administrative, technical, and financial competence and specialized normative powers of general application.

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 normative rules of general application, and internal rules; as well as establishing administrative, operational, and financial strategies of the Issuer Entity, approving their respective short and medium-term programs.

That subsections a) and o) of Article 54 of Law No. 1670 establish as attributes 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 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 Articles 6 and numerals 1) and 30) of Article 10 of the BCB Statute determine that the Board of Directors of the Issuer Entity has the attributes to approve general decisions and issue norms that are necessary for the BCB to fulfill the functions, competencies, and powers assigned to it by Law; 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, and this must be carried out through a Board Resolution.

That Article 24 refers that resolutions and decisions of the Board of Directors are adopted by a simple majority of votes of the members present in a meeting, except in cases where Law No. 1670 or this Statute require qualified majorities.

That Article 26 of the Statute of the Issuer Entity stipulates that the Board of Directors pronounces itself on matters within its competence through resolutions. Likewise, every draft Board resolution must be motivated and justified by a technical report from the Management or Managements to which the matter subject to 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 Board Resolution No. 106/2021 of September 30, 2021, approves the Regulation on Currency Material Administration and its modifications.

That Article 1 of the Regulation on Currency Material Administration establishes that the BCB is a State institution, of public law, of an autarkic nature, of indefinite duration, with legal personality and its own assets and with legal domicile in the city


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of La Paz. It is the sole monetary and exchange rate authority of the country, with administrative, technical, and financial competence and specialized normative powers of general application.

That Article 13 of the Regulation on Currency Material Administration provides that packages of banknotes classified as unfit will be processed in the BCB's secure environments, in the presence of supervisors from the Financial Institution (EIF) that made the deposit of the packages, and, in case that they have been formed by a Third-Party Manager (ETM) on behalf of this EIF, a supervisor from the ETM may also be present.

That Article 16 of the Regulation on Currency Material Administration provides that packages of banknotes classified as fit will be processed in the BCB's secure environments, in the presence of supervisors from the EIF that made the deposit of the packages, and, in case that they have been formed by an ETM on behalf of this EIF, a supervisor from the ETM may also be present.

That the Treasury Management, through Report BCB-GTES-SAMM-DAMM-INF-2023-180, concludes that the modification of Articles 13 and 16 of the BCB's Regulation on Currency Material Administration is necessary, since it will allow the BCB to have the alternative of contracting external processing services for currency material from authorized companies when appropriate, therefore recommending to the Board of Directors the approval of the proposed regulation modification.

That the Legal Affairs Management, through Report BCB-GAL-SANO-DLBCI-INF-2023-440, concludes that the modification of Articles 13 and 16 of the BCB's Regulation on Currency Material Administration, proposed by GTES, does not contravene the current legal framework; therefore, it is legally appropriate, recommending to the BCB Board of Directors its approval.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA,

RESOLVES:

Article 1. Modify Article 13 of the Regulation on Currency Material Administration approved by Board Resolution No. 106/2021 of September 30, 2021, and its modifications, with the following text:


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"Article 13 (Processing of Unfit Banknotes)

I. Packages of banknotes classified as unfit will be processed in the BCB's secure environments, in the presence of supervisors from the EIF that made the deposit of the packages, and, in case that they have been formed by an ETM on behalf of this EIF, a supervisor from the ETM may also be present.

II. The BCB may contract the services of ETMs for the processing of currency material, which will be carried out in the secure environments of the ETMs according to conditions, controls, security, and surveillance established by the BCB.

III. If, in the processing described in the previous paragraph, the equivalent of more than 1% of fit and/or unsorted and/or misclassified banknotes among banknote families is found in the Batch of Banknotes recounted daily, the return of said batch will be proceeded, which, having been processed by the BCB, must be deposited again with the Issuer Entity on the same day."

Article 2. Modify Article 16 of the Regulation on Currency Material Administration approved by Board Resolution No. 106/2021 of September 30, 2021, and its modifications, with the following text:

"Article 16. (Processing of Fit Banknotes)

I. Packages of banknotes classified as fit will be processed in the BCB's secure environments, in the presence of supervisors from the EIFs that made the deposit of the packages, and, in case that they have been formed by an ETM on behalf of this EIF, a supervisor from the ETM may also be present.

II. The BCB may contract the services of ETMs for the processing of currency material, which will be carried out in the secure environments of the ETMs according to conditions, controls, security, and surveillance established by the BCB.

III. If, in the processing described in the previous paragraph, the equivalent of more than 1% of unfit and/or misclassified


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banknotes among banknote families is found in the Batch of Banknotes recounted daily, the return of said batch will be proceeded, which, having been processed by the BCB, must be deposited again with the Issuer Entity on the same day."

Article 3.- The modification to the Regulation on Currency Material Administration will enter into force from the publication of this Resolution.

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

La Paz, December 28, 2023

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

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