Resolution JPRF-F-2025-0150: Reform of Subsection III "Interest Rates for Active and Passive Operations" of the Central Bank of Ecuador's Interest Rate System

Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Financial Management Governmental Platform. Red Block, 8th floor | Postal Code: 170507 | Quito - Ecuador | Resolution No. JPRF-F-2025-0150 THE FINANCIAL POLICY AND REGULATION BOARD CONSIDERING: That Article 82 of the Constitution of the Republic of Ecuador establishes the right to security, which is based on respect for the Constitution and the existence of prior, clear, public legal norms applied by competent authorities; That Article 84 of the Fundamental Norm states that "(...) every body with normative power shall have the obligation to formally and materially adapt laws and other legal norms to the rights provided for in the Constitution (...)"; That Article 132, number 6 of the Magna Carta grants public control and regulation bodies the authority to issue general norms in matters within their competence, without altering or innovating legal provisions; That Article 226 of the Fundamental Norm mandates that State institutions, their bodies, dependencies, public servants, and persons acting by virtue of a state power shall exercise only the competencies and faculties attributed to them in the Constitution and the law; That Article 227 of the Constitution provides that public administration constitutes a service to the community governed by the principles of effectiveness, efficiency, quality, hierarchy, decentralization, coordination, participation, planning, transparency, and evaluation; That Article 303 of the Fundamental Charter stipulates that the formulation of monetary, credit, exchange, and financial policies is the exclusive faculty of the Executive Branch and shall be implemented through the Central Bank; That Article 308 of the Supreme Norm establishes that financial activities are a public order service and may be exercised with prior State authorization, in accordance with the law; whose fundamental purpose is to preserve deposits and meet financing requirements for the achievement of the country's development objectives; That Article 309 of the Constitution determines that the national financial system is composed of the public, private, and popular and solidary sectors, which intermediated public resources, with specific and differentiated control norms and entities, which will be responsible for preserving its security, stability, transparency, and solidity; That Article 13 of the aforementioned Organic Code creates the Financial Policy and Regulation Board, part of the Executive Branch, as a public law legal entity, responsible for the formulation of credit, financial, securities, insurance, and prepaid comprehensive health care service policy and regulation; That Articles 14, numbers 2 and 3, establish that among the competencies of the Board are: "(...) 2. Issue regulations that allow maintaining the integrity, solidity, sustainability, and stability of the national financial system, securities, insurance, and prepaid comprehensive health care services in accordance with Article 309 of the Constitution of the Republic of Ecuador; 3. Issue micro-prudential regulations for the national financial, securities, insurance, and prepaid comprehensive health care services sectors, based on proposals presented by the respective superintendencies, within their respective scopes of competence and without prejudice to their independence; 4. Formulate policies and issue regulations that promote financial inclusion in the country, in coordination with public and private sector entities related to this area; (...)";

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Financial Management Governmental Platform. Red Block, 8th floor | Postal Code: 170507 | Quito - Ecuador | That Article 14.1, number 7, letter b. of the aforementioned Organic Code provides that it is the function and faculty of the Financial Policy and Regulation Board to issue the prudential regulatory framework to which financial, securities, insurance, and prepaid comprehensive health care service entities must adhere, establishing, among other things, the interest rate system, as provided for in Article 130 of said Code, for active and passive operations of the national financial system and other interest rates required by law, promoting the development of prudent credit: Minimum capital levels, equity, technical equity, and risk weightings of assets, their composition, method of calculation, and modifications; That Article 130 of the aforementioned normative body provides that the Financial Policy and Regulation Board shall establish the interest rate system for active and passive operations of the national financial system and other interest rates required by law; That Article 149 of the aforementioned Organic Code establishes that the Monetary and Financial Policy and Regulation Board has competence to regulate the credit guarantee system; That General Provision Twenty-Ninth of the aforementioned legal body states that in current legislation where reference is made to the "Monetary and Financial Policy and Regulation Board," it shall be replaced by "Financial Policy and Regulation Board"; That Transitory Provision Fifty-Fourth of the aforementioned Organic Code determines that resolutions contained in the Codification of Monetary, Financial, Securities, and Insurance Resolutions of the Monetary and Financial Policy and Regulation Board shall remain in force until the Monetary Policy and Regulation Board and the Financial Policy and Regulation Board decide what is appropriate, within their respective competencies; That Article 15 of the Administrative Organic Code enshrines the principle of responsibility, which establishes that the State shall be liable for damages resulting from the lack or deficiency in the provision of public services or the actions or omissions of its public servants or subjects of private law acting in the exercise of a public power delegated by the State and their dependents, controlled entities, or contractors; That by Resolution No. 133-2015-M of September 29, 2015, the Monetary and Financial Policy and Regulation Board issued the "Norms that regulate interest rates," which are currently consolidated in the Codification of Monetary, Financial, Securities, and Insurance Resolutions of Book I "Monetary and Financial System," Title I "Monetary System," Chapter XI "Interest Rate System and Tariffs of the Central Bank of Ecuador"; That by means of Resolution No. JPRF-F-2024-0110 of June 17, 2024, the Financial Policy and Regulation Board reformed the Credit Guarantee System to encourage the use of guarantees and promote financial inclusion, through mechanisms that allow solutions to limitations in access to credit with adequate backing, based on international best practices; That the Technical Secretary of the Financial Policy and Regulation Board, through Memorandum No. JPRF-ST-2025-0026-M of April 22, 2025, submitted to the President of the Board the Technical Report No. JPRF-CTSF-2025-009 and the Legal Report No. JPRF-CJF-2025-013, both dated April 22, 2025, and the corresponding draft resolution; That the Financial Policy and Regulation Board, in an ordinary session held by technological means, convened on April 24, 2025, and carried out via video conference on April 29, 2025, reviewed Memorandum No. JPRF-ST-2025-0026-M of April 22, 2025, issued by

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Address: Av. Amazonas between Pereira and Unión Nacional de Periodistas, Financial Management Governmental Platform. Red Block, 8th floor | Postal Code: 170507 | Quito - Ecuador | the Technical Secretary of the Board; as well as Technical Report No. JPRF-CTSF-2025-009 and Legal Report No. JPRF-CJF-2025-013 of April 22, 2025, issued by the Technical Coordination of Financial System Policy and Regulation and the Legal Coordination of Financial Policy and Norms, and the corresponding draft resolution; That the Financial Policy and Regulation Board, in an ordinary session held by technological means, convened on April 24, 2025, and carried out via video conference on April 29, 2025, reviewed and approved the following Resolution; and, In exercise of its functions, RESOLVES: SINGLE ARTICLE.- Incorporate the following article immediately after Article 21 of Subsection III "Interest Rate for Active and Passive Operations," Section II "On Interest Rates," Chapter XI "Interest Rate System and Tariffs of the Central Bank of Ecuador," of Title I "Monetary System," Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, with the following text: "Art. 21.1.- For investments or deposits in the national financial system made by public legal entities authorized to provide guarantees, including public resources transferred to trusts, the effective passive interest rate shall not exceed the reference effective passive interest rate for deposit terms, published by the Central Bank of Ecuador, applicable for the corresponding month. FINAL PROVISION.- This Resolution shall enter into force from the present date, without prejudice to its publication in the Official Register. This Resolution shall be published on the website of the Financial Policy and Regulation Board within a maximum term of two days from its issuance. NOTIFY.- Given in the Metropolitan District of Quito, on April 29, 2025. THE PRESIDENT, Master María Paulina Vela Zambrano The resolution above was processed and signed by Master María Paulina Vela Zambrano, President of the Financial Policy and Regulation Board, in the Metropolitan District of Quito, on April 29, 2025.- I CERTIFY. TECHNICAL SECRETARY, Master Luis Alfredo Olivares Murillo