Ley N.º 393, de 21 de agosto de 2013 — Ley de Servicios Financieros (Financial Services Law)

English translation of the Spanish text from asfi.gob.bo (the Spanish text is the official one). Retrieved 2026-10-26.

LAW No. 393 EVO MORALES AYMA CONSTITUTIONAL PRESIDENT OF THE PLURINATIONAL STATE OF BOLIVIA Whereas, the Plurinational Legislative Assembly, has enacted the following Law:

THE PLURINATIONAL LEGISLATIVE ASSEMBLY, D E C R E E S :

LAW OF FINANCIAL SERVICES

TITLE I THE STATE AS HEAD OF THE FINANCIAL SYSTEM

CHAPTER I OBJECT, SCOPE OF APPLICATION AND SOCIAL FUNCTION OF FINANCIAL SERVICES

Article 1. (OBJECT). The object of this Law is to regulate financial intermediation activities and the provision of financial services, as well as the organization and operation of financial entities and providers of financial services; the protection of the financial consumer; and the participation of the State as head of the financial system, ensuring the universality of financial services and guiding their operation in support of the country's economic and social development policies.

Article 2. (SCOPE OF APPLICATION). Financial activities, the provision of financial services and the financial entities that carry out these activities are under the scope of application of this Law.

Article 3. (DEFINITIONS). For the purposes of this Law and its regulations, the definitions included in the Glossary of Financial Terms of the Financial System, contained in the Annex, shall apply.

Article 4. (SOCIAL FUNCTION OF FINANCIAL SERVICES).

I. Financial services must fulfill the social function of contributing to the achievement of the objectives of integral development for living well, eliminating poverty and the social and economic exclusion of the population.

II. The Plurinational State of Bolivia and the financial entities covered by this Law must ensure that the financial services they provide comply at a minimum with the following objectives:

a) Promote integral development for living well.

b) Facilitate universal access to all their services.

c) Provide financial services with quality and warm attention.

d) Ensure the continuity of the services offered.

e) Optimize times and costs in the delivery of financial services.

f) Inform financial consumers about how to use

financial services efficiently and safely.

Article 5. (PREFERENTIAL APPLICATION AND SCOPE OF THE LAW).

I. The provisions contained in this Law are of preferential application over any other legal provision in all that it provides in its different titles.

II. The provisions of this Law constitute the permitted legal framework for the activities of financial entities, and they may not carry out other activities not indicated in this Law.

III. The Central Bank of Bolivia – BCB shall be governed by its own provisions.

CHAPTER II ROLE OF THE PLURINATIONAL STATE IN FINANCIAL ACTIVITY

Article 6. (ACTIVITY OF PUBLIC INTEREST).

I. Financial intermediation activities and the provision of financial services are of public interest and may only be exercised by financial entities authorized in accordance with this Law.

II. In order to safeguard the continuity of financial services and the stability of the financial system, the Executive Branch of the central level of the State, by Supreme Decree, may determine the temporary preventive measures it deems necessary on financial entities, in accordance with the following:

a) The Supreme Decree must state the cause of the measure.

b) The measure adopted must remedy the cause that originates its determination.

III. The operational compliance of the preceding paragraph may be entrusted to the Financial System Supervision Authority – ASFI.

Article 7. (HEAD OF THE FINANCIAL SYSTEM). The State, in exercise of its exclusive competences over the financial system, attributed by the Political Constitution of the State, is the head of the financial system that, through instances of the Executive Branch of the central level of the State, shall define and execute financial policies aimed at guiding and promoting the operation of the financial system in support mainly of the country's productive activities and the growth of the national economy with social equity; it shall encourage savings and their adequate channeling toward productive investment; it shall promote financial inclusion and preserve the stability of the financial system. The Executive Branch of the central level of the State, through the Financial Stability Council headed by the Ministry of Economy and Public Finance, is the head of the financial system and assumes the responsibility of defining the objectives of financial policy within the framework of the principles and values established in the Political Constitution of the State.

Article 8. (REGULATION AND SUPERVISION BY THE STATE).

I. It is an exclusive and non-delegable competence of the Financial System Supervision Authority - ASFI to execute financial regulation and supervision, with the purpose of ensuring the sound operation and development of financial entities and preserving the stability of the financial system, under the postulates of the financial policy established in the Political Constitution of the State.

II. The Financial System Supervision Authority – ASFI is the institution responsible for exercising the functions of regulation, supervision and control of financial entities, based on the provisions of this Law.

III. The Financial System Supervision Authority – ASFI shall issue specific regulations and supervise their compliance within the framework of the regulations issued by the Central Bank of Bolivia – BCB, in the field of the payment system.

CHAPTER III OF THE FINANCIAL STABILITY COUNCIL

Article 9. (CREATION). The Financial Stability Council – CEF is created, as the governing body of the financial system and consultative body for orientation of the financial system, for the application of measures to preserve its stability and efficiency.

Article 10. (OBJECT). The purpose of the Financial Stability Council - CEF is:

I. As governing body, define, propose and execute financial policies aimed at guiding and promoting the functioning of the financial system in support mainly of the country's productive activities and the growth of the national economy with social equity; foster savings and their adequate channeling toward productive investment;

promote financial inclusion and preserve the stability of the financial system.

II. As advisory body, coordinate inter-institutional actions and issue recommendations on the application of macroprudential regulation policies aimed at identifying, controlling and mitigating situations of systemic risk in the financial sector and impact on the national economy.

Article 11. (COMPOSITION).

I. The Financial Stability Council – CEF shall be composed of:

a) The Minister of Economy and Public Finance, as President.

b) The Minister of Development Planning.

c) The President of the Central Bank of Bolivia - BCB.

d) The Executive Director of the Financial System Supervision Authority - ASFI.

e) The Executive Director of the Pensions and Insurance Supervision and Control Authority.

II. The technical secretariat functions shall be exercised by the Financial System Supervision Authority - ASFI.

III. The members of the Financial Stability Council – CEF may delegate their participation to officials of hierarchical rank of their institution, assuming the responsibilities of the decisions adopted by their delegate.

Article 12. (PROPOSALS AND RECOMMENDATIONS OF THE FINANCIAL STABILITY COUNCIL - CEF). The proposals and recommendations of the Financial Stability Council – CEF shall be issued by resolution of the council.

Article 13. (ATTRIBUTIONS). To achieve its purpose, the Financial Stability Council – CEF shall have the following attributions:

a) Define, propose and execute financial policies aimed at guiding and promoting the functioning of the financial system.

b) Issue recommendations on macroprudential regulation.

c) Propose to the Supervision Authorities and the Central Bank of Bolivia - BCB, rules and measures for the development and integration of the financial system.

d) Serve as a consultative body of the Executive Branch in matters of financial stability.

e) The others that are necessary for the achievement of its purpose.

Article 14. (SYSTEMIC RISK). When the Financial Stability Council – CEF determines that there are circumstances of systemic risk for the financial system, it shall issue recommendations for the purpose of preserving a stable and competitive financial system.

CHAPTER IV OF THE FINANCIAL SYSTEM SUPERVISION AUTHORITY

SECTION I INSTITUTIONAL REGIME

Article 15. (NATURE). The Financial System Supervision Authority - ASFI is an institution of public law and indefinite duration, with legal personality, its own patrimony and autonomy of administrative, financial, legal and technical management, with jurisdiction, competence and structure of national scope, under the trusteeship of the Ministry of Economy and Public Finance, and subject to social control.

Article 16. (PURPOSE). The Financial System Supervision Authority – ASFI has the purpose of regulating, controlling and supervising financial services within the framework of the Political Constitution of the State, this Law and the regulatory Supreme Decrees, as well as the activity of the securities market, its intermediaries and auxiliary entities.

Article 17. (OBJECTIVES OF FINANCIAL REGULATION AND SUPERVISION). The objectives of financial regulation and supervision, with respect to financial services, on an indicative and non-limiting basis, are the following:

a) Protect the savings placed in authorized financial intermediation entities, strengthening public confidence in the Bolivian financial system.

b) Promote universal access to financial services.

c) Ensure that financial entities provide efficient and secure financial transactional means that facilitate economic activity and satisfy the financial needs of the financial consumer.

d) Control compliance with the financing policies and targets established by the Executive Branch of the central level of the State.

e) Protect the financial consumer and investigate complaints within its competence.

f) Control financing destined to satisfy the housing needs of persons, mainly social-interest housing for the lower-income population.

g) Promote greater transparency of information in the financial system, as a mechanism that allows financial consumers of supervised entities to access better information on interest rates, commissions, expenses and other conditions for contracting financial services that leads, in turn, to better decision-making on a more informed basis.

h) Ensure the provision of financial services with quality attention.

i) Preserve the stability, solvency and efficiency of the financial system.

Article 18. (EVALUATION OF OBJECTIVES).

I. The Financial System Supervision Authority - ASFI shall annually evaluate the achievement of the objectives set forth in Article 17 and shall submit reports to the Ministry of Economy and Public Finance.

II. The results of these evaluations shall guide the objectives of the financial policy defined by the Executive Branch and of the regulatory policy established by the Financial System Supervision Authority - ASFI.

Article 19. (AUTHORIZATION OF FINANCIAL ACTIVITIES AND SERVICES).

I. Financial activities and the provision of financial services shall be carried out only by entities authorized by the Financial System Supervision Authority - ASFI, according to the types of financial entity defined by this Law.

II. The Financial System Supervision Authority - ASFI shall periodically evaluate the degree of growth and expansion of the financial system, its coverage and its characteristics, guiding the authorization process to improve the degree of coverage and provision of services throughout the national territory.

III. The Financial System Supervision Authority - ASFI shall incorporate into the scope of application of this Law other types of existing or future financial services that are not covered by this Law, as well as financial companies that habitually provide these services.

Article 20. (DESIGNATION OF THE MAXIMUM EXECUTIVE AUTHORITY). The Maximum Executive Authority of the Financial System Supervision Authority - ASFI shall be designated by the President of the Plurinational State of Bolivia for a period of six (6) years, from a list of three candidates proposed by the Plurinational Legislative Assembly, approved by two-thirds of votes.

Article 21. (REQUIREMENTS FOR THE MAXIMUM EXECUTIVE AUTHORITY). To be Executive Director General of the Financial System Supervision Authority -

ASFI, the following requirements must be met:

a) Be Bolivian and a citizen in exercise of their rights.

b) Hold a bachelor's degree in the economic and/or legal field.

c) Have experience in financial or economic matters of no less than ten

(10) years.

d) Not have a final enforceable charge sheet, nor a final enforceable conviction in criminal matters, pending compliance.

Article 22. (REMOVAL OF THE MAXIMUM EXECUTIVE AUTHORITY). The removal or dismissal of the Maximum Executive Authority of the Financial System Supervision Authority - ASFI shall occur for the following causes:

a) Incurring in any impediment, prohibition, or incompatibility provided for in the Political Constitution of the State and this Law.

b) When there is a final enforceable conviction in criminal matters, a final resolution of dismissal in a disciplinary proceeding, or a final enforceable charge sheet, as applicable.

c) Having completed the term of functions for which they were designated in accordance with this Law.

Article 23. (ATTRIBUTIONS).

I. The attributions of the Financial System Supervision Authority - ASFI are the following:

a) Ensure the solvency of the financial system.

b) Guarantee and defend the rights and interests of the financial consumer.

c) Regulate, exercise and supervise the internal and external control system of all financial intermediation activity and complementary financial services, including the Central Bank of Bolivia - BCB.

d) Monitor compliance with the rules governing financial intermediation activity and complementary financial services.

e) Supervise the application of active and passive interest rates offered by financial entities and compliance with the interest rate regime and portfolio levels established by the Executive Branch.

f) Regulate and monitor the correct application of fees, commissions and other charges for services provided by regulated financial entities to their financial consumers.

g) Establish preventive control and surveillance systems.

h) Exercise consolidated supervision of financial groups.

i) Instruct financial entities to constitute additional provisions or increases in paid-in capital to cover future losses not identified by credit, market or operational risks and other existing risks or

when there is a risk that the capital adequacy ratio falls below the established limit.

j) Impose administrative sanctions on financial entities under its control, when they infringe legal and regulatory provisions.

k) Order the mandatory regularization and intervention of financial entities that incur in the causes provided for in Article 511 of this Law.

l) Operate and maintain the information centers provided for by this Law.

m) Enter into agreements or conventions with other foreign regulatory and supervisory bodies of the financial sector for cooperation, training and information exchange.

n) Instruct accounting adjustments and regularizations to financial entities, resulting from their supervision and control work.

o) Revoke operating authorizations of financial entities, for duly substantiated reasons, in accordance with the provisions of this Law.

p) Suspend certain operations of financial entities in a substantiated manner.

q) Supervise the control of money laundering and terrorist financing risks and others established in regulations issued by the Financial Investigations Unit, in accordance with the provisions of specific legal provisions on the matter.

r) Instruct actions to financial entities, to resolve claims and complaints presented by financial consumers, prior opinion of the competent authority.

s) Authorize the incorporation into the scope of regulation of other types of financial services and companies that provide these services.

t) Issue prudential regulations of a general nature, extending to the regulation of accounting regulations for application by financial entities.

u) Enforce this Law and other related legal and regulatory provisions.

v) Reject transfers of shares, when a shareholder directly or indirectly comes to possess five percent (5%) or more of shareholding participation in the financial entity.

w) Control the conformation of the structure of the Bolivian financial system in order to avoid the formation of monopolies or oligopolies, as well as prohibit all practices that restrict the complementarity of financial services among the various financial entities, to the extent that these contribute to the economic and social development of the country.

x) Determine the criteria for classification and evaluation of assets and their provisions, within the framework of a sound balance between the objective of promoting the expansion of credit and banking, with effective management of credit risk, in strict compliance with the provisions of this Law.

y) Determine the criteria for comprehensive risk management and the requirements for provisions and capital derived from exposures to different risks.

z) Propose to the Executive Branch, through the Ministry of Economy and Public Finance, the modification of the minimum capital required for the constitution and operation of financial entities, based on the prevailing conditions in the financial system, the macroeconomic situation and external situation.

aa) Issue regulations to regulate advertising or propaganda related to financial services and products offered by entities under its scope, and prohibit or suspend advertising or propaganda when in its judgment it may confuse the public about the operations they are supposed to perform as provided by this Law, or when it may promote serious distortions in the normal development of the financial system.

II. The powers of the Financial System Supervision Authority - ASFI, regarding the regulation of the activity of the securities market, the constitution, operation and liquidation of intermediaries and auxiliary entities thereof, shall be exercised in accordance with the functions provided for the regulatory and supervisory body of the securities market in the legal provisions in force.

Article 24. (OPENING OF OFFICES). To fulfill the functions assigned by the Political Constitution of the State and this Law, the Financial System Supervision Authority - ASFI may establish departmental offices.

Article 25. (LEGAL PRESUMPTION OF VALIDITY OF ACTS). The acts issued by officials of the Ministry of Economy and Public Finance, the Financial System Supervision Authority, the Pension and Insurance Supervision and Control Authority, the Central Bank of Bolivia, the Financial Investigations Unit, as well as by the Interveners, in resolution procedures, liquidation processes with deposit insurance and forced judicial liquidation, in the exercise of their functions in application of the Law, regulations and resolutions, shall be immediately enforceable and shall enjoy the legal presumption of validity, with the burden of proof to the contrary on the one who alleges its irregularity.

Article 26. (BUDGET OF THE FINANCIAL SYSTEM SUPERVISION AUTHORITY).

I. The annual budget of the Financial System Supervision Authority - ASFI shall be covered by the entities it regulates, including the Central Bank of Bolivia - BCB, through assessments.

II. The annual amount of the assessments of financial entities shall be equivalent to one per thousand (1‰), applicable on the total of their assets and contingent operations. The quota of the Central Bank of Bolivia - BCB shall be established annually by supreme resolution, which may not exceed half per thousand (0.5‰) of its assets and contingents.

III. The Financial System Supervision Authority - ASFI shall not receive economic support from the General Treasury of the State - TGE, for the regulation and supervision of the financial intermediation market.

Article 27. (INFORMATION). The Central Bank of Bolivia - BCB and the Financial System Supervision Authority - ASFI shall provide diligently and timely, information and studies that the Ministry of Economy and Public Finance requires for the analysis and formulation of financial policies; within the framework of the right to reserve and confidentiality of information.

SECTION II OF THE CONTROL AND SUPERVISION FUNCTIONS

Article 28. (SCOPE OF CONTROL). The Financial System Supervision Authority - ASFI shall perform the control and supervision functions of the activities of financial entities in accordance with this Law and its regulatory norms.

Article 29. (REQUEST FOR INFORMATION).

I. The Financial System Supervision Authority - ASFI shall require from each entity under its scope of competence the document or documents, reports or others necessary, within the framework of its attributions.

II. The information requested by electronic means, with the support of electronic signatures, shall have full validity and probative force for all purposes.

Article 30. (SCOPE OF THE SUPERVISION FACULTY).

I. The faculty of the Financial System Supervision Authority - ASFI to inspect and supervise financial entities includes any office or dependency thereof, in the country or abroad, and even patrimonially related companies.

II. This supervision and inspection faculty also includes controlling companies and financial companies that are components of financial groups, and shall be developed through supervision on a consolidated basis, in coordination with the Pension and Insurance Supervision and Control Authority, within the framework of the provisions of Title IV, Chapter IV, Section II of this Law.

III. In no case shall financial entities under the supervision scope of the Financial System Supervision Authority - ASFI be subject to supplementary or concurrent inspection or supervision by national, departmental, municipal or university authorities.

Article 31. (FACULTIES IN SUPERVISION TASKS).

I. The Executive Director and the officials of the Financial System Supervision Authority - ASFI who carry out inspections, controls or any supervisory act in a financial entity subject to supervision shall have the following powers:

a) To gather from the financial entity whatever information is necessary to fulfill the purpose of supervision.

b) To require the sworn statement of members of the board of directors, administration and oversight councilors, statutory auditors, oversight inspectors, internal comptrollers, internal auditors, officials and any other person

related to the financial entity.

c) To summon and require the presence of persons related to the scope of its competence, to submit their statement.

d) To require documentation, reports or any document, whether original or copy in physical, electronic or other media.

II. In all cases, the public servant in charge shall document the request and receipt of the information, which must be signed by the participants involved or their representatives. The document shall constitute a sworn statement and shall have evidentiary value as a party statement for all purposes.

Article 32. (INTERNAL AUDIT AND INTERNAL CONTROL SYSTEM).

I. The Financial System Supervision Authority - ASFI must have evidence that financial entities have internal audit units with independent operation and effective internal control systems.

II. The policies of financial entities must include clear rules on delegation of authority and responsibilities and segregation of functions.

Article 33. (EXTERNAL AUDIT).

I. In addition to the general rules governing audits, the Financial System Supervision Authority - ASFI shall regulate the manner of contracting external auditors and shall establish requirements and standards for external audit for the work that external audit firms perform for financial entities subject to its supervision scope; the Financial System Supervision Authority - ASFI shall maintain a registry of authorized external audit firms.

II. The regulations on external auditors issued by the Financial System Supervision Authority - ASFI shall establish mandatory rotation for the contracting of their services by financial entities, establishing a maximum period of three

(3) continuous years for external audit firms in a financial entity. In no case may an external audit firm directly or indirectly perform advisory or consulting work on the matters observed in its opinions.

III. The omission or defective compliance by external auditors of the provisions of this article shall be sanctioned by the Financial System Supervision Authority - ASFI, which may include exclusion from the corresponding registry.

Article 34. (PRESENTATION AND PUBLICATION OF FINANCIAL STATEMENTS).

I. Financial entities shall present to the Financial System Supervision Authority - ASFI, once a year, their financial statements with an external audit opinion, except for some types of complementary financial services companies that the Financial System Supervision Authority - ASFI determines that, due to their characteristics, do not require the presentation of financial statements with an external audit opinion.

II. Financial entities shall publish their financial statements as of 30 June and 31 December of each year, in a newspaper of national circulation.

III. Financial entities shall duly keep the books and documents referring to their operations, microfilmed or recorded on magnetic and electronic media, for

a period of no less than ten (10) years, from the date of the last accounting entry, subject to regulation by the Financial System Supervision Authority - ASFI.

SECTION III RISK-BASED SUPERVISION

Article 35. (RISK-BASED SUPERVISION). The Financial System Supervision Authority - ASFI shall apply risk-based supervision to verify the existence and operation of formalized comprehensive risk management systems in financial entities. For this purpose, by way of example and not limitation, it shall:

a) Evaluate the effectiveness of the entities' systems to manage risks in a timely manner.

b) Control the effectiveness and efficiency of timely control of risks inherent to the financial activities carried out by the entities.

Article 36. (USE OF STANDARD METHODOLOGIES AND INTERNAL MODELS).

I. The Financial System Supervision Authority - ASFI shall determine the methodologies for the comprehensive management of the different types of risks that financial entities must comply with, as well as the corresponding provision and capital requirements for their coverage.

II. Financial entities may develop internal models for the management of their risks, based on sound practices of international acceptance. These models may be applied for the calculation of provision and capital requirements for risk exposures, only with authorization from the Financial System Supervision Authority - ASFI based on the requirements and conditions established in the regulations issued for that purpose.

Article 37. (CLASSIFICATION OF SOLVENCY AND MANAGEMENT).

I. The Financial System Supervision Authority - ASFI shall carry out a periodic evaluation of the solvency levels and management quality of financial intermediation entities, classifying them by levels.

II. The Financial System Supervision Authority - ASFI shall define the criteria for classifying the solvency and management quality levels of financial intermediation entities.

III. The results will be made known to the financial intermediation entities, together with the respective instructions and recommendations in accordance with the corresponding classification.

Article 38. (OVERSIGHT BY THE BOARD OF DIRECTORS OR EQUIVALENT BODY).

I. In the exercise of its supervision functions, the Financial System Supervision Authority - ASFI must evaluate the oversight by the board of directors or equivalent body of the comprehensive risk management process.

II. The Financial System Supervision Authority - ASFI will apply sanctions to the board of directors or equivalent body when the levels of risk exposure are high due to the absence of policies and procedures or because they present weaknesses that limit optimal risk management.

Article 39. (INFORMATION REPORTS).

I. The regulatory provisions issued by the Financial System Supervision Authority - ASFI will establish the requirements and procedures for the reporting of information related to risk management by financial entities.

II. The reports issued must show the impact on processes in relation to the different risks, control and mitigation mechanisms, and provisions and capital coverage.

SECTION IV SANCTION REGIME

Article 40. (ON THE IMPOSITION OF ADMINISTRATIVE SANCTIONS).

I. Every natural or legal person, entities or groups, regardless of their nature or the norm that created them, whether by acts or omissions, that contravene the provisions of this Law, its regulatory or regulatory norms, regulations, norms, statutes and internal policies of the entity and prudential regulation shall be liable, depending on the severity of the case, to the imposition of administrative sanctions.

II. Within the provisions of the preceding paragraph are especially, without being limited to, financial entities, their directors, administration and oversight councilors, trustees, oversight inspectors, internal comptrollers, internal auditors, administrators, managers, general attorneys-in-fact and employees without exception.

III. The administrative sanctions will be applied by the Executive Director of the Financial System Supervision Authority - ASFI, without prejudice to the other sanctions established by Law and the civil or criminal liability that may arise.

IV. The sanctions must be imposed by means of an express and reasoned administrative resolution, mentioning the sanctioned natural or legal person or persons.

V. The imposition of an administrative sanction must be governed by the principles of sanctioning administrative law and especially by due process, the principle of typicity, equality, material truth, non-retroactivity and proportionality.

VI. The imposition of a prior, subsequent or concurrent sanction on the person, entity or groups of persons by another authority, national or foreign, that is not the Financial System Supervision Authority - ASFI, does not prevent or limit the application of this norm.

Article 41. (ON ADMINISTRATIVE SANCTIONS).

I. Depending on the severity of the case, the highest executive authority of the Financial System Supervision Authority - ASFI may impose the following administrative sanctions:

a) Written warning.

b) Pecuniary fine.

c) Temporary suspension of authorization for the opening of new offices, branches, agencies or other points of customer service.

d) Temporary or permanent prohibition to carry out certain activities.

e) Temporary or permanent suspension and disqualification of directors, trustees, managers, administrators and general attorneys-in-fact.

f) Revocation of operating license.

II. Administrative sanctions will be classified based on the following criteria of severity:

a) Maximum Severity. When the infraction by action or omission is not remediable or correctable, is the result of negligence or intent and causes economic damage or harm to the financial entity, the financial consumer and/or third parties and is for the benefit of oneself or third parties.

b) Medium Severity. When the infraction by action or omission has been caused by negligence, lack of skill or fault and causes economic damage or harm to the financial entity, the financial consumer and/or third parties or, as the case may be, is for the benefit of oneself or third parties.

c) Minor Severity. When the infraction by action or omission has been caused in a preterintentional manner and in the result there is no benefit for oneself, for persons related to the offender or third parties.

d) Very Minor Severity. When the infraction by action or omission has been committed by negligence or imprudence of the offender that does not cause economic damage or harm to the entity, financial consumers and in general to any person.

III. The severity of the commission of an act or omission, according to the established categories, will be determined by the Financial System Supervision Authority - ASFI, which may require and carry out all the diligences and investigations it considers necessary in order to establish the severity classification, considering the deadlines established for this purpose.

IV. The Financial System Supervision Authority - ASFI will regulate the application of administrative sanctions for recurring operational errors that do not cause economic damage to third parties and that have characteristics of very minor severity.

Article 42. (SANCTION WITH WRITTEN WARNING).

I. This sanction will apply to infractions of minor severity and very minor severity.

II. Recidivism in the infraction will be sanctioned with a fine.

Article 43. (SANCTION WITH FINE).

I. The Financial System Supervision Authority - ASFI will apply a sanction with a fine in those cases in which the infraction by action or omission is classified as minor severity and very minor severity in case of recidivism and medium severity.

II. In the case of deficiencies in legal compliance and delays in the submission of periodic information by financial entities to the Financial System Supervision Authority - ASFI, the determined fines shall be applied, in accordance with specific regulations issued for that purpose.

III. The maximum pecuniary fines that shall be applied are the following:

a) Very minor severity:

1. For the financial entity, up to zero point three percent (0.3%)

of the minimum capital.

2. Personal fines for internal auditors, administrators, managers, general attorneys-in-fact and employees, up to two (2) times the monthly remuneration of the offender.

3. Personal fines for directors, administration or surveillance councilors, trustees, surveillance inspectors, internal comptrollers or equivalent bodies who only receive attendance fees, the fine may not exceed three (3) times said amount.

b) Minor severity:

1. For the financial entity, up to one point five percent (1.5%) of the minimum capital.

2. Personal fines for internal auditors, administrators, managers, general attorneys-in-fact and employees, up to three (3) times the monthly remuneration of the offender.

3. Personal fines for directors, administration or surveillance councilors, trustees, surveillance inspectors, internal comptrollers or equivalent bodies who only receive attendance fees, the fine may not exceed five (5) times said amount.

c) Medium severity:

1. For the financial entity, up to five percent (5%) of the minimum capital.

2. Personal fines for internal auditors, administrators, managers, general attorneys-in-fact and employees, up to five (5) times the monthly remuneration of the offender.

3. Personal fines for directors, administration or surveillance councilors, trustees, surveillance inspectors, internal comptrollers or equivalent bodies who only receive attendance fees, the fine may not exceed ten (10) times said amount.

IV. The sanctions described in the previous paragraph shall be paid by the financial entity, which shall then seek reimbursement from the responsible persons.

Article 44. (CANCELLATION OF AUTHORIZATION TO OPERATE).

I. The cancellation or revocation of the operating license of a financial entity as well as the suspension, prohibition and permanent disqualification of the offender, shall be applied when the infraction by action or omission is classified as maximum severity.

II. The cancellation or revocation of the operating license shall also apply when the entity is intervened for its liquidation in accordance with the provisions of this Law.

Article 45. (REPARATION OF DAMAGE). The financial consumer may request the

Financial System Supervision Authority - ASFI, that the administrative sanctions include, if applicable, the obligation on the part of the financial entity to cover all expenses, losses, damages and injuries caused by the transgression of the rules, when the damage does not exceed zero point five percent (0.5%) of the minimum capital required for the financial entity.

Article 46. (STATUTE OF LIMITATIONS).

I. The action of the Financial System Supervision Authority - ASFI to impose sanctions prescribes within a period of two (2) years computable from the date of occurrence of the facts, acts or omissions constituting the infraction.

II. The statute of limitations shall be interrupted by any administrative act or express diligence carried out by the Financial System Supervision Authority - ASFI for the purpose of investigating the fact or infraction allegedly committed, and the computation of the statute of limitations shall resume when the activity that caused the interruption ceases.

III. The statute of limitations shall not apply in cases of permanent infractions.

Article 47. (ON RECIDIVISM).

I. Recidivism shall be considered when the offender sanctioned by administrative resolution commits the same infraction that led to the sanction within the same management period.

II. For the consideration of recidivism, the sanctions imposed by administrative resolution that are final in the administrative venue as of the date of the new infraction must be taken into account.

III. Recidivism in the commission of an infraction by action or omission entails the aggravation of the sanction, implying the immediate application of a greater sanction, in accordance with the following:

a) The first recidivism shall be sanctioned with an increase of up to fifty percent (50%) of the first sanction applied to the infraction for which recidivism was incurred, except in the case of warning sanctions, which shall generate a pecuniary fine.

b) For each recidivism in the commission of an infraction, the sanction shall be aggravated with respect to the last one imposed in accordance with the preceding subparagraph, up to reaching the maximum punishable amount according to the severity classification of the infraction.

c) If the offender commits more than four recidivist infractions, the sanction must be classified with the immediately higher severity and so on until reaching medium severity. In the event that the offender again recidivates four times, the Financial System Supervision Authority - ASFI may assess the infraction as maximum severity or medium severity, depending on the type of infraction committed.

IV. In all the previous cases, the infractions must be remediable.

Article 48. (ON THE COMMISSION OF CRIMES). Acts that may constitute the commission of a crime shall be duly documented for referral, with a report to the Public Ministry, so that it may promote criminal action, in accordance with the provisions of Article 286, Paragraph 1 of the Code of Criminal Procedure.

Article 49. (ON THE PROHIBITION AND SANCTION FOR INFLUENCE PEDDLING).

The directors, members of the board of directors and supervisory board, syndics, supervisory inspectors, internal supervisors, internal auditors, administrators, managers, general attorneys, and employees of a financial entity shall not, in any way, seek to obtain for their own benefit, that of their relatives, or that of third parties, the provision of services by the entity or company in which they carry out their activities, with advantages and under special or extraordinary conditions; nor shall they make use of their influence to obstruct or impede the investigation of a crime by the competent authority. In the event of non-compliance with this rule, the Financial System Supervisory Authority - ASFI shall apply, following due process, the corresponding sanctions within the framework of the Sanctions Regime.

Article 50. (ON LIABILITY FOR REPORTS OR OPINIONS). Internal and external auditors, risk raters, expert appraisers, and evaluators of financial entities who, in the performance of the functions for which they were contracted, lead the financial entity that contracted them, the Financial System Supervisory Authority, the Central Bank of Bolivia, the Pension and Insurance Supervision and Control Authority, or the Ministry of Economy and Public Finance to take erroneous and untimely actions shall be sanctioned by the Financial System Supervisory Authority - ASFI, in accordance with this Law and its regulatory provisions, without prejudice to the other sanctions established by law and the civil or criminal liability to which applicable.

Article 51. (ON THE LIABILITY OF EXTERNAL AUDIT FIRMS).

I. External audit firms whose opinions have underestimated or omitted the disclosure of facts that significantly distort the economic and financial situation reflected in the financial statements subject to the audit examination of financial companies, national or international, or of other sectors that have been involved in the bankruptcy situation, shall be excluded from the register of external audit firms of the Financial System Supervisory Authority - ASFI, by means of a reasoned resolution.

II. The determination set forth in paragraph I above shall also apply when, without having participated directly, the external audit firm has ownership or management links, or is a representative or has representation rights of foreign audit firms that have had or have some degree of participation or responsibility in acts of public corruption abroad or are involved in situations of bankruptcy of foreign companies.

Article 52. (ON JOINT AND SEVERAL LIABILITY). The director, member of the board of directors or supervisory board, statutory auditor, supervisory inspector, internal overseer, internal auditor, administrator, manager, general attorney-in-fact or employee of a financial entity who, with knowledge, carries out or allows prohibited or unauthorized operations under this Law to be carried out, who carry out restricted operations or operations subject to temporary or definitive prohibition by the Financial System Supervisory Authority - ASFI, or who violate the special provisions regulating financial entities, shall be jointly and severally liable to the entity, as provided in Articles 321, 322, 323 and 327 of the Commercial Code, without prejudice to the Financial System Supervisory Authority - ASFI submitting the proceedings to the Public Ministry so that it may bring the criminal action in accordance with the provisions of Article 225 of the Political Constitution of the State.

Article 53. (OBLIGATION TO REPORT ON SANCTIONS IMPOSED).

The sanctions imposed by the highest executive authority of the Financial System Supervisory Authority - ASFI on a financial entity shall be brought to the attention of its board of directors, board of management or highest authority, as applicable, and the entity must

financial entity shall inform the general shareholders' meeting, partners' or associates' assembly, as applicable, about all sanctions imposed.

Article 54. (DESTINATION OF FINES). The fines imposed by the Financial System Supervision Authority - ASFI in application of this Law shall constitute revenue for the General Treasury of the State - TGE.

Article 55. (NON-COMPLIANCE WITH EFFICIENCY AND MANAGEMENT QUALITY STANDARDS). In the case of financial entities that repeatedly fail to comply with the efficiency and management quality standards defined by prudential regulations, the Financial System Supervision Authority - ASFI may apply sanctions in accordance with the administrative sanctioning regime.

Article 56. (NON-COMPLIANCE WITH THE CODE OF CONDUCT). Non-compliance with the code of conduct by a financial entity shall make it liable to sanctions in accordance with the administrative sanctioning regime.

Article 57. (PROHIBITION ON ASSUMING FINES).

I. Personal pecuniary sanctions applied to directors, administration or oversight board members, statutory examiners, oversight inspectors, internal comptrollers, internal auditors, administrators, general attorneys-in-fact and employees must be assumed by the persons on whom the sanction was imposed, and it is prohibited to use resources of the financial entity for this purpose.

II. Shareholders, partners or associates, statutory examiners, oversight inspectors, internal comptrollers, internal auditors, administrators, attorneys-in-fact and managers who approve or consent by their signature or initials to the use of resources of the financial entity for the payment of these personal fines shall be sanctioned by the Financial System Supervision Authority - ASFI with pecuniary fines that in no case may be less than the amount charged to the entity.

Article 58. (REGULATION). The Executive Branch, by Supreme Decree, shall issue regulations for this section, determining the procedure, application, ranges, administrative types, specific infractions and other regulations for the correct application of the sanctions.

CHAPTER V CONTROL OF INTEREST RATES, COMMISSIONS, OTHER CHARGES AND MINIMUM PORTFOLIO ALLOCATIONS

SECTION I INTEREST RATES, COMMISSIONS AND OTHER CHARGES

Article 59. (INTEREST RATE CONTROL REGIME).

I. Active interest rates shall be regulated by the Executive Branch of the central level of the State by Supreme Decree, establishing for financing destined to the productive sector and social interest housing maximum limits within which financial entities may agree with their clients within the framework of the provisions of this Law.

II. In the case of credit operations agreed with a variable rate, the interest rate charged to the client may not exceed the rates established in the Supreme Decree indicated in this Article.

III. The interest rate regime may likewise establish minimum interest rates for deposit operations. The characteristics and conditions of these deposits shall be established in a Supreme Decree.

IV. The Supreme Decree indicated in this Article shall be managed by the Ministry of Economy and Public Finance.

Article 60. (COMMISSION REGIME). The Financial System Supervision Authority - ASFI shall establish the commissions and the maximum levels of commissions, fees and other charges that financial entities may charge financial consumers for the operations and services provided; it may even include the gratuity of some operations and services for social purposes.

Article 61. (CONTROL MECHANISMS AND PROCEDURES). The Financial System Supervision Authority - ASFI, by express regulatory regulation, shall establish the operational mechanisms and procedures for the application and control of the Interest Rate and Commission Control Regime.

Article 62. (MODIFICATION OF INTEREST RATES). Financial intermediation entities may not unilaterally modify the interest rates agreed in contracts for financial intermediation operations when such modification negatively affects the client.

Article 63. (ANNUAL EFFECTIVE INTEREST RATE).

I. The annual effective interest rate shall include all charges, surcharges or additional commissions for any concept or any other action that results in profits or income for the financial entity.

II. Financial intermediation entities shall calculate the annual effective interest rates, fixed or variable, using the formulas and procedures established by the Central Bank of Bolivia - BCB. The issuing entity shall determine the form and periodicity of the reports of said information. This information shall be published with a periodicity no greater than one week by the Central Bank of Bolivia - BCB, in the form determined by its board of directors.

III. In no case may the effective active rate be greater than the limit rate established under the Interest Rate Control Regime.

Article 64. (PROHIBITION OF ADDITIONAL CHARGES). The financial entity may in no case apply commissions, fees, insurance premiums or other charges to financial consumers, for concepts not requested, not agreed or not previously authorized by them.

Article 65. (DUTY TO INFORM THE PUBLIC).

I. Financial entities shall inform the general public of the effective interest rates, default interest, commissions and other charges associated with the different products and services they offer, as well as the timing of their collection and other conditions that affect their application and determination. This information shall be disclosed in a clear, explicit and comprehensible manner, in order to facilitate the comparison of alternatives among different entities.

II. The Financial System Supervision Authority - ASFI shall establish and approve the mechanisms for the disclosure of interest rates in financial intermediation entities.

SECTION II MINIMUM LEVELS OF CREDIT PORTFOLIO

Article 66. (CREDIT PORTFOLIO LEVELS).

I. The State, by Supreme Decree, shall define minimum portfolio levels that financial intermediation entities shall be obliged to comply with, in order to prioritize attention to sectors of the economy within the framework of government policy.

II. In some case, the Financial System Supervision Authority - ASFI, in order to safeguard the stability of the financial system, may determine maximum portfolio levels.

III. The credit portfolio levels shall be reviewed at least once a year.

IV. The portfolio levels shall be calculated taking into account the credit portfolio directly or through other forms of direct or indirect financing, provided that the destination can be verified and new disbursements are generated in accordance with the regulations established for this purpose by the Financial System Supervision Authority - ASFI.

Article 67. (PRIORITIZED SECTORS). The minimum portfolio levels to be established shall prioritize the allocation of resources destined to social interest housing and the productive sector, mainly in the segments of urban and rural micro, small and medium-sized enterprises, artisans and community economic organizations.

Article 68. (STRATEGIC ALLIANCES). Financial intermediation entities that do not have specialized technologies in the provision of financing to the productive sectors of urban and rural micro, small and medium-sized enterprises, artisans and community economic organizations, may establish strategic alliances with other financial entities to comply with the minimum portfolio levels.

Article 69. (CONTROL MECHANISMS AND PROCEDURES). The Financial System Supervision Authority - ASFI shall establish the mechanisms and procedures for the application and control of the minimum and maximum portfolio levels.

CHAPTER VI CONSUMER PROTECTION OF FINANCIAL SERVICES

SECTION I CODE OF CONDUCT AND CONSUMER DEFENSE OFFICE

Article 70. (CODE OF CONDUCT).

I. The Financial System Supervision Authority - ASFI shall regulate the use of the Code of Conduct, which financial entities must implement, aimed at protecting the rights of financial consumers.

II. The Code of Conduct shall establish the minimum guidelines that financial entities must comply with.

Article 71. (MINIMUM CONTENT). The Code of Conduct prepared by the Financial System Supervision Authority - ASFI must contain at a minimum:

a) General basic principles.

b) Handling of information.

c) Quality of customer service.

d) Training, quality of treatment and working conditions of the employees of the financial entity.

e) Handling of claims.

f) Conduct with other institutions.

g) Work environment.

h) Transparency.

Article 72. (NON-COMPLIANCE WITH THE CODE OF CONDUCT). Non-compliance with the code of conduct by a financial entity shall make it liable to sanctions in accordance with

Article 41 of this Law.

Article 73. (FINANCIAL CONSUMER DEFENSE OFFICE).

I. The Financial System Supervision Authority - ASFI shall establish within its organizational structure a specialized Financial Consumer Defense unit, with direct functional dependence on the executive director of the Financial System Supervision Authority - ASFI.

II. The Financial Consumer Defense Office shall coordinate operationally with other national defense offices and the Ministry of Justice.

III. The mission of the Financial Consumer Defense Office shall consist of the defense and protection of the interests of financial consumers against the acts, facts or omissions of financial entities.

IV. The Financial Consumer Defense Office shall be constituted as the second instance for handling claims filed by financial consumers of financial entities, once the claim process before the financial entity has been exhausted.

V. It shall be instituted as a specialized area to carry out analysis and studies on the needs and degree of satisfaction of financial consumers.

VI. The Financial System Supervision Authority - ASFI, through express regulation, shall determine the attributions and functions of the Financial Consumer Defense Office as well as the operational procedures for handling claims.

SECTION II ON THE RIGHTS OF THE CLIENT OR USER OF FINANCIAL SERVICES

Article 74. (RIGHTS OF THE FINANCIAL CONSUMER).

I. Financial consumers enjoy the following rights:

a) To access financial services with equitable treatment, without discrimination on grounds of age, gender, race, religion or cultural identity.

b) To receive financial services under conditions of quality, quantity, timeliness and availability adequate to their economic interests.

c) To receive reliable, extensive, complete, clear, comprehensible,

timely and accessible information from financial entities, regarding the characteristics and conditions of the financial products and services they offer.

d) To receive good service and dignified treatment from financial entities, which must act at all times with due diligence.

e) To access efficient means or channels for claims, if the financial products and services received do not conform to the provisions of the preceding numerals.

f) To confidentiality, with the exceptions established by Law.

g) To make inquiries, petitions and requests.

h) Other rights recognized by legal and regulatory provisions.

II. The regulations issued by the Financial System Supervision Authority - ASFI shall establish rules so that financial entities ensure financial consumers the full exercise of their rights.

Article 75. (SUSPENSION OF RESTRICTIVE AGREEMENTS OR PRACTICES).

I. The Financial System Supervision Authority - ASFI shall order the suspension of agreements and practices by the financial entity that directly or indirectly have the object or effect of preventing, restricting or limiting financial consumers in the exercise of their choice of preferences or any form of discrimination.

II. The suspension of the agreement or practice shall be executed without prejudice to the initiation of the sanctioning procedure.

Article 76. (RESTITUTION OF VIOLATED RIGHTS). When the commercial practices of a financial entity violate or transgress any of the rights of its financial consumers, the Financial System Supervision Authority - ASFI shall order the entity to restitute the violated rights. Without prejudice to this, respecting due process, the Financial System Supervision Authority - ASFI shall initiate ex officio or at the request of a party the sanctioning procedures against those responsible for having caused such damages.

Article 77. (DEFICIENCY IN THE PROVISION OF SERVICES).

I. Deficiencies in the provision of financial services by financial entities, which restrict or limit access, shall be subject to the sanctioning procedure under the charge of the Financial System Supervision Authority - ASFI.

II. Affected financial consumers have the right to file their claim and to have it processed by the Financial System Supervision Authority - ASFI or the financial entity itself.

III. The financial entity is obligated to receive claims and provide written proof thereof. It shall process and issue responses expressly, timely, completely and comprehensibly, within the timeframes established by the regulations of the Financial System Supervision Authority - ASFI.

IV. Regardless of the administrative sanctions that the Financial System Supervision Authority - ASFI could impose on a financial entity for these reasons, financial consumers who consider that they were victims or affected may exercise the corresponding judicial actions against the financial entity and/or its officials to demand reparation for the damages caused by them

through civil proceedings, as long as the procedure established in

Article 45 of this Law has not been applied.

Article 78. (TRANSPARENCY OF INFORMATION). Financial entities have the obligation to establish transparent commercial relationships. In no way shall financial entities hide from their financial consumers the financial and legal situation in which they find themselves. The concealment of information shall make administrators jointly and severally liable for the obligations they incur and the damages they cause.

Article 79. (FINANCIAL EDUCATION).

I. It is the obligation and responsibility of financial entities to design, organize and execute formalized financial education programs for financial consumers, in pursuit of achieving the following objectives:

a) Educate about the main characteristics of financial intermediation services and complementary financial services, their uses and applications, and the benefits and risks represented by contracting them.

b) Inform clearly about the rights and obligations associated with the different products and services they offer.

c) Educate about the rights of financial consumers and the first and second instance claim mechanisms.

d) Inform about the financial system, the role of the Financial System Supervision Authority - ASFI and the nature of the regulations.

II. These programs shall be annual and may be delivered directly by financial entities or through the contracting of specialized academic units, guaranteeing their recurrence over time.

Article 80. (ON THE ADVERTISING OF SERVICES).

I. Financial entities, when advertising their operations, products and financial services, must do so with clear, comprehensible, exact and truthful information, avoiding any circumstance that could lead financial consumers into confusion or error.

II. Financial entities must make their information transparent, and disclose at least through their website, the nominal price and the effective price of all operations, products and services they offer in a clear and comprehensible manner for the financial consumer.

III. The Financial System Supervision Authority - ASFI shall issue regulatory norms of a general nature in relation to the advertising that financial entities will issue.

Article 81. (LIABILITY FOR ACTS OF OFFICIALS). Financial entities shall be jointly and severally liable for the acts or omissions of their officials.

Article 82. (COLLECTION LIMIT FOR SOCIAL INTEREST HOUSING LOANS).

I. When the judicial collection action of a mortgage loan for social interest housing is executed against a borrower who incurred the credit obligation, the judicial collection shall be limited to the judicial auction of the mortgaged real property, with whose proceeds the financial entity shall consider the debt extinguished, even when the amount recovered

is less than the settlement of the credit, any additional patrimonial affectation to the borrower being inadmissible and null.

II. The auction shall be carried out taking into account the commercial value of the real property as the base for the auction.

Article 83. (PUBLICATION OF AUCTIONS).

I. The Financial System Supervision Authority - ASFI shall regulate the publication of auction notices of assets committed to the judicial collection of a credit, as to the minimum size of the notices and that their publication be made in the written press media of greatest circulation in the jurisdiction where the movable or immovable property is located, ensuring that the process is executed with the greatest transparency.

II. It is the obligation of the financial entity to disseminate continuously the auction notices through its internet page.

III. The Financial System Supervision Authority - ASFI must publish in a

special section of its internet page, all the auction notices of judicial collection processes of entities of the financial system, and for this purpose all financial entities must submit updated information, in accordance with regulation.

SECTION III ON CONTRACTS IN FINANCIAL OPERATIONS

Article 84. (REGISTRY OF CONTRACTS).

I. Financial entities are obligated to register in the contracts registry of the Financial System Supervision Authority - ASFI, the formats and models of all standard contracts of authorized operations, prior to their application, in accordance with regulations to be issued by the Financial System Supervision Authority - ASFI.

II. The model contracts of common and recurring operations must be reviewed and approved by the Financial System Supervision Authority - ASFI.

III. In the case of non-recurring or special operations, the Financial System Supervision Authority - ASFI shall limit itself to reviewing and registering the contracts; if the Financial System Supervision Authority - ASFI determines the recurrence of these contracts, it may determine that the provisions of Paragraph II apply.

IV. The Financial System Supervision Authority - ASFI must review that the contracts do not contain abusive clauses, publish them on its electronic site and regulate the operation of their registration.

V. The Financial System Supervision Authority - ASFI must issue a ruling within a maximum term established by Supreme Decree, after the term the positive administrative silence shall proceed.

VI. Financial entities may not operate with contracts that are not in the contract registry of the Financial System Supervision Authority - ASFI.

VII. If a financial entity fails to comply with the determination of this Article, it shall be subject to a sanctioning process, to the reparation of damages if applicable in accordance with Article 45 of this Law. The Financial System Supervision Authority - ASFI shall instruct the immediate rectification of the contract.

Article 85. (PROHIBITION OF EXCESSIVE OR ABUSIVE CLAUSES).

I. In entering into contracts for the operations proper to their corporate purpose, financial entities are prohibited from agreeing to clauses that may unduly affect the client's interests or give rise to excesses or abuses of a dominant position.

II. The clauses of the contracts must be stipulated observing the rights of the financial consumer contained in Title I, Chapter VI, Section II of this Law.

Article 86. (PROHIBITION OF UNILATERAL MODIFICATIONS). Financial entities may not unilaterally modify the terms and conditions agreed in contracts for financial intermediation operations and complementary services, unless such modification benefits the financial consumer.

Article 87. (COLLECTIVE INSURANCE). Any collective insurance to be taken out by financial intermediation entities on behalf of clients must be carried out through public bidding, in accordance with uniform policies established pursuant to the regulations issued by the Pensions and Insurance Supervision and Control Authority. Financial intermediation entities may not charge, under any concept, additional amounts to the premium established by the insurance entity that obtains the bid.

Article 88. (COLLECTION OF CHARGES AND COMMISSIONS).

I. The collection of charges or commissions that do not imply an effective consideration of services or the collection of more than one commission for the same act, fact or event is prohibited.

II. Financial entities may not charge charges or commissions for services not accepted or not expressly requested by the client or user.

III. The financial entity that fails to comply with the determination of this article shall be subject to a sanctioning process, without prejudice to the refund of the improperly made charge or commission collection.

Article 89. (PROHIBITION OF DISCRIMINATORY, ABUSIVE OR RESTRICTIVE PRACTICES). Financial entities, in all their acts and contracts, shall avoid privileges and discriminations, refraining from any practice that has the capacity, purpose or effect of generating any type of undue or arbitrary practice.

Article 90. (TERMINATION OF CONTRACTS).

I. Financial entities are obliged to respect their clients' decisions to terminate the adhesion contracts they have entered into with them, in active, passive, contingent and administration operations, and must carry out the actions conducive to facilitating the conclusion of the contractual relationships, after compliance with the pending obligations on the part of the clients. Financial entities may not apply any charges or commissions due to contract termination.

II. The Financial System Supervision Authority - ASFI shall establish the requirements and procedures for financial entities to carry out the termination of operations, as well as the operating procedures to address claims arising from the application of these contract termination mechanisms.

Article 91. (INFORMATION ON CREDIT WRITE-OFFS). Credit operation contracts must expressly and clearly state the treatment of

written-off debts, their registration, the permanence in the registry and the consequences.

CHAPTER VII RECOURSES

SOLE SECTION REVOCATION RECOURSE, HIERARCHICAL RECOURSE AND CONTENTIOUS ADMINISTRATIVE

Article 92. (REVOCATION AND HIERARCHICAL RECOURSES).

I. Administrative resolutions issued by the Financial System Supervision Authority - ASFI may be challenged through a Revocation and Hierarchical Recourse in accordance with the Administrative Procedure Law and applicable special regulations.

II. Hierarchical resolutions issued by the Ministry of Economy and Public Finance as the last instance body in the administrative sphere within the financial regulation system conclude the administrative route and cause state, leaving the Contentious Administrative Recourse enabled in accordance with Law, once the administrative route has been exhausted.

Article 93. (CHALLENGE OF THE INTERVENTION RESOLUTION).

I. The resolution of the Financial System Supervision Authority - ASFI ordering the intervention in accordance with the provisions of Article 512 of this Law may only be challenged through the contentious administrative route. For this purpose, the claim must be signed by the absolute majority of the members of the former board of directors or equivalent body of the intervened financial intermediation entity.

II. The challenge of the intervention resolution shall not have suspensive effect.

III. No judicial sentence or administrative resolution shall suspend the resolution procedure or the liquidation process with deposit insurance. Nor may attachments or precautionary measures be ordered on the assets or property of the intervened financial intermediation entity during the resolution procedure or liquidation process with deposit insurance. What has been executed in the resolution procedure or liquidation process with deposit insurance may not be left without effect, causing state the actions carried out.

CHAPTER VIII FINANCIAL SERVICES FOR ECONOMIC AND SOCIAL DEVELOPMENT

SECTION I FINANCING FOR PRODUCTIVE DEVELOPMENT

Article 94. (FINANCING FOR THE PRODUCTIVE SECTOR).

I. The State shall participate directly and actively in the design and implementation of measures to improve and promote financing for the productive sector of the economy, through financial entities, in order to achieve an efficient allocation of resources to support productive transformation, job creation and equitable income distribution.

II. These measures shall ensure that the final destination of the resources is financing for activities of the productive chains in their different stages, activities complementary to productive processes, marketing activities in the domestic or external market and other activities related to the productive sphere.

Article 95. (SPECIALIZED TECHNOLOGIES). Financial entities must structure financial products with specialized technologies for financing the productive sector, for the different economic activities, based on the resource needs at each stage of the productive and marketing cycle, so that the requirements and payment conditions are appropriate to the productive activities of individual or group borrowers.

Article 96. (SERVICES COMPLEMENTARY TO PRODUCTION).

I. Financing for the productive sector referred to in Article 94 of this Law must contemplate the allocation of resources to producers for production purposes and to services complementary to production, such as collection, storage, marketing, transportation, productive technology and other services complementary to the productive process required by the producer, in accordance with the definition established for this purpose by the Financial System Supervision Authority - ASFI.

II. Financing for the productive sector may include technical assistance, directly or indirectly, to producers, by financial entities.

Article 97. (GRACE PERIOD). Credit directed to the productive sector for investment purposes must contemplate a grace period in its repayment structure, which shall be established by regulation of the Financial System Supervision Authority - ASFI.

Article 98. (REGULATORY INNOVATIONS). The Financial System Supervision Authority - ASFI shall issue regulations to foster the development and application of financial innovations in the field of microfinance, for the purpose of promoting specialized financing for urban and rural micro, small and medium-sized enterprises in the productive sector.

Part of these innovations are the adaptations made to financial leasing, factoring and warehouse deposit activities, to the characteristics and needs of microfinance.

Article 99. (NON-CONVENTIONAL GUARANTEES).

I. Acceptable guarantees for financing rural and non-rural productive activities must include non-conventional assurance alternatives typical of these activities. Among others, the types of acceptable non-conventional guarantees are: guarantee funds, agricultural insurance, documents in custody of real estate and rural properties, machinery subject or not to registration with or without displacement, contracts or documents committing future sale in the domestic market or for export, guarantees or certifications from community organizations or territorial organizations, products stored in own or rented premises, livestock guarantees, registered intellectual property and other non-conventional alternatives that have the character of a guarantee.

II. The social control of the different territorial organic structures affiliated with the parent organizations may constitute part of these guarantee mechanisms and be an agent of assurance of credit payments.

III. The Financial System Supervision Authority - ASFI shall regulate the types, conditions, requirements, registration, realization and enforcement of non-conventional guarantees.

IV. The portfolio evaluation and rating regimes and the capital adequacy regime shall consider non-conventional guarantees for the purposes of calculating provisions and

the weighting of assets by credit risk factors in productive financing operations.

Article 100. (REGISTRY OF NON-CONVENTIONAL GUARANTEES). The State shall promote the establishment of non-conventional guarantee registry systems to finance productive activities, through public, private or mixed mechanisms. The Financial System Supervision Authority - ASFI shall regulate the requirements and conditions for the operation and functioning of said registries.

SECTION II RURAL FINANCIAL SERVICES

Article 101. (RURAL FINANCIAL PRODUCTS AND SERVICES).

I. The financial system must structure rural financial products and services with the objective of promoting sustainable comprehensive rural development, prioritizing the promotion of agricultural, fisheries and timber and non-timber forestry production, the sound use, transformation, industrialization and marketing of renewable natural resources and all community and associative economic undertakings.

II. Rural financial services must promote and strengthen rural productive economic organizations, artisans, cooperatives, producer associations, and micro, small and medium-sized community agricultural, fisheries and timber and non-timber forestry enterprises in accordance with their cultural and productive identity.

III. Financial intermediation entities must establish a savings and credit regime aimed at rural families, together with other related and complementary financial services, applying specialized financial technologies for these sectors, recognizing non-conventional rural practices.

Article 102. (COMPREHENSIVE DEVELOPMENT SERVICES).

I. Financial intermediation entities with a presence in rural areas of the country may provide comprehensive development services, allowing the complementation of the financial services they provide with non-financial services, under specialized technology and with the restrictions inherent to their nature. The Financial System Supervision Authority - ASFI shall establish through regulation, the provision of comprehensive development services.

II. Non-financial services must be aimed at improving working conditions, social relations of production in the community, the competitiveness and productivity of producers and economic units and associations or community organizations of producers, so that they can contribute more effectively to the economic and social development objectives of rural communities.

Article 103. (FINANCING FOR RURAL PRODUCTIVE DEVELOPMENT).

I. The financial system must favor rural productive development, privileging the provision of direct or indirect financing to peasant, indigenous producers, intercultural communities, artisans and other small-scale economic agents in rural areas, for productive, transformation and commercialization purposes, and also for rural housing, as well as for the formation of community capital of indigenous native peasant peoples, intercultural communities and Afro-Bolivian communities.

II. The Financial System Supervision Authority - ASFI through regulation, shall define the coverage goals oriented in observance of this article, and shall evaluate their level of compliance within the framework of the minimum portfolio levels established in Article 66 of this Law, which must consider the basic conditions of each population.

Article 104. (SPECIALIZED RURAL FINANCING TECHNOLOGIES AND APPROPRIATE REGULATION).

I. Savings and credit services and other financial services provided by financial intermediation entities in rural areas must be adapted to the characteristics of the activities to which rural families are dedicated.

II. The prudential regulations of the Financial System Supervision Authority - ASFI to regulate the provision of savings and credit services in rural areas shall recognize the financial technologies developed by financial entities with a presence in these areas.

III. The effective application of these technologies shall be considered as a mitigating factor of credit risk, for the purposes of calculating the requirement of provisions and the weighting of assets by credit risk factors in determining capital adequacy.

IV. The requirements and conditions of payment shall be adapted to the activities of individual or group borrowers, according to the different stages and productive cycles of exploitation, transformation and commercialization, and the comprehensive nature of the rural economy.

Article 105. (REQUIREMENTS FOR OFFICES IN RURAL AREAS AND SERVICE HOURS). The Financial System Supervision Authority - ASFI shall differentiate the documentary, infrastructure and operational requirements, as well as the prudential regulatory norms for the installation of branches, agencies or other financial service points, for the provision of conventional and non-conventional financial services in rural areas. The regulations must also establish the hours of service to the public in rural areas according to the dynamics of rural activities.

Article 106. (INFORMATION REQUIREMENTS OF THE FINANCIAL SYSTEM SUPERVISION AUTHORITY - ASFI).

I. The information requirements by the Financial System Supervision Authority - ASFI regarding the operations and transactions of financial entities in rural areas shall be adapted to the real possibilities of communication and data transmission systems.

II. The Financial System Supervision Authority - ASFI shall regulate the accounting operations and information reports and deadlines for their submission, adapted to the characteristics of rural areas.

Article 107. (COMPLEMENTARITY BETWEEN FINANCIAL ENTITIES).

I. The provision of financial services in rural areas may be carried out directly or through strategic alliances, based on complementarity between financial entities.

II. Financial entities may sign agreements or contracts to complement each other and establish the terms and conditions for the provision of financial services in rural areas.

III. The Financial System Supervision Authority - ASFI shall review and evaluate these agreements and contracts, to ensure that they effectively fall within the fulfillment of the purpose of economic and social development of these areas.

IV. The Financial System Supervision Authority - ASFI shall regulate the scope of this Article.

SECTION III DEMOCRATIZATION OF FINANCIAL SERVICES

Article 108. (HOURS OF SERVICE TO THE PUBLIC).

I. Financial entities shall comply with the hours of service to the public established by the regulations of the Financial System Supervision Authority - ASFI, according to the characteristics of the economic activity of the areas where they operate. Any exception shall only proceed for reasons of force majeure, which shall be justified before the Financial System Supervision Authority - ASFI.

II. The Financial System Supervision Authority - ASFI may declare suspension of activities of financial entities, in situations of extreme gravity that affect the national interest. Its duration must be limited to what is strictly required by the circumstances.

Article 109. (PROHIBITION OF MONOPOLIES AND OLIGOPOLIES). The monopoly and private oligopoly or the pursuit thereof through mergers between financial entities that harm competition are prohibited, as well as any monopolistic practice and the pursuit by a financial entity of maintaining a dominant position over time, as well as any other form of association or agreement of private natural or legal persons, Bolivian or foreign, that seek control or exclusivity in the provision of certain financial services through the commission of anticompetitive practices in the financial system.

Article 110. (CONTROLS ON THE PROPORTIONAL PARTICIPATION OF ENTITIES).

I. No entity may have an equity participation that makes it incur the prohibition of the preceding Article 109.

II. In the processes of approval of merger or absorption operations between financial intermediation entities or transfers of their shares, the Authority of Supervision of the Financial System - ASFI must take into account the impact that such operations could have on the proportion of participation of the entities in the financial system.

Article 111. (PROHIBITION OF DOMINANT POSITION).

I. Financial entities are prohibited from exercising a dominant position with commercial practices individually or collectively concerted, that prevent or restrict access to certain financial services, limit the right of financial consumers to choose alternatives of financial products or services, or hinder healthy competition among financial entities.

II. In the event that the Authority of Supervision of the Financial System - ASFI determines the existence of any type of contravention of this prohibition, it shall order the immediate reversal or suspension of such commercial practices in accordance with regulations issued for that purpose, without prejudice to the sanctions that may be applicable for the infraction incurred.

Article 112. (COVERAGE). The Executive Body of the central level of the State, by Supreme Decree, shall define the degree of growth and expansion of the coverage of the financial system and other aspects that guarantee the access of all Bolivians to financial services, considering minimum conditions that localities must contain, such as basic services and transportation.

SECTION IV REGISTRY AND CONTROL OF THE SOCIAL FUNCTION OF FINANCIAL SERVICES

Article 113. (SOCIAL BALANCE SHEET AND OTHER REPORTS).

I. Annually, the financial entities determined by the Authority of Supervision of the Financial System - ASFI shall present the social balance sheet in which they shall record information and detailed analysis on the operations carried out to fulfill the social function of contributing to the objectives of economic and social development of the country.

II. The Authority of Supervision of the Financial System - ASFI shall establish the characteristics of said social balance sheet, and of other periodic reports with information related to the verification of compliance with the social function of financial activity, and must include indicators to measure, among others, the following aspects:

a) Financial support for the productive priorities of the strategic sectors of the economy, generating employment and surplus income.

b) The allocation of productive financing to micro, small and medium enterprises, urban and rural, artisans and community organizations.

c) The provision of financial services aimed at the lower-income population.

d) The provision of financial services in geographic areas of lower population density and lower economic and social development, especially rural areas.

e) Financing for new productive ventures or innovations linked to productive activity.

f) Others regulated by the Authority of Supervision of the Financial System

• ASFI, for the purposes of evaluating the degree of compliance with the social function of financial services by financial intermediation entities.

Article 114. (STRATEGIC PLANNING). Financial entities shall prepare their strategic planning, aligning their strategic objectives with the social function they must fulfill, in accordance with the provisions of Paragraph II of Article 113 of this Law.

These plans, duly approved by the board of directors or equivalent body of the entity, must be submitted to the Authority of Supervision of the Financial System - ASFI within the following ten (10)

days of their approval, which may request adjustments when it considers that they do not fall within the social function and must supervise their compliance.

Article 115. (PROFITS DESTINED FOR SOCIAL FUNCTION).

I. Financial intermediation entities shall annually allocate a percentage of their profits, to be defined by supreme decree, for purposes of fulfilling their

social function, without prejudice to the programs that the financial entities themselves execute.

II. In communal financial entities, the portion of profits corresponding to communal capital shall be exempt from the application of this Article.

III. In development financial entities, the portion of profits corresponding to the Foundational Capital shall be exempt from the application of this Article.

Article 116. (SURVEYS ON FINANCIAL SERVICES). The Authority of Supervision of the Financial System - ASFI shall implement annual representative surveys covering all segments of financial consumers in all regions of the country, in order to evaluate their financial needs, the level of attention to them by financial entities and the perceptions of the population regarding the degree of compliance with the social function of financial intermediation entities in the provision of financial services.

TITLE II FINANCIAL SERVICES AND AUTHORIZATION REGIME

CHAPTER I AUTHORIZED FINANCIAL SERVICES

Article 117. (FINANCIAL INTERMEDIATION SERVICES). They are the passive, active and contingent operations as well as services of a financial nature that financial entities authorized by the Financial System Supervision Authority - ASFI are empowered to provide.

Article 118. (PASSIVE OPERATIONS). Financial intermediation entities are empowered to carry out the following passive operations:

a) Receive money deposits in savings accounts, checking accounts, demand and time deposits and issue negotiable and non-negotiable certificates.

b) Issue and place shares of new issuance for capital increase.

c) Issue and place mortgage bonds.

d) Issue and place debt securities.

e) Incur subordinated obligations.

f) Incur credits or obligations with the Central Bank of Bolivia - BCB and with financial entities in the country and abroad.

g) Accept bills of exchange drawn at term against themselves, whose maturities do not exceed one hundred eighty (180) days counted from the date of acceptance and that originate from commerce operations, internal or external, of goods and/or services.

h) Issue traveler's checks.

i) Enter into forward contracts for the purchase and sale of foreign currencies.

Article 119. (ACTIVE, CONTINGENT AND SERVICE OPERATIONS).

I. Financial intermediation entities are authorized to carry out the following active, contingent and service operations, with the limitations of this Law:

a) Grant credits and make short, medium and long-term loans, with personal, mortgage, pledge or other non-conventional guarantees, or a combination thereof.

b) Discount and/or negotiate securities or other documents of commerce obligations, with or without recourse, whose maturity does not exceed one (1) year.

c) Grant guarantees, sureties and other first-demand guarantees.

d) Open, advise, confirm and negotiate letters of credit.

e) Receive bills of exchange or other instruments for collection, as well as carry out collection, payment and transfer operations.

f) Carry out transfers and issue payment orders payable in the country or abroad.

g) Carry out exchange operations and purchase and sale of currencies.

h) Buy, hold and sell coins and bars of gold, silver and precious metals, as well as certificates of ownership of such metals.

i) Buy, hold and sell on own account, securities registered in the securities market registry.

j) Buy, hold and sell on own account, documents representing obligations listed on the stock exchange, issued by financial entities.

k) Buy and sell on own account mercantile documents.

l) Rent safe deposit boxes.

m) Exercise trust commissions and fiduciary operations, including trusts in guarantee, in accordance with regulations by the Financial System Supervision Authority - ASFI.

n) Operate with credit cards and traveler's checks.

o) Act as originator agent in securitization processes.

p) Serve as financial agent for investments or loans in the country, of resources from abroad.

q) Carry out repurchase operations.

r) Carry out movable financial leasing operations up to a limit amount equivalent to UFV200,000.- (Two Hundred Thousand Housing Development Units) and real estate for social housing. These limits may be modified by Supreme Decree.

s) Carry out factoring operations, with exchange invoices or other type of mercantile document authorized by regulation of the Financial System Supervision Authority - ASFI.

t) Carry out derivative operations in different modalities, subject to regulation issued by Supreme Decree.

u) Syndicate with other financial intermediation entities to grant credits or guarantees, subject to regulation of the Financial System Supervision Authority - ASFI, which shall not be considered as an accidental partnership, nor entails joint and several liability among the syndicated entities.

v) Channel resources to other financial entities in the form of loans, solely for purposes of portfolio expansion to the productive sector by the borrowing financial entity

w) Channel resources to other financial entities temporarily for liquidity purposes, subject to regulation of the Financial System Supervision Authority - ASFI.

x) Maintain balances in correspondent banks abroad.

y) Carry out money transfers and issue payment orders payable in the country or abroad, in physical form or by electronic means.

z) Channel financial products and services, authorized in this Law, through mobile devices.

II. Financial intermediation entities issuing a first-demand guarantee must comply with the payment thereof indefectibly, on the business day following the beneficiary's demand, without being able to invoke to abstain from doing so, exceptions or defenses derived from any other relationship, including the underlying one that is guaranteed. The beneficiary's demand shall consist of the written presentation of the payment request accompanied by the document or documents required in the guarantee affirming under oath, that the guaranteed obligation has been breached.

III. Financial intermediation entities authorized to develop the activities mentioned in Subsections i and p, may do so directly or through authorized companies.

Article 120. (OTHER OPERATIONS).

I. Financial entities may acquire and sell real estate to be used in activities proper to the business.

II. Financial entities may request authorization for the realization of operations not provided for in this Law from the Financial System Supervision Authority - ASFI, which must accept or reject the request with general character, by type of entity.

III. The Financial System Supervision Authority - ASFI, ex officio and on a general basis, may authorize the carrying out of other types of operations in financial matters not provided for in this Law.

Article 121. (TERMS IN PASSIVE OPERATIONS). For the purposes of this Law, the passive operations of financial intermediation entities, with regard to term, shall be:

a) At sight, any class of liability whose payment may be required at the simple request of the holder upon presentation of the respective document.

b) At term, liability of any denomination with a determined term greater than or equal to thirty (30) days, whose payment may be required once the agreed term has elapsed or before it in accordance with specific regulations.

c) In savings accounts, they are deposits of money with an indefinite term, subject to the regulations of each Financial Intermediation Entity approved by the Financial System Supervision Authority - ASFI.

Article 122. (TERMS IN ACTIVE OPERATIONS). For the purposes of this Law, the active operations of financial intermediation entities, with regard to term, shall be:

a) Short-term operations, not exceeding one (1) year.

b) Medium-term operations between one (1) year as a minimum and five (5)

years as a maximum.

c) Long-term operations, exceeding five (5) years.

Article 123. (COMPLEMENTARY FINANCIAL SERVICES).

I. For the purposes of this Law, complementary financial services are those offered by complementary financial services companies, authorized by the Financial System Supervision Authority - ASFI, including among these, by way of illustration and not limitation, the following:

a) Financial leasing.

b) Factoring.

c) Deposit services in general deposit warehouses.

d) Administration of clearing and settlement houses.

e) Administration of information bureaus.

f) Activities of transportation of monetary material and securities.

g) Administration of electronic cards.

h) Currency exchange operations.

i) Mobile payment services.

j) Drafts and remittances.

II. These complementary financial services may be offered through single-purpose companies, except for operations authorized by regulation, with the exception of financial leasing which may be carried out by financial intermediation entities up to the limit amount of UFV200,000.- (Two Hundred Thousand Housing Development Units), and the limit amount established for social interest housing subject to modification by Supreme Decree.

Article 124. (OPERATIONS THROUGH ELECTRONIC MEANS).

I. Operations carried out within the framework of the services provided by financial

entities may be carried out through electronic means, which must necessarily comply with security measures that guarantee integrity, confidentiality, authentication and non-repudiation.

II. These operations and the information contained and transmitted as electronic data messages shall have the same legal effects, with sufficient evidentiary validity as if it were a written document with handwritten signature.

III. The electronic signature, security passwords, personal electronic identification number, scanned signatures, telephone banking and other electronic or alternative forms are electronic evidentiary means for transactions.

IV. The Financial System Supervision Authority - ASFI and the Central Bank of Bolivia - BCB, in accordance with their competencies, shall issue regulations establishing the procedure and security regulations for operations, as well as the minimum requirements that entities must comply with to carry out electronic banking, telephone banking and mobile device activities, regulatory regulations of mandatory compliance by financial entities that provide the service.

Article 125. (INVESTMENTS IN OTHER FINANCIAL COMPANIES).

I. Financial intermediation entities may only make investments in financial companies permitted by this Law, according to each type, in accordance with the following:

a) They may invest in shares of complementary financial services companies, insurance sector corporations, investment fund management companies, securitization companies and others in the securities sector and in pension sector companies.

b) They may invest in development banks, which in turn may not invest in shares of the financial intermediation entity that made the investment. These investments shall be consolidated in the investing entity for the calculation of solvency.

II. In financial groups, it is the controlling company of the financial group that may make such investments.

CHAPTER II OF FINANCIAL LEASING

Article 126. (AUTHORIZED ENTITIES). The financial leasing operation may be carried out directly by a financial intermediation entity, by a single-purpose financial leasing company constituted as a complementary financial services company, by commercial companies and manufacturers of capital goods.

Article 127. (LEGAL NATURE). Financial leasing, due to its financial and credit nature, is governed solely by this Law and its regulations, and the regulations of leasing determined in civil matters shall not be applicable.

Article 128. (ASSETS SUBJECT TO FINANCIAL LEASING).

I. All movable and immovable things, trademarks, patents or industrial models, software and other valuable intangibles (immaterial), which are the property of the financial lessor or which the financial lessor has the power to grant in financial leasing and provided they are certain and clearly determined in their genus, may be goods subject to a financial leasing contract.

II. Financial leasing shall not be agreed upon generic things. The asset or assets subject to the financial leasing must be detailed in the respective contract.

Article 129. (OPPOSABILITY IN THE EVENT OF BANKRUPTCY OR PREVENTIVE PROCEEDINGS).

I. In the event of preventive proceedings or bankruptcy of the financial lessor, the financial leasing contract shall continue for the term and under the terms agreed therein, with the other rules established for that purpose by the Commercial Code being observed.

II. In the event of bankruptcy or preventive proceedings of the financial lessee, the rules of the Commercial Code in that regard shall apply.

Article 130. (PURCHASE OPTION).

I. Unless otherwise agreed, the purchase option may be freely assigned by the financial lessee to any natural or legal person, national or foreign, without this altering the legal nature of the financial leasing contract; in such case, the financial lessee, as holder of the right, shall be responsible for complying with all the commitments of the contract, including the payment of installments, and for leaving open the possibility of exercising said purchase option. The parties shall be free to include in the respective contract the conditions for the transfer of the purchase option.

II. The exercise price of the purchase option must be fixed in the contract and must not be greater than twenty percent (20%) of the value of the asset committed in the financial leasing or be determinable according to agreed procedures or guidelines. The purchase option may be exercised at any time by the financial lessee if the parties so agree.

Article 131. (PRICE OF THE PURCHASE OPTION). The financial leasing contract must set the exercise price of the purchase option or establish sufficient elements and/or procedures to determine it.

Article 132. (INSTALLMENTS AND ADVANCE PAYMENTS).

I. The amount, the frequency of each payment as well as the currency in which it must be paid shall be determined by agreement of the parties.

II. The financial leasing contract may provide that payments be made in fixed or variable installments. Where applicable, the installment shall include and separately identify the expenses incurred as a consequence of the financial leasing contract.

III. The financial leasing contract must establish the manner and conditions under which the financial lessee may make advance payments of the installments and of other commitments acquired in the financial leasing transaction.

Article 133. (FORMS OF CHOOSING THE ASSET). The asset subject to the financial leasing contract may:

a) Be purchased by the financial lessor from the person indicated by the financial lessee and/or according to the specifications of the financial lessee or according to catalogs, brochures or detailed descriptions provided by the latter.

b) Be purchased by the financial lessor through the substitution of the financial lessee in a contract that the latter has entered into.

c) Be owned by the financial lessor prior to its contractual relationship with the financial lessee.

d) Be subject to financial leaseback.

e) Be at the legal disposal of the financial lessor by virtue of a title that allows it to constitute a financial leasing over it.

Article 134. (RESPONSIBILITIES, ACTIONS AND WARRANTIES IN THE ACQUISITION OF THE ASSET).

I. In the cases of Subsections a and b of the preceding Article, the financial lessor complies with the contract by acquiring the assets indicated by the financial lessee and placing them at the latter's disposal in the manner and under the conditions contractually agreed between the parties. It is a non-waivable obligation of the financial lessee to specify the specifications of the assets subject to the contract, and it is its exclusive responsibility that said assets are suitable for the use it intends to give them, which must be stated in the contract. In these cases, the financial lessor is not liable for defects and damages of the assets and the financial lessee may claim from the seller or supplier, without the need for assignment, all rights arising from the purchase and sale contract.

II. In the cases of Subsections a, b, d and e of the preceding Article, the financial lessee shall remain obligated to pay the installments established in the financial leasing contract, even if a dispute arises regarding said contract, unless otherwise agreed.

III. In the cases of Subsection c of the preceding Article, as well as in those in which the financial lessor is the manufacturer, importer, seller or builder of the asset given in financial leasing, the financial lessor cannot release itself from the warranty of eviction and/or sanitation. In this case the financial lessor is liable for defects and damages of the assets and the financial lessee shall not remain obligated to pay the installments established in the financial leasing contract in the event of a dispute regarding the same, unless otherwise agreed.

IV. In the cases of Subsection d of the preceding Article, the financial lessor is not liable for eviction and/or sanitation nor for defects and damages of the assets. On the contrary, in the process of transferring the asset to the financial lessor, it is the financial lessee who must be liable for eviction and/or sanitation, unless otherwise agreed.

Article 135. (STRICT LIABILITY). Any damage or harm caused by the asset given in financial leasing to third parties shall be the exclusive responsibility of the financial lessee, provided that it originated after the moment in which the financial lessor placed the asset at the disposal of the financial lessee, as established in the preceding article. The same shall apply with respect to any administrative liability that may be incurred through the use of the asset.

Article 136. (LIABILITY IN THE CASE OF IMPORTATION). The party responsible for the process of importing the asset to be granted under financial lease shall be the financial lessor and shall therefore be responsible for the defects, fines and other legal consequences arising from or related to said process.

Article 137. (INSURANCE). The insurance policies that must be taken out for the assets subject to financial leasing, as well as the minimum terms and conditions they must meet, shall be established by regulation.

Article 138. (GOODS GIVEN UNDER FINANCIAL LEASE AND ASSETS OF THE FINANCIAL LESSEE).

I. The goods given under financial lease, as long as the purchase option is not exercised and the transfer thereof is not perfected, do not form part of the financial lessee's assets and consequently do not form part of the guarantees of the financial lessee's creditors, and any act of the financial lessee that attempts to grant them such status prior to the exercise of the purchase option shall be understood as the crime of Stellionatus.

II. Consequently, said goods may not be subject to attachment, encumbrance or lien actions by any administrative or judicial order against the financial lessee. Any judge who becomes aware of the institution of a precautionary measure over these goods in violation of the provisions of this

Article, must render it without effect upon the mere presentation of the financial lease contract, duly registered. No appeal shall be admitted until the good is released and delivered to the financial lessor.

Article 139. (PAYMENT OF TAXES ON THE PROPERTY OF THE GOOD SUBJECT TO THE CONTRACT). The financial lessor, as owner of the good given under financial lease, is the party obligated to pay the taxes that levy the property of the goods subject to financial leasing.

Article 140. (TERMINATION AND EFFECTS).

I. The financial lessor may unilaterally terminate the financial lease contract by operation of law and without the need for prior judicial declaration, in the event that the financial lessee breaches any of its obligations agreed in said contract. The termination must be communicated by the financial lessor to the financial lessee expressly, by means of a notarized notice. From said notification, the contractual termination shall produce the following effects:

a) The purchase option of the goods, subject of the financial lease contract granted by the financial lessor in favor of the financial lessee, shall be without effect from the notarial notification, and the financial lessor shall be entitled to proceed with the immediate sale of said goods, even if they are still in the possession of the financial lessee.

b) The financial lessee must return to the financial lessor the goods granted under financial lease within five (5) business days counted from the receipt of the notarial notification. Said restitution shall be made before a Notary Public chosen by the financial lessor, and the corresponding Restitution Act (delivery and receipt) must be signed for that purpose.

c) Without prejudice to the foregoing, the financial lessee must pay the outstanding balance up to the moment of the restitution of the goods indicated in the preceding paragraph, interest, penalty interest and financial expenses agreed, accrued up to the date of effective payment.

d) The installments, interest and financial expenses that have been paid by the financial lessee up to the moment of the contractual termination due to breach, shall be consolidated in favor of the financial lessor, since the termination does not reach these performances, as the financial lease contract is of successive and periodic execution.

II. In the event that the financial lessee does not comply with the obligations established in Paragraphs b and c, the compliance thereof may be judicially demanded in the executive proceeding by the financial lessor, under the provisions of the following articles.

Article 141. (RECOVERY OF REAL PROPERTY). In the event that the good subject to the financial lease contract is a real property, the breach of the financial lessee's obligations enforceable by effect of the termination stipulated in the

preceding Article, shall have the following effects:

a) Default shall be constituted automatically, without the need for any prior extrajudicial or judicial declaration, and in the event that the goods have not been returned in accordance with Paragraph b of the preceding Article, the financial lessor may judicially demand in the executive proceeding the restitution of the goods granted under financial lease, with the sole presentation of the financial lease contract duly registered and the notarized notice by which it communicated to the financial lessee the termination of the contract due to the breach of its obligations, in accordance with the provisions of the preceding Article. Within forty-eight (48) hours following the presentation of the restitution demand, the judge must transfer it to the financial lessee, who shall have five (5) days to prove by documentary evidence the compliance of the obligation claimed.

b) In the event that this period elapses without the financial lessee presenting the pertinent documents that, in the judge's opinion, prove that payment has been made, the judge must order the restitution of the property without further procedure and its physical delivery to the financial lessor, ordering for this purpose the dispossession of the asset that is the object of the financial leasing contract and establishing in said act the breaking open of the domicile, the opening of locks and all similar acts involving the use of public force and police assistance, with the authorization of days and hours that may be non-working, always within the limits of constitutional provisions, the execution of which must be entrusted to the Police and/or any authority not impeded by Law of the place where the asset is located. Any appeal or subsequent remedy that the financial lessee may file shall be with devolutive effect.

c) The eviction process applicable to cases of civil leasing or simple tenancy established by the Code of Civil Procedure is not applicable in cases of financial leasing of real property.

d) This process for the restitution of real property granted under financial leasing does not conflict with and is without prejudice to any other enforcement proceeding that the financial lessor may initiate in order to demand payment of any amount under the financial leasing contract.

Article 142. (RECOVERY OF MOVABLE ASSETS).

I. In the event that the object of the financial leasing contract is movable property, the breach of the financial lessee's obligations enforceable as a result of the termination stipulated in Article 140 of this Law shall have the following effects:

a) Default shall be constituted automatically, without the need for any prior extrajudicial or judicial declaration, and in the event that they have not been returned in accordance with Subsection b of Article 140 of this Law, the financial lessor may judicially demand, through the executive proceeding, the immediate restitution of the assets granted under financial leasing, and the payment of the credit default, composed of the outstanding balance up to the moment of the restitution of the assets, interest, penalty interest and agreed financial expenses, accrued up to the date of effective payment, plus costs, with only the presentation of the duly registered financial leasing contract and the note of termination of the contract duly notarized.

b) Within forty-eight (48) hours following the filing of the restitution demand, the judge must order the restitution of the assets without further procedure and their physical delivery to the financial lessor, ordering for this purpose their seizure. Any appeal or subsequent remedy that the financial lessee may file shall be with devolutive effect.

c) Likewise, in the same judicial resolution, the competent judge shall order the seizure of the movable assets that are the object of the financial leasing, contemplating from its issuance the breaking open of domiciles, the opening of locks and all similar acts involving the use of public force and police assistance, with the authorization of days and hours that may be non-working, always within the limits of constitutional provisions, the execution of which must be entrusted to the police and/or any authority not impeded by Law of the place where the assets are located.

d) Once the order of the competent judge is issued, the financial lessor shall go with it to the police and/or any authority not impeded by Law of the place, and they must execute the seizure order within six (6) hours of receiving it.

e) The assets recovered under the procedure detailed in the preceding subsections must be delivered to the financial lessor within forty-eight (48) hours following their recovery.

II. The judicial collection of the credit default shall continue its course in accordance with the Code of Civil Procedure.

Article 143. (COLLECTION OF AMOUNTS IN DEFAULT). Once the dispossession or seizure of the assets given under financial leasing has occurred, the financial lessor may claim through the executive proceeding the payment of the outstanding balance up to the moment of the restitution of the assets, interest, penalty interest and agreed financial expenses accrued up to the date of effective payment, plus costs; for this purpose, the financial leasing contract constitutes sufficient executive title with force of execution, in accordance with the provisions of Article 487 of the Code of Civil Procedure.

Article 144. (COLLECTION OF DAMAGES AND LOSSES). The financial lessor may claim through the pertinent proceeding the damages and losses resulting from the abnormal deterioration of the asset as a consequence of fraud, fault or negligence of the financial lessee, and other losses that may arise.

Article 145. (PROHIBITIONS).

I. The assets that are the object of financial leasing may not be assigned as collateral nor subject to any precautionary measure during the term of the financial leasing contract.

II. Financial leasing companies and financial intermediation entities may not maintain inventories of assets that can be granted under financial leasing. Assets that, having been given under financial leasing, have been recovered by the financial lessor or received in recovery or awarded and are in its possession shall not be considered inventories.

Article 146. (PROVISIONS). The Financial System Supervision Authority - ASFI must establish a lower regime of provisions and capital requirements that recognize the risk inherent in the financial leasing operation.

Article 147. (REGULATION).

I. Aspects not contemplated in this Chapter shall be regulated by the Executive Branch through Supreme Decree.

II. The regulations of the Financial System Supervision Authority - ASFI may establish provisions to adapt the requirements and conditions for the operation of financial leasing carried out by financial entities and that are not established in this Law.

Article 148. (TAX REGIME OF FINANCIAL LEASING). Financial leasing shall have the following tax treatment:

a) Value Added Tax. Interest generated by financial leasing operations of movable goods carried out by financial leasing companies and financial intermediation entities are not considered within the object of the Value Added Tax.

For the application of the provisions of this Article, the contract or other financial leasing document must specify the composition of the installments, differentiating the portion corresponding to interest and any other component contained therein.

Financial leasing operations of used capital goods for small productive ventures shall be exempt from the Value Added Tax in accordance with regulations to be issued.

Financial leasing operations of real estate are not subject to the Value Added Tax.

b) Corporate Income Tax. The financial lessor shall record as income the portion of the financial leasing installment corresponding to the interest generated by the operation, for purposes of the Corporate Income Tax; consequently, the goods subject to financial leasing are not depreciable for either contracting party.

The financial lessee may deduct as an expense the total value of the installments paid during the term of the financial leasing contract, as well as the expenses required for the maintenance, repair, and insurance of

the goods subject to financial leasing, for purposes of determining the Corporate Income Tax.

c) Tax on Transactions in Financial Leaseback. In all cases in which a productive financial leaseback operation is carried out, the first transfer shall be exempt from the Tax on Transactions.

CHAPTER III AUTHORIZATION REGIME

Article 149. (SCOPE OF APPLICATION). The provisions contained in this

chapter are of general application to all financial entities in formation that process an operating license before the Financial System Supervision Authority - ASFI.

Article 150. (OPERATING LICENSE).

I. The operating license for the provision of financial intermediation services and complementary financial services shall be granted by the Financial System Supervision Authority - ASFI. The license shall establish, among other data, the corporate name of the holder, the type of financial entity and the corresponding operating restrictions.

II. In the processes of granting an operating license to operate as a financial entity, the Financial System Supervision Authority - ASFI must evaluate how the entity in formation will comply with the objectives of Article 4 of this Law, and will effectively contribute to the economic and social development of the country.

Article 151. (TYPES OF FINANCIAL ENTITIES).

I. For purposes of this Law, the types of financial entities are the following:

a) State financial entities or those with majority State participation:

1. Productive Development Bank.

2. Public Bank.

3. Public Development Financial Entity.

b) Private financial intermediation entities:

1. Private Development Bank.

2. Multiple Bank.

3. SME Bank.

4. Savings and Credit Cooperative.

5. Housing Financial Entity.

6. Development Financial Institution.

7. Communal Financial Entity.

c) Complementary financial services companies:

1. Financial leasing companies.

2. Factoring companies.

3. General deposit warehouses.

4. Clearing and settlement houses.

5. Information bureaus.

6. Companies transporting monetary material and securities.

7. Electronic card administering companies.

8. Exchange Houses.

9. Mobile payment service companies.

II. No other company may use these denominations. Financial entities other than the types mentioned may not be constituted, except for other complementary financial services companies that the Financial System Supervision Authority - ASFI incorporates under Paragraph III of Article 19 of this Law.

III. The word "bank" in the Spanish language as the first word of the name or corporate name of a financial entity is permitted only for development banks, the public bank, multiple banks and SME banks. No other financial entity may use said denomination.

IV. Financial entities may share premises for the provision of their services, including through teller and space leasing contracts. These contracts shall be brought to the attention of the Financial System Supervision Authority - ASFI to safeguard control and security requirements.

Article 152. (FOUNDING SHAREHOLDERS, PARTNERS OR ASSOCIATES). Natural and legal persons of proven solvency and suitability, who demonstrate the legitimacy of the resources that constitute contributions to the entity's share capital, may be founding shareholders, partners or associates of a financial entity.

Article 153. (PERSONS DISQUALIFIED FROM BEING FOUNDERS). The following may not serve as founders of a financial entity:

a) Those disqualified, by operation of law, from engaging in commerce.

b) Those who have an order of indictment or a conviction for the commission of common crimes.

c) Debtors in default to the financial system who have loans in foreclosure or written-off loans.

d) Those who have been declared, in accordance with legal procedures, guilty of economic crimes in public functions, against the financial order or in the administration of financial entities.

e) Those responsible for bankruptcies or reorganization proceedings, through fault or fraud, in companies in general and entities of the financial system.

f) Those who have been disqualified from holding current accounts.

g) The national representatives of the four (4) Branches of the Plurinational State, the assembly members of autonomous departmental governments and autonomous municipal governments, and the representatives and authorities of indigenous native peasant autonomies.

h) Public servants in general, with the Financial System Supervision Authority - ASFI being able to establish exceptions by regulation for compliance with this Law.

i) The directors or administrators of financial entities, and any other officer in the exercise of their duties at these entities.

Article 154. (APPLICATION FOR INCORPORATION PERMIT).

I. The Financial System Supervision Authority - ASFI shall regulate the procedure and the general requirements that natural and legal persons must comply with in order to incorporate a financial entity. Said regulation must expressly set forth all aspects that must be complied with in order to incorporate a financial entity.

II. In order to evaluate and qualify the application for an incorporation permit for a financial entity, the Financial System Supervision Authority - ASFI must base its evaluation on the aspects expressly set forth in this Law and in the other complementary provisions issued for that purpose.

Article 155. (MINIMUM PAID-IN CAPITAL).

I. The minimum paid-in capital amounts are set in national currency in an amount equivalent to Housing Development Units - UFV, by type of financial entity.

II. The Executive Branch, by Supreme Decree, may increase but not decrease the minimum capital amounts defined in this Law for each type of entity, based on the prevailing conditions in the financial system, the macroeconomic situation and the external situation.

III. At no time shall the paid-in capital of a financial entity be less than the minimum capital established by this Law.

Article 156. (SUBSCRIBED CAPITAL, PAID-IN CAPITAL AND CAPITAL CONTRIBUTIONS).

I. All capital of financial entities that exceeds the minimum established by Law may be subscribed and must be paid within a maximum period of one (1) year.

II. The subscribed capital of complementary financial services companies must mandatorily be paid at the time of subscription.

III. Capital contributions in a financial entity incorporated as a corporation may only be made in cash.

Article 157. (CAPITAL INCREASE AND REDUCTION).

I. The capital increase of a financial entity, through contributions by new or existing shareholders or the capitalization of profits and equity reserves, must be reported to the Financial System Supervision Authority - ASFI.

II. In the case of capital increases with contributions from new or existing shareholders, sworn statements from the contributors must be attached, stating that they are not within the incompatibilities established in Article 153 and Article 442 of this Law, identifying the origin of the funds and with individual authorization to be evaluated at any time and before any public or private authority or institution, national or foreign.

III. To reduce the capital of a financial entity, authorization from the Financial System Supervision Authority - ASFI shall be required.

Article 158. (TRANSFER OF SHARES).

I. Every transfer of shares of a financial entity incorporated as a corporation must be communicated to the Financial System Supervision Authority - ASFI for annotation in the respective registry. If through said transfer, a shareholder comes to hold, directly or indirectly, five percent (5%) or more of the capital of the financial entity, the communication must additionally be accompanied by the documentation required in accordance with the regulations of the Financial System Supervision Authority - ASFI.

II. The Financial System Supervision Authority - ASFI may request the information it considers necessary to analyze the situation of shareholders who have a participation of less than five percent (5%) of the capital of the financial entity.

III. Founding shareholders shall require authorization from the Financial System Supervision Authority - ASFI to transfer their shares, directly or through the Stock Exchange, until three (3) years after the operating license has been granted to the financial entity.

IV. The Financial System Supervision Authority - ASFI is empowered to reject proposed share transfers, for reasons of transparency of the ownership structure and of the activities of the financial entity, in order to avoid the formation of monopolies or oligopolies prohibited by Article 109 of this Law or within the framework of the control of the proportional participation of entities established in Article 110 of this Law.

V. Any transfer of shares that involves an infringement of the provisions established in this Law is ineffective, in accordance with Article 821 of the Commercial Code.

Article 159. (SWORN STATEMENT OF ASSETS). Regardless of the Sworn Declaration of origin of funds, the partner who comes to hold a direct or indirect shareholding greater than five percent (5%) of the capital of a financial entity, with the purchase of the shares, must submit a Sworn Statement of Assets, in accordance with regulations issued by the Financial System Supervision Authority - ASFI.

Article 160. (FOREIGN INVESTMENT).

I. Bolivian investment in financial activities shall be prioritized over foreign investment.

II. All foreign investment in financial activities shall be subject to Bolivian jurisdiction, laws and authorities, and no one may invoke a situation of exception, nor appeal to diplomatic claims to obtain more favorable treatment.

III. The Financial System Supervision Authority - ASFI, at the time of evaluating the authorization for the opening of a branch of a foreign financial entity in Bolivian

territory, shall consider the potential contribution of this entity to the development of commercial and financial relations with the country of establishment of the foreign financial entity.

Article 161. (REPRESENTATIVE OFFICES). Representative offices of foreign financial entities, with prior authorization from the Financial System Supervision Authority - ASFI, may only carry out in the country activities for the promotion of financial services and business. These offices are prohibited from carrying out financial intermediation activities.

Article 162. (LEGAL REPRESENTATIVE). Every branch, agency or representative office of foreign financial entities operating in Bolivia shall have a legal representative with sufficient power.

TITLE III OF STATE FINANCIAL ENTITIES AND FINANCIAL ENTITIES WITH MAJORITY STATE PARTICIPATION

CHAPTER I GENERAL PROVISIONS

Article 163. (CREATION). The creation of State financial entities and financial entities with majority State participation shall be carried out by Law of the Plurinational State of Bolivia or by agreements or documents as appropriate. They shall have management, budgetary and administrative autonomy and shall be governed by the provisions of their internal statutes, their organic laws and this Law. They shall coordinate their action in accordance with what their constitutive legal provisions establish.

Article 164. (STATE CAPITAL CONTRIBUTIONS). The Executive Branch shall be authorized to make capital contributions and purchases of shareholdings by Supreme Decree.

Article 165. (CAPITAL). State financial entities and those with majority State participation must maintain at all times a minimum paid-in capital in national currency for an amount equivalent to Housing Development Units, according to the following detail:

a) For Banco de Desarrollo Productivo S.A.M., the minimum paid-in capital corresponding to the Public Bank shall be maintained.

b) For the Public Bank, UFV30,000,000.- (Thirty Million Housing Development Units).

c) For Public Development Financial Entities, UFV18,000,000.- (Eighteen Million Housing Development Units).

Article 166. (DISTRIBUTION OF DIVIDENDS). The shareholders' meeting of public financial entities or those with majority State participation may determine the distribution of dividends from the net profits generated in an annual management period, and undistributed profits must be integrated into the entity's equity.

Article 167. (ADMINISTRATION).

I. Public financial entities or those with majority State participation shall be administered by a board of directors designated in accordance with the provisions of their Organic Law.

II. The requirements and impediments to be directors shall be subject to the provisions

contained in Title VI, Chapter I of this Law.

III. The fulfillment of the duties of the board of directors shall be governed by the provisions of this Law, its Organic Law and the Commercial Code insofar as applicable.

Article 168. (STRATEGIC PLANNING). The strategic plans prepared by public financial entities or those with majority State participation, within the framework of the provisions of Article 114 of this Law, shall be sent by the president of the entity's board of directors to the Minister of Economy and Public Finance and to the departmental governors and/or municipal mayors as appropriate within the following ten (10) days of their approval.

Article 169. (OPENING OF OFFICES).

I. Public financial entities or those with majority State participation may establish and maintain branches, agencies and other financial service points anywhere in the national territory. Additionally, the Public Bank may do so abroad.

II. The opening and closing of offices must be carried out within the framework of the provisions set forth in this Law and its regulatory norms for financial intermediation entities. In the case of opening offices abroad, the Public Bank must also comply with the legal provisions and regulatory norms of the country in which it installs said offices.

Article 170. (MERGERS AND ACQUISITIONS).

I. Public financial entities or those with majority State participation may acquire total ownership of another private financial intermediation entity or one owned by the State or with majority State participation for its merger or acquisition.

II. The determination shall be assumed by the Executive Branch by Supreme Decree, by the departmental, municipal or indigenous original peasant autonomous government, as appropriate, in accordance with the provisions established in this Law and the Commercial Code insofar as applicable.

III. The Financial System Supervision Authority - ASFI shall authorize the operation in accordance with the regulations issued for that purpose.

Article 171. (CORRESPONDENT BANKING REGIME). The Public Bank and the Public Development Bank shall establish a correspondent banking regime for the delegation of certain services under their competence to authorized financial intermediation entities, in order to expand geographic coverage and rural population access to their financial services.

They may also maintain correspondent offices outside the country, for purposes of fulfilling their objective.

Article 172. (REPRESENTATION OF THE STATE AT THE GENERAL SHAREHOLDERS' MEETING).

I. The representation of the Plurinational State at the shareholders' meeting of a public financial entity or one with majority State participation shall be the responsibility of the Minister of Economy and Public Finance in his capacity as legal representative of the General Treasury of the State or of the Deputy Minister dependent on his office whom this authority delegates in the manner provided by its Organic Law.

II. In the case of public development financial entities, the representation of the Plurinational State at the shareholders' meeting may also correspond to the departmental governors for the shares of the departmental autonomous governments, to the municipal mayors for the shares of the municipal autonomous governments and to the highest authorities for the shares of the indigenous native peasant autonomous governments, or to the representatives that each of these authorities delegates in the manner provided by its Organic Law.

Article 173. (PRESENTATION OF INFORMATION TO MINISTERIAL PORTFOLIOS).

I. The board of directors of the Public Development Bank shall present semi-annually to the Ministry of Economy and Public Finance, to the Ministry of Development Planning and to its shareholders, periodic information on the results and impact of direct and indirect financing of the Public Development Bank to the different sectors of the national economy. At the close of each annual fiscal year the president of the board of directors shall present to these ministerial portfolios an activities report, audited financial statements, annual report and social responsibility balance sheet, within the ten (10) business days following their presentation before the Financial System Supervision Authority - ASFI.

II. In the case of public development financial entities, the information indicated in the preceding paragraph referring to the departmental, municipal and indigenous native peasant scope shall be presented to the departmental, municipal and/or indigenous native peasant autonomous governments, as applicable.

Article 174. (OTHER PUBLIC FINANCIAL ENTITIES). By Law other public financial entities or entities with majority State participation may be created, within the framework of this Law.

CHAPTER II PUBLIC BANK

Article 175. (PUBLIC BANK). The Public Bank is governed by its own Law in relation to its creation, activities, operation and organization. It shall be subject to this Law in relation to the application of solvency and financial prudence rules and to the control and supervision of the Financial System Supervision Authority - ASFI within the legal framework that regulates this institution in all matters applicable according to its legal nature.

CHAPTER III PRODUCTIVE DEVELOPMENT BANK

SECTION I GENERAL PROVISIONS

Article 176. (LEGAL NATURE AND SHAREHOLDING PARTICIPATION).

I. The Productive Development Bank - Mixed Public Limited Company, whose acronym is BDP - S.A.M., is a legal person under private law with public purposes constituted under the typology of a mixed economy company and which shall carry out first and second tier activities of promotion and fostering of the development of the productive sector.

II. The Productive Development Bank - Mixed Public Limited Company (BDP - S.A.M.) must at all times have a majority shareholding participation of the Plurinational State of Bolivia in its paid-in capital.

Article 177. (REGULATORY FRAMEWORK). The Productive Development Bank - Mixed Public Limited Company (BDP - S.A.M.) shall subject its functions, activities and operations in a

special manner to the provisions of this Law and its Social statutes and to what is established for mixed economy companies and public limited companies in the Commercial Code. The general or special provisions relating to the public sector shall not apply to it, except those that establish express provisions for the Productive Development Bank - Mixed Public Limited Company (BDP - S.A.M.)

Article 178. (PURPOSE AND STRATEGIC ROLE).

I. The Productive Development Bank - Mixed Public Limited Company (BDP - S.A.M.) has as its main purpose to promote the development of the agricultural, livestock, manufacturing, fishing and timber and non-timber forestry sector, and may extend to other productive sectors and the commerce and services sectors complementary to the productive activity of Bolivia, providing financial and non-financial services directly or through third parties.

II. The Productive Development Bank - Mixed Public Limited Company (BDP - S.A.M.) has as its strategic role:

a) Strengthen the presence of the Plurinational State of Bolivia in the financing and promotion of the development of the country's productive sector.

b) Finance the execution of the productive and strategic priorities established in the state programs and policies aimed at fostering the development of the productive sector.

c) Participate actively in the National Financial System, influencing the improvement of financial conditions for the actors of the productive sector.

d) Promote access to financial and non-financial services by the actors of the productive sector.

SECTION II FUNCTIONS, OPERATIONS AND FUNDING

Article 179. (FUNCTIONS). The Productive Development Bank - Mixed Public Limited Company (BDP - S.A.M.) has the following functions within the framework of its first and second tier activities:

a) Provide financial and non-financial services to the different actors of the plural economy, either directly or through third parties.

b) Finance directly or through other regulated financial entities or entities in the process of regulation, under principles of equity, inclusion and social, economic and environmental sustainability, those who have not had access to financing under development conditions, especially the forms of community, social cooperative and indigenous native and peasant economic organization, whether micro, small and medium-sized productive units in rural, urban and peri-urban areas of the country.

c) Be an instrument of the Plurinational State of Bolivia in the granting of financing for productive ventures in their start-up, growth and consolidation stages, channeling its own resources, the resources provided by the General Treasury of the State - TGE and those obtained directly by the State from international financial cooperation entities or from public, private or mixed entities, whether national or foreign, ensuring that the modalities and financial conditions

are the most convenient.

d) Design, develop, introduce and implement, by itself or through third parties, financial and credit risk coverage products aimed at promoting and facilitating the financing of the productive sector.

e) Channel resources towards the Bolivian Financial System, offering financing alternatives for the micro, small and medium-sized individual or associative productive unit and for the commerce and services sectors complementary to the country's productive activity.

f) Improve the performance of productive units by strengthening the skills of producers, accompanying financing with the direct granting or through third parties of non-financial services, technical assistance and others that are necessary and complementary to strengthen the start-up or consolidation of productive ventures.

g) Expand the intermediation and channeling of resources towards entities, associations or foundations of a financial nature, under private or public law, which must be legally established and authorized to operate in the country.

h) Participate in companies or autonomous patrimonies or generate financing lines for venture capital.

Article 180. (OPERATIONS). The Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.), as a banking entity that carries out first and second tier activities, may also carry out, in addition to the active operations established for banking financial entities, the financial and non-financial operations indicated below:

a) Obtain financial resources through loans, lines of credit, bonds, promissory notes, subordinated obligations, trust certificates, guarantees or sureties, subsidies or donations under any modality or form of contract, whether from the Plurinational State of Bolivia, the General Treasury of the State - TGE, international financial organizations and international cooperation organizations, whether public, private or mixed, from other States, from national or foreign natural persons and/or from any other type of public, private or mixed legal person, national or foreign.

b) Intermediate and channel own or third-party financial resources, directly or through other financial entities regulated or in the process of regulation by the Financial System Supervision Authority - ASFI.

c) Carry out trust businesses and operations, whether as trustor, trustee or beneficiary.

d) Channel and invest financial resources directly or indirectly for the implementation of general insurance, microinsurance, credit insurance and others for the coverage of contingencies related to the granting of credits aimed at the productive sector.

e) Channel and invest financial resources directly or indirectly for the implementation of guarantee systems, guarantee mechanisms, guarantee funds, endorsement and payment assurance mechanisms and others

related to the securing of credits.

f) Channel and invest financial resources directly or indirectly for the implementation of programs and funds that allow granting non-reimbursable monetary resources to the productive sector and to the commerce and services sectors complementary to the productive activity as “venture capital”, “start-up capital”, “seed capital” and/or “initial capital”.

g) Purchase portfolios from financial intermediation entities and complementary financial services entities with or without additional guarantee from the seller, being able to grant it in administration, assign it, sell it or securitize it, in accordance with current regulations.

h) Carry out syndicated credit operations without this entailing joint and several co-responsibility among the syndicated parties.

i) Carry out trust commissions with any natural or legal person, public, private or mixed, national or foreign.

j) Carry out securitization operations acting as originator, in accordance with the Securities Market Law and its regulations.

k) As long as they do not participate in the share capital of the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.), the latter may invest and withdraw its investments in the share capital of the following types of legal persons, subject to prior authorization from the Shareholders' Meeting of the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.):

1. Financial intermediation entities regulated or in the process of regulation and complementary financial services companies.

2. Commercial companies whose corporate purpose is the provision of non-financial services.

l) Finance directly or indirectly foreign trade operations.

m) Grant bank guarantees and sureties.

n) Carry out discount, rediscount and repurchase operations on its own account or on behalf of third parties in accordance with current regulations.

o) Maintain accounts in national and foreign banks and financial institutions.

p) Issue, buy, sell, assign, pledge, transfer on its own account under any title, all types of securities or negotiable instruments observing the legal regulations in force.

q) Provide, directly or indirectly, non-financial services such as the implementation of financial education modules, technical assistance, technology transfer, business development and any other type of non-financial services aimed at the productive sector and the commerce and services sectors complementary to production.

Article 181. (FUNDING). In order to comply with the purpose, strategic role and functions of the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.), it

may resort, by way of example and not limitation, to the following funding sources:

a) Resources contributed or reinvested in the share capital of the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) by its shareholders and those obtained by the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) under any title, whether from the Plurinational State of Bolivia through the General Treasury of the State - TGE and from other sources incorporated in the budget of the Plurinational State of Bolivia corresponding to each fiscal year.

b) Resources granted as investment and/or loan from internal savings collected by the Pension Fund Administrators

• AFP, Long-Term Social Security Managers - GSS or their equivalents, on a temporary and non-definitive basis.

c) Resources granted as a donation or under any title by international financial organizations and international cooperation, by other States, by natural persons national or foreign and/or any other type of public, private or mixed legal entity national or foreign.

d) Resources from the issuance and placement by the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) of any

security of credit content or shareholding, recognized and authorized by the legislation in force.

e) Dividends from the annual profits of the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) shall be reinvested by its shareholders mandatorily at eighty percent (80%) and shall not be subject to distribution beyond said percentage.

f) Money deposits received in savings accounts, current accounts, demand and time deposits.

Article 182. (COORDINATION AND ARTICULATION). In order to guide and channel optimally and timely the resources and efforts for the granting, directly or indirectly, of financial and non-financial services to the different actors of the productive sector and the commerce and services sectors complementary to production in the country, the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) shall coordinate and articulate the management, promotion, coordination and placement of financing for productive development throughout the national territory, being able to interact with other entities, institutions, departments and instances both from the public and private sectors in the country, in order to achieve greater social impacts and better economic results.

SECTION III SUPERVISION AND INFORMATION REGIME FOR GOVERNMENT CONTROL

Article 183. (REGULATION AND SUPERVISION). The supervision of the activities and operations carried out by the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) shall be carried out solely by the Financial System Supervision Authority - ASFI.

Article 184. (INFORMATION FOR GOVERNMENT CONTROL). The Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.), for purposes of government control, must send information to the Ministry of Economy and Public Finance and to the Ministry of Development Planning on the destination, form and results of the management of the

resources contributed by the Plurinational State of Bolivia to the company, presenting the annual report of activities, the financial statements and balance of results duly audited by an external audit firm authorized and registered in the registry of the Financial System Supervision Authority - ASFI.

Article 185. (PROHIBITIONS). The Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) may not carry out the following financial operations:

a) Grant credits, through the regulated and unregulated financial system, to directors, statutory auditors, managers, officers, employees or permanent advisors and consultants of the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.), with its own resources or with those from programs, mandates and trusts administered by the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.).

b) Acquire assets for use that are not used in activities proper to the line of business.

SECTION IV FINANCIAL REGIME AND RISK MANAGEMENT

Article 186. (CAPITAL ADEQUACY RATIO). The level of Capital Adequacy Ratio that the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) must maintain shall be that determined by this Law and regulatory provisions.

Article 187. (EXPOSURE CRITERIA). The Productive Development Bank - Mixed-Share Company (BDP - S.A.M.), within the framework of its second-tier activities, may grant and maintain credits and investments in a financial institution up to two (2) times the net worth of the debtor entity or up to one (1) time the net worth of the Productive Development Bank - Mixed-Share Company (BDP - S.A.M.), whichever amount is lower, regardless of the modality of the risk asset.

The Productive Development Bank - Mixed-Share Company (BDP - S.A.M.), acting as a first-tier bank, may grant and maintain direct credits up to one (1) time the net worth of the debtor, or up to twenty percent (20%) of the net worth of the Productive Development Bank - Mixed-Share Company (BDP - S.A.M.), whichever amount is lower, regardless of the modality of the risk asset.

Article 188. (INVESTMENT IN FIXED ASSETS). The total amount of investments made by the BDP SAM in fixed assets, in branches, subsidiary companies and investments specified in this Law shall not exceed fifty percent (50%) of the net worth of the entity.

Article 189. (COMPREHENSIVE RISK MANAGEMENT POLICY). The Productive Development Bank - Mixed-Share Company (BDP - S.A.M.) shall implement a comprehensive risk management system that contemplates strategies, policies, procedures, organizational structure, control instances and responsibilities inherent to the management of credit, liquidity, operational, market and other risks inherent to its line of business.

Article 190. (ORGANIZATIONAL STRUCTURE). The Productive Development Bank - Mixed-Share Company (BDP - S.A.M.) shall establish an organizational structure that delineates the obligations, functions, principles and good practices of corporate governance and the responsibilities of all its management, administration and other bodies involved in the comprehensive management of risks.

Article 191. (CLASSIFICATION OF PORTFOLIO AND INVESTMENTS AND PROVISIONS). The Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) shall have a

methodology for the evaluation and classification of portfolio and investments and for the establishment of provisions, which shall be framed within principles and sound banking practices and shall observe the guidelines established by the Autoridad de Supervisión del Sistema Financiero - ASFI.

Article 192. (RESPONSIBILITIES). It is the responsibility of the Board of Directors and the General Management of the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) to implement and execute a comprehensive risk management system.

SECTION V REGIME AND CORPORATE GOVERNANCE OF THE BANCO DE DESARROLLO PRODUCTIVO - SOCIEDAD ANÓNIMA MIXTA (BDP - S.A.M.)

Article 193. (REPRESENTATION AT THE ORDINARY AND EXTRAORDINARY GENERAL SHAREHOLDERS' MEETINGS). Representation of the Plurinational State of Bolivia at the ordinary and extraordinary general shareholders' meetings of the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) shall correspond to the Minister of Economy and Public Finance or to whomever he delegates, in his capacity as legal representative of the Tesoro General del Estado - TGE.

Article 194. (STATE PARTICIPATION IN THE COMPANY). The Executive Body of the central level of the Plurinational State of Bolivia, representing the shares of the public sector, is empowered to authorize the issuance of new shares and the increase of the authorized capital and of the State's participation in said capital.

Article 195. (CORPORATE GOVERNANCE). The relations between the shareholders, the Directors, the executives, officials and stakeholders related to the purpose, strategic role, functions and operations of the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) shall be governed in accordance with the corporate guidelines established by the Autoridad de Supervisión del Sistema Financiero - ASFI.

SECTION VI INTERNAL ADMINISTRATIVE REGIME OF THE BANCO DE DESARROLLO PRODUCTIVO - SOCIEDAD ANÓNIMA MIXTA (BDP - S.A.M.)

Article 196. (GENERAL SHAREHOLDERS' MEETINGS). The composition, functions, powers and duties of the general shareholders' meetings of the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) shall be governed by the provisions of the Commercial Code, this Law, the Bylaws of the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) and other internal administrative rules of the company.

Article 197. (ADMINISTRATION OF THE BANCO DE DESARROLLO PRODUCTIVO - SOCIEDAD ANÓNIMA MIXTA (BDP - S.A.M.) AND APPOINTMENT OF DIRECTORS).

I. The administration of the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) shall be subject to the provisions of the Commercial Code and this Law, the bylaws and other internal administrative rules of the company.

II. The administration of the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) shall be in charge of a board of directors composed of up to five (5) full directors and up to three (3) alternate directors appointed by an Ordinary General Shareholders' Meeting.

Article 198. (APPOINTMENT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS). The appointment of the Chairman of the Board of Directors of the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) shall be made in observance of the provisions of Article 159, Number 12 of the Political Constitution of the Plurinational State of Bolivia.

Article 199. (ADMINISTRATIVE AND INTERNAL OPERATING REGIME). The administration and internal operation of the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) shall be governed by the provisions of the Commercial Code, the provisions of this Law, the bylaws and other internal administrative rules of the company regulating its administration and operation systems.

Article 200. (PERSONNEL REGIME). The personnel of the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) is subject to the Ley General del Trabajo, its Reglamentary Decree and other complementary and related regulations.

Article 201. (INTERNAL AUDITING AND CONTROL).

I. The internal and permanent auditing of the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) shall be the responsibility of one or more titular and alternate examiners, appointed by an Ordinary General Meeting of Shareholders convened for this purpose. The titular and alternate examiners may be re-elected and their appointment revoked by an Ordinary General Meeting of Shareholders.

II. The internal control of the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) shall be carried out by an internal audit unit whose activities shall be governed by the Código de Comercio, this Law, the Bylaws of the Banco de Desarrollo Productivo - Sociedad Anónima Mixta (BDP - S.A.M.) and other regulatory provisions issued by the Autoridad de Supervisión del Sistema Financiero - ASFI.

CHAPTER IV PUBLIC DEVELOPMENT FINANCIAL ENTITIES

Article 202. (CREATION). Public development financial entities shall be created by legal provisions or by agreements or documents, as appropriate according to the participation in their equity structure of the central government, autonomous departmental governments, autonomous municipal governments and/or indigenous originary peasant peoples, with autonomy of budgetary and administrative management. They shall be governed by the provisions of their internal bylaws, their Organic laws and this Law. They shall coordinate their actions with the national productive development policies established by the Executive Branch of the Plurinational State.

Article 203. (CAPITAL). Public Development Financial Entities shall be constituted with fully public capital or with majority participation thereof, whether it comes from the government of the central level of the State, autonomous departmental governments, autonomous municipal governments and/or indigenous originary peasant peoples, and their deeds of incorporation and bylaws must conform to their organic laws, the provisions of this Law and the Código de Comercio insofar as applicable to what is provided for corporations and/or mixed-economy companies.

Article 204. (OBJECTIVE). Public development financial entities shall have as their main objective to promote, through financial and technical support, the development of the productive sectors of the economy of the departments, regions and municipalities of the country.

Article 205. (SHAREHOLDING COMPOSITION).

I. The shareholding composition of the capital of a public development financial entity shall be made up of at least three (3) shareholder entities, which may be from the government of the central level of the State, autonomous departmental governments, autonomous municipal governments and/or indigenous originary peasant peoples, with a participation that shall be defined in its Organic Law.

II. Other public or private legal persons, national or foreign, with objectives consistent with that of the public development financial entity may participate in the share capital of a public development financial entity.

Article 206. (TRANSFER OF SHARES).

I. The Executive Branch of the Plurinational State and of the autonomous departmental and municipal governments, as appropriate, may transfer their shares of a public development financial entity and authorize the issuance of new shares or the increase or reduction of authorized capital, maintaining the minimum percentage of State participation through the central government and the autonomous departmental and/or municipal and/or indigenous originary peasant governments, as provided by its Organic Law, within the framework of the provisions established by the Código de Comercio and this Law.

II. The Plurinational State, through the central government and the autonomous departmental, municipal and/or indigenous originary peasant governments, as appropriate, shall have a preferential right to purchase the shares of a public development financial entity that are owned by private holders, based on the objectives of development policies and the budgetary availabilities recorded in their fiscal budgets.

Article 207. (ELIGIBLE INSTITUTIONS).

I. Public development financial entities shall carry out financial operations through eligible institutions, which may be financial intermediation entities.

II. All eligible institutions must comply with the policies and procedures that the public development financial entities determine for the provision of financial services, as well as with their risk rating and management policies.

Article 208. (OPERATIONS).

I. Public development financial entities may carry out the passive, active, contingent and service operations that are included in Title I,

Chapter II of this Law, except those indicated in the limitations and prohibitions of Article 209 below. The regulations issued in this regard by the Autoridad de Supervisión del Sistema Financiero – ASFI shall define the scope of second-tier activities and other aspects to which the public development financial entities must adhere.

II. Without prejudice to the foregoing, these entities may in particular:

a) Grant financing and carry out financial operations with eligible institutions, to channel resources to their departments, regions and/or municipalities.

b) Grant credits and carry out financial operations with eligible institutions whose final destination is to finance the import of inputs, raw materials, machinery and other elements necessary for productive activity, as well as to cover financing needs for the marketing and export stages of goods and services of Bolivian origin.

c) Guarantee obligations contracted by eligible institutions with other financial entities, provided that the resources of the financing received are destined to objectives analogous to that of the Communal Financial Entity.

d) Create and implement financial products to support the consolidation, growth and development of the activities of micro, small and medium-sized urban and rural enterprises, handicrafts, commerce, services, community organizations and production cooperatives of their departments, regions and/or municipalities.

e) Develop and implement financial products to support the economic and social development of their departments, regions and/or municipalities.

f) Develop training, advisory and technical and technological assistance programs for production, business, administrative and accounting management, aimed at increasing and improving competitiveness and productivity and access to financing for small-scale economic units.

g) Finance, carry out or contract technical, financial and legal studies for the sectoral analysis of productive activity, for pre-investment studies or for the structuring of investment projects.

h) Administer the resources of state or mixed funds for the purpose of promoting productive development activities from a second tier, in accordance with the provisions established in its Organic Law and this Law, and may carry out with charge to the same, the acts and contracts necessary for the achievement of its purposes.

i) Invest in securities subject to the Securities Market Law issued by financial entities, provided that the invested resources are destined to financing activities consistent with the objective of the public development financial entity.

j) Maintain deposits in the Public Bank and/or Central Bank of Bolivia - BCB, for purposes of optimal administration of its temporary liquidity.

k) Establish, administer and/or participate in financial structures, such as securitization, guarantee funds, venture capital, subordinated debt, syndicated loans, trusts and others that comply with the objective of the public development financial entity, for which it may contribute its own resources from its equity or from third parties.

l) Channel and invest funds for the purpose of establishing general insurance mechanisms, credit insurance, microinsurance, guarantee systems, endorsement and payment assurance mechanisms, warehouses for product deposit for guarantee purposes, and other instruments for covering contingencies and risks related to productive activity and to the credits granted to these activities.

m) Channel and invest resources for the implementation of financing programs for productive innovations or new ventures as venture capital, start-up capital, seed capital or initial capital of productive units of their departments, regions and/or municipalities.

n) Purchase portfolios from financial intermediation entities and transfer them for administration, or arrange their sale or securitization in accordance with what its bylaws and internal regulations determine.

o) Enter into cooperation agreements with national and international institutions or entities that comply with the objective of the public development financial entities.

III. This enumeration is not limiting or exclusive of other operations that the public development financial entities may carry out for the fulfillment of their objective, including financial operations not explicitly mentioned, which may be exercised with prior authorization from the Financial System Supervision Authority - ASFI, provided that they are related to their objective and fall within the provisions of their Organic Law and this Law.

Article 209. (LIMITATIONS AND PROHIBITIONS). The public development financial entities may not carry out the following operations:

a) Grant financing directly or indirectly for purposes that do not conform to their objective, in modalities that do not fall within the provisions of this Law or are executed without complying with the requirements established in their internal regulations or regulatory regulations.

b) Grant financing with their own resources or from the funds they administer, to government institutions whose budget is financed with resources from the General Treasury of the State - TGE, nor grant endorsements, bonds or guarantees for obligations contracted by these institutions.

c) Grant financing with their own resources or from the funds they administer to departmental autonomous governments or municipal autonomous governments, nor to institutions or companies under their dependency.

d) Capture demand deposits, in savings or time deposit accounts from the public.

e) Invest in shares of financial and non-financial companies whose objectives are not consistent with that of the public development financial entity.

f) Grant financing destined to consumer credits without productive purposes nor related to productive chains.

g) Others determined by its Organic Law.

Article 210. (FUNDING). To fulfill their objective, the public development financial entities may obtain additional resources with the following funding operations:

a) Loans, lines of credit and other financings managed before the General Treasury of the State - TGE, of departmental, municipal and/or indigenous originary peasant autonomous governments and other governmental entities, national and foreign financing organizations, international multilateral banks, international cooperation organizations and other second-tier sources.

b) Resources of autonomous patrimonies constituted with state, private or mixed funds, of national or external origin, for purposes of promotion and productive development.

c) Other financings contracted from private or public entities, national or foreign, that have objectives consistent with that of public development financial entities.

Article 211. (INDEBTEDNESS AND CONCENTRATION LIMITS). The provisions contained in

Article 456 and Article 460 of this Law are not applicable to Public Development Financial Entities. The Financial System Supervision Authority - ASFI shall establish the indebtedness and credit concentration limits and their operational application for the case of public development financial entities.

Article 212. (RELATIONSHIP WITH THE EXECUTIVE BRANCH). In the development of operations for the promotion of productive development of the departments, municipalities and indigenous originary peasant communities of the country, the relations of the public development financial entities with the Executive Branch of the Plurinational State and of the departmental, municipal and/or indigenous originary peasant autonomous governments, as applicable, shall be maintained only through the Ministry of Economy and Public Finance or the competent body in the departmental and/or municipal autonomous governments, except for operational aspects in which direct interaction with the corresponding public agencies may be possible.

Article 213. (GOVERNMENT CONTROL). The government control to which the public development financial entities are subject shall be that established in their Organic Law and statutes, which must be complementary and not concurrent with the supervision exercised by the Financial System Supervision Authority - ASFI.

Article 214. (REGULARIZATION AND INTERVENTION).

I. In the event that the Financial System Supervision Authority - ASFI, with a reasoned opinion, determines that a public development financial entity is incurred in the grounds for regularization provided in Article 511 of this Law, the Executive Branch of the Plurinational State or of the departmental and/or municipal autonomous governments, as applicable, shall establish a strengthening plan aimed at remedying the detected deficiencies.

II. If said plan does not succeed, the Financial System Supervision Authority - ASFI shall intervene the public development financial entity, for application of the solution or forced judicial liquidation procedure provided in Title IX of this Law. The regulations of the Financial System Supervision Authority - ASFI shall establish the operating procedures, in accordance with its nature as a public development financial entity.

TITLE IV OF PRIVATE FINANCIAL ENTITIES

CHAPTER I GENERAL PROVISIONS

Article 215. (FOUNDERS).

I. The founders of a private financial intermediation entity may not be fewer than five (5) natural and/or legal persons, individual or collective, who must not be among the disqualified persons mentioned in Article 153 of this Law.

II. In the case of corporate savings and credit cooperatives, the founders indicated in the preceding paragraph may not be fewer than ten (10) natural and legal persons without profit purposes; and not fewer than twenty (20) natural and legal persons without profit purposes in the case of open savings and credit cooperatives.

Article 216. (CONSTITUTION PERMIT AND OPERATING LICENSE).

The founders of a private financial intermediation entity must process the constitution permit and the operating license before the Financial System Supervision Authority - ASFI, subject to the authorization regime provided by Title II, Chapter III of this Law, insofar as applicable.

Article 217. (CAPITAL).

I. Private financial intermediation entities, except savings and credit cooperatives, according to their nature must maintain at all times a minimum paid-in capital in national currency equivalent to Housing Promotion Units, according to the following detail:

a) For the Private Development Bank, the equivalent of UFV30,000,000.00.- (Thirty Million Housing Promotion Units).

b) For a Multiple Bank, the equivalent of UFV30,000,000.00.- (Thirty Million Housing Promotion Units).

c) For a SME Bank, the equivalent of UFV18,000,000.- (Eighteen Million Housing Promotion Units).

d) For a Housing Financial Entity, the equivalent of UFV2,000,000.00.- (Two Million Housing Promotion Units).

e) For a Development Financial Institution, the equivalent of UFV1,500,000.00.- (One Million Five Hundred Thousand Housing Promotion Units).

f) For a Communal Financial Entity, the equivalent of UFV500,000.00.- (Five Hundred Thousand Housing Promotion Units).

II. The treatment of capital increases and reductions of the financial intermediation entities indicated in this article shall be governed by the provisions of Article 157 of this Law and the regulations issued by the Financial System Supervision Authority - ASFI for that purpose.

Article 218. (PRIMARY CAPITAL OF SAVINGS AND CREDIT COOPERATIVES).

I. The minimum primary capital of a savings and credit cooperative is set in national currency, at UFV600,000.00 (Six Hundred Thousand Housing Development Units) for open savings and credit cooperatives and UFV300,000.00 (Three Hundred Thousand Housing Development Units) for corporate savings and credit cooperatives. It shall be constituted by:

a) Contributions from cooperative members, represented by contribution certificates.

b) Reserve fund constituted by the surplus of perception shown in the financial statements.

c) Donations received for free disposal.

II. The members of a savings and credit cooperative must demonstrate commitment to the growth and capitalization of the entity through the continuous contribution of capital, which must be backed by a determined number of contribution certificates defined by the general assembly of members, an aspect that must be inserted in the entity's bylaws.

III. The Financial System Supervision Authority - ASFI shall issue regulations for the treatment of capital increases and reductions of savings and credit cooperatives, in accordance with the provisions established in Article 157 of this Law.

Article 219. (MODIFICATION OF MINIMUM CAPITAL). The amount of the minimum capital or primary capital, in duly justified cases, may be modified by the Executive Branch, by type of entity above the minimum levels established in this Law.

Article 220. (OPENING OF OFFICES).

I. Multiple banks may establish and maintain branches, agencies and other financial service points anywhere in the national territory, including maintaining branches or correspondent offices outside the country.

II. The Financial System Supervision Authority - ASFI shall regulate the opening of branches, agencies or other service points for financial intermediation entities, considering the type of entity and its characteristics.

Article 221. (MERGERS AND ACQUISITIONS).

I. A multiple bank or SME bank may acquire full ownership of another financial intermediation entity for its merger or acquisition, with prior authorization from the Financial System Supervision Authority - ASFI, in accordance with express regulations, this Law and the Commercial Code.

II. Other private financial intermediation entities may acquire full ownership of another financial intermediation entity with similar legal nature and corporate purpose for the aforementioned purposes.

III. In the case of entities constituted as communal financial entities, these operations must be framed within the limits of shareholder participation defined in

Article 299 of this Law.

Article 222. (FOREIGN CAPITAL). The Executive Branch of the central level of the State may regulate, by Supreme Decree, the participation of foreign capital in financial entities.

CHAPTER II OF PRIVATE FINANCIAL INTERMEDIATION ENTITIES

SECTION I PRIVATE DEVELOPMENT BANK

Article 223. (CONSTITUTION).

I. Private Development Banks shall be constituted under the legal form of a corporation, and their deed of incorporation and bylaws must conform to the provisions of this Law and the Commercial Code as applicable. The shares of private development banks shall be registered and ordinary.

II. The name or corporate name of these entities must necessarily contain as first words in Spanish "Banco de Desarrollo".

Article 224. (OBJECTIVE). The Private Development Bank shall have as its objective to promote, through financial and technical support, the development of the productive sectors of the national economy and of the commerce and services sectors, complementary to productive activity.

Article 225. (ELIGIBLE INSTITUTIONS AND SUBJECTS).

I. To achieve its objective, the Private Development Bank shall carry out financial operations through eligible institutions or directly with eligible subjects.

a) Eligible institutions are financial intermediation entities supervised by the Financial System Supervision Authority - ASFI in accordance with this Law.

b) Eligible subjects to carry out financial operations directly with the Private Development Bank are natural or legal persons that meet the requirements demanded by internal regulations and the regulations of the Financial System Supervision Authority - ASFI.

II. All eligible institutions and eligible subjects must comply with the policies and procedures that the Private Development Bank determines for the provision of financing services, as well as with its qualification and risk management policies to maintain financial solvency at all times and ensure the sustainability of the entity.

Article 226. (OPERATIONS).

I. The Private Development Bank is empowered to carry out passive, active, contingent and service operations that are included in Title II,

Chapter I of this Law, except those indicated in the limitations and prohibitions of Article 227 of this Law.

II. Without prejudice to this, it may in particular:

a) Grant financing and carry out financial operations with eligible institutions, in order to achieve adequate articulation with financial intermediation entities that grant financing to the various sectors of the economy within the framework of the objective of the Private Development Bank.

b) Grant credits and carry out financial operations directly with eligible subjects that demonstrate payment capacity, that carry out productive activities and other commercial and service activities that are complementary to production, to promote their economic and social development.

c) Grant credits and carry out financial operations with eligible institutions or eligible subjects, whose final purpose is to finance the importation of inputs, raw materials, machinery and other elements necessary for national productive activity, as well as to cover financing needs for the marketing and export stages of goods and services of Bolivian origin.

d) Guarantee obligations contracted by eligible institutions or eligible subjects with other financial entities, provided that the resources are allocated to the objectives of the Private Development Bank.

e) Create and implement financial products to support the consolidation, growth and development of the activities of micro, small and medium-sized enterprises, urban and rural, handicrafts, commerce, services, community organizations and production cooperatives.

f) Develop and implement financial products to support the reduction of inequalities in the level of economic and social development among departments, regions and municipalities of the country and between urban and rural areas.

g) Develop training, advisory and technical and technological assistance programs for production and marketing, business, administrative and accounting management, aimed at increasing and improving the competitiveness and productivity and access to financing of small-scale economic units, especially community forms of economic organization and associations and organizations of small urban and rural producers.

h) Finance, carry out or contract technical, financial and legal studies for the sectoral analysis of productive activity, for pre-investment studies or for the structuring of investment projects.

i) Invest in securities subject to the Securities Market Law issued by financial entities supervised by the Financial System Supervision Authority - ASFI, provided that the invested resources are allocated to financing activities consistent with the objective of the Private Development Bank.

j) Establish, administer and/or participate in financial structures, such as securitization, guarantee funds, venture capital, subordinated debt, syndicated loans, trusts and others that comply with the objective of the Private Development Bank, for which it may contribute its own resources from its equity or from third parties.

k) Channel and invest funds for the purpose of establishing general insurance mechanisms, credit insurance, microinsurance, guarantee systems, guarantee and payment assurance mechanisms, warehouses for product deposit for guarantee purposes, and other instruments for covering contingencies and risks related to productive activity and to the credits granted to these activities.

l) Channel and invest resources for the implementation of financing programs for productive innovations or new ventures as venture capital, start-up capital, seed capital or initial capital.

m) Purchase portfolios from financial intermediation entities and transfer them for administration, or arrange their sale or securitization in accordance with what its bylaws and internal regulations determine.

n) Invest in the share capital of complementary financial services companies, companies in the securities, insurance and pension sectors in order to fulfill the objective of the Private Development Bank, in the capital of

communal financial entities, development financial entities and in commercial companies whose corporate purpose is the provision of non-financial services supporting productive activities.

o) Enter into cooperation agreements with national and international institutions or entities that comply with the objective of the Private Development Bank.

III. This enumeration is not limiting or exclusive of other operations that the Private Development Bank may carry out for the fulfillment of its objective, including financial operations not explicitly mentioned, which may be exercised upon prior authorization of the Financial System Supervision Authority - ASFI, provided that they are related to its objective and fall within the provisions of this Law.

Article 227. (LIMITATIONS AND PROHIBITIONS). The Private Development Bank may not carry out the following operations:

a) Grant financing directly or indirectly that does not conform to its objective, in modalities that do not fall within the provisions of this Law or are executed without complying with the requirements established in its internal regulations or regulatory regulations.

b) Invest in shares of financial or non-financial companies whose objectives are not consistent with that of the Private Development Bank.

c) Grant credits or provide financing by any means to natural or legal persons that have credits in execution or written off, according to the registry of the Credit Information Center of the Financial System Supervisory Authority - ASFI or of the authorized information bureaus.

d) Grant credits exclusively for the payment of overdue obligations of other financial intermediary entities due to the borrower's insolvency.

e) Refinance credits of other entities. Refinancing of credits granted by the same Private Development Bank may only be granted.

f) Grant credits directly or indirectly destined for consumption without productive purposes or related to productive chains.

g) Receive demand deposits and savings accounts from the public.

h) Others determined by the Financial System Supervisory Authority - ASFI.

Article 228. (FUNDING). To fulfill its objective, the Private Development Bank will complement its own resources with the following funding operations:

a) Other financings from private or public, national or foreign entities, that have objectives consistent with those of the Public Development Bank.

b) Raising of resources through long-term fixed-term deposits,

in accordance with the regulations of the Financial System Supervisory Authority - ASFI.

Article 229. (CORRESPONDENT REGIME). The Private Development Bank may establish a correspondent regime for the delegation of certain services under its jurisdiction to authorized financial intermediary entities, in order to facilitate operations that allow expanding geographic coverage and the access of the rural population to its financial services. It may also maintain correspondent offices outside the country, for the purposes of fulfilling its objective.

SECTION II MULTIPLE BANK

Article 230. (INCORPORATION).

I. Multiple banks shall be incorporated in the legal form of a corporation, and their articles of incorporation and bylaws shall be governed by the provisions of this Law and the Commercial Code as applicable. The shares of multiple banks shall be registered and ordinary.

II. The name or corporate name of multiple banks must necessarily contain the word "banco" in Spanish as the first word.

Article 231. (OBJECTIVE). Multiple banks shall have as their objective the provision of financial services to the general public, favoring the development of national economic activity, the expansion of productive activity, and the development of the country's industrial capacity.

Article 232. (OPERATIONS). Multiple banks are authorized to carry out with the general public the passive, active, contingent, and service operations that are included in Title II, Chapter I of this Law.

Article 233. (OPERATING LICENSE FOR A FOREIGN BANK BRANCH).

I. Banks incorporated abroad that request authorization to establish a branch in the country, with functions similar to those of national multiple banks, shall comply with the rules and regulations issued for such purpose by the Financial System Supervisory Authority - ASFI.

II. Foreign banks operating in the Plurinational State of Bolivia through branches, after complying with what is indicated in Book I, Title III, Chapter XII of the Commercial Code as applicable, shall enjoy the same rights and privileges and shall be governed by the same laws, rules, and regulations applied to national multiple banks.

III. No foreign bank operating in the Plurinational State of Bolivia may, in any case, invoke rights of foreign nationality concerning its business and operations in the country. Any controversy that arises shall be resolved, in law, by the Bolivian courts.

IV. Applications by foreign banks to operate in the country shall be subject to the Financial System Supervisory Authority - ASFI verifying whether, in the country of origin, the conditions for granting a banking license meet at least those required by this Law.

V. Branches of foreign banks operating in the country may not advertise in any form regarding the amount of the capital and reserves of their head office, but they may do so regarding the amount of the capital and reserves allocated to the branch operating in the Plurinational State of Bolivia.

SECTION III SME BANK

Article 234. (INCORPORATION).

I. SME banks shall be incorporated in the legal form of a corporation, and their articles of incorporation and bylaws shall be governed by the provisions of this Law and the Commercial Code as applicable. The shares of SME banks shall be registered and ordinary.

II. The name or corporate name of SME banks must necessarily contain the word "Banco PYME" in Spanish as the first word.

Article 235. (OBJECTIVE).

I. SME banks shall have as their objective the provision of specialized financial services in the small and medium-sized enterprise sector, without restriction on also providing them to microenterprises.

II. Subject to the limitation established in the following article, they may also grant credits to large enterprises.

Article 236. (LEVEL OF CONCENTRATION OF OPERATIONS). The SME bank may grant credits to large enterprises up to a maximum limit of thirty percent (30%) of its credit portfolio.

Article 237. (OPERATIONS). SME banks are authorized to carry out with the general public the passive, active, contingent, and service operations that are included in Title II, Chapter I of this Law.

SECTION IV SAVINGS AND CREDIT COOPERATIVES

Article 238. (INCORPORATION).

I. Savings and credit cooperatives shall be constituted in the legal form of a cooperative society, adopting the limited liability regime, and their deed of incorporation and bylaws shall be governed by the provisions of the General Law of Cooperatives, this Law, and the Commercial Code to the extent applicable.

II. They are required to use the acronym “R.L.” in their corporate name.

III. In order to obtain their legal personality, savings and credit cooperatives must previously obtain approval of the incorporation project from the Financial System Supervisory Authority - ASFI.

IV. A savings and credit cooperative may be constituted through one of the following two ways:

a) Open Savings and Credit Cooperative, authorized to carry out financial intermediation operations with its members and the public,

except for asset operations, which may only be carried out with its members.

b) Corporate Savings and Credit Cooperative, authorized to carry out financial intermediation operations exclusively with its members.

V. Corporate savings and credit cooperatives may convert into open savings and credit cooperatives, meeting the conditions and requirements established by regulations issued by the Financial System Supervisory Authority - ASFI.

Article 239. (PURPOSE). Savings and credit cooperatives shall be constituted as specialized entities with a single purpose for the provision of financial intermediation services, directed at their members and the general public when applicable.

Article 240. (OPERATIONS).

I. Savings and credit cooperatives are empowered to carry out at the national level the passive, active, contingent and service operations included in Title II, Chapter I of this Law, except those indicated in the limitations and prohibitions of Article 241 of this Law and the following:

a) Issue traveler's checks.

b) Carry out financial leasing and factoring operations.

c) Carry out futures operations in various modalities, including futures contracts for the purchase and sale of foreign currencies.

d) Open, advise, confirm and negotiate letters of credit, at sight or at term.

e) Make remittances and issue payment orders payable abroad.

f) Invest in the capital of complementary financial services companies.

g) Invest in the capital of financial companies in the securities sector.

h) Invest in the capital of companies in the insurance and pension sectors.

i) Carry out repurchase operations as the repurchase party.

j) Manage investment funds to carry out investments on behalf of third parties.

II. Open savings and credit cooperatives may carry out active financial intermediation operations only with their members; passive operations shall be carried out with their members, the public, and with national or foreign financial entities.

III. Corporate savings and credit cooperatives shall carry out active and passive operations exclusively with their members. They may also carry out passive operations with entities that provide technical and financial assistance to the savings and credit cooperative sector subject to regulation by the Financial System Supervisory Authority - ASFI.

IV. The provision of current account deposit services, the issuance of credit cards, and the opening and management of accounts abroad require, in each case, express authorization from the Financial System Supervisory Authority - ASFI.

Article 241. (LIMITATIONS AND PROHIBITIONS). Savings and credit cooperatives may not carry out the following operations:

a) Requiring membership fees other than contribution certificates in order to grant member status.

b) Carrying out high-risk operations in speculative markets that are not consistent with their objective and social purpose.

c) Granting financing to real estate businesses or corporate entities whose ultimate purpose is the sale or commercialization of goods and services for strictly commercial purposes, for segments of the population other than the target population of the activities of savings and credit cooperatives.

Article 242. (MANDATORY CAPITALIZATION).

I. The bylaws of savings and credit cooperatives must establish the obligation of members to make annual capitalization contributions, in addition to the legal reserve referred to in Article 421 of this Law, through the purchase of contribution certificates, in the form and conditions determined by the general assembly of members, for the purpose of permanently ensuring compliance with the minimum primary capital set forth in the same Article 218 and the equity adequacy ratio contained in Article 415 of this Law.

II. To comply with this determination, the board of directors must prepare annually, by itself or through independent specialists, studies on the needs for equity strengthening and the proposed capitalization mechanisms for approval by the general assembly of members.

Article 243. (DISTRIBUTION OF SURPLUSES). Savings and credit cooperatives may only distribute the annual surplus earnings to those members with a tenure of more than three (3) months, once the deductions for the establishment of reserves and funds of a mandatory nature have been made, pro rata, according to the amount and time of permanence of each member's contribution certificates during the annual period.

Article 244. (RESTRICTIONS ON THE REDEMPTION OF CONTRIBUTION CERTIFICATES).

I. Savings and credit cooperatives may not redeem contribution certificates if there are accumulated losses, deficiencies in the establishment of provisions or reserves, or if such redemption breaches the technical and legal limits established in this Law.

II. Members of the boards of directors and supervisory boards and the executives who authorize the redemption of contribution certificates in contravention of the provisions of this Article shall be personally and jointly liable, and must reimburse the Savings and Credit Cooperative, with their own assets, the amount of the capital reduction resulting from the illegal redemption of contribution certificates.

Article 245. (SAVINGS AND CREDIT COOPERATIVES OF EMPLOYMENT LINKAGE).

Savings and credit cooperatives of employment linkage are excluded from the application of this Law.

Article 246. (CENTRAL FUNDS).

I. Central funds are authorized bodies for the integration of savings and credit cooperatives, with an operating license granted by the Financial System Supervisory Authority - ASFI. The minimum number of Cooperatives that must constitute a central fund shall be determined by the Financial System Supervisory Authority

• ASFI.

II. The minimum capital required for the establishment of a central fund shall be technically determined by the Financial System Supervisory Authority - ASFI.

III. Savings and credit cooperatives may invest in the capital of a central fund.

IV. A central fund shall be administered by a board of directors under the control of a supervisory board, whose members shall be designated by the participating cooperatives.

V. Decisions shall be made by weighted vote, which shall take into account the number of members held by each cooperative, within a range of one (1) to five (5) votes, guaranteeing the rights of minorities, in accordance with the provisions contained in the governance regulations issued by the Financial System Supervisory Authority - ASFI.

VI. Central funds may carry out the following operations with the participating savings and credit cooperatives:

a) Develop networks of financial services among the participating cooperatives, such as shared teller windows, fund transfers, remittances, service payments, among others.

b) Act as a clearinghouse among the participating cooperatives.

c) Manage financing and resources destined for authorized savings and credit cooperatives, with each cooperative being required to sign the corresponding contracts.

d) The others established in the regulations issued by the Financial System Supervisory Authority - ASFI that fall within the nature of its object and do not contradict the provisions of this Law.

VII. Central clearing houses shall be regulated by the Financial System Supervisory Authority - ASFI; the express regulations issued by the Financial System Supervisory Authority - ASFI for central clearing houses shall establish provisions regarding incorporation, minimum capital, authorization, internal structure, administration and governance, operations, limitations and prohibitions, risk management, distribution of surpluses, opening of offices, admission and withdrawal of participants, intervention, dissolution and liquidation, and other aspects related to the operation of central clearing houses.

SECTION V HOUSING FINANCIAL ENTITIES

Article 247. (CHARACTERISTICS). The Housing Financial Entity is a company whose purpose is to provide financial intermediation services specializing in loans for home acquisition; single-family or multi-family housing construction projects; purchase of land; repair, remodeling, expansion and improvement of individual homes or homes under horizontal property, and granting of microcredit for family housing and for

productive housing infrastructure, as well as housing financial leasing operations.

Article 248. (INCORPORATION CONTRACT AND LEGAL PERSONALITY). The housing financial entity shall be incorporated by means of the execution of a public incorporation deed. Legal personality shall be acquired upon the respective registration in the Commercial Registry, which, after verifying compliance with all legal and tax requirements in accordance with the regulations established for such purpose, shall proceed accordingly.

Article 249. (NAME). The housing financial entity must bear a name to which the words "Housing Financial Entity", or its abbreviation "EFV", must be added.

Article 250. (SHARE CAPITAL AND CAPITAL CERTIFICATES).

I. The share capital shall be represented by capital certificates. The nominal value of each capital certificate shall be established in the incorporation deed and the bylaws of the company.

II. The capital certificate shall confer the status of partner upon its holder and shall grant the right to speak and the right to one vote, regardless of the number of capital certificates that the partner may concentrate, up to the limit of zero point two percent (0.2%). The exercise of the vote is non-delegable.

III. Only natural persons may be holders of capital certificates.

IV. Holders of capital certificates may obtain loans from the housing financial entity.

V. The issuance of new capital certificates shall be regulated by the Financial System Supervisory Authority - ASFI.

Article 251. (TREATMENT OF PROFITS). Annual net profits certified by external auditors, after deducting the legal reserve and others that may be established in the bylaws, and provided that their distribution does not cause a failure to comply with the legal ratios established in this Law and the regulatory norms of the Financial System Supervisory Authority - ASFI, may be distributed to the holders of share capital certificates in proportion to their shareholding.

Article 252. (LIABILITY). The liability of the partners is limited to the amount of the share capital certificates they hold.

Article 253. (OPERATIONS).

I. Housing financial entities are authorized to carry out nationwide passive, active, contingent and service operations that are included in Title II, Chapter I of this Law, including the financing of housing construction projects, except those indicated in the limitations and prohibitions of Article 254 of this Law and the following:

a) Issue traveler's checks.

b) Carry out factoring operations.

c) Carry out forward operations in different modalities, including forward contracts for the purchase and sale of foreign currencies.

d) Open, advise, confirm and negotiate letters of credit, at sight or at term.

e) Carry out transfers and issue payment orders payable abroad.

f) Invest in the capital of development banks and complementary financial services companies, except investments in the capital of clearing and settlement houses, mobile payment service companies, information bureaus, electronic card administrators and money and securities transport companies.

g) Invest in the capital of financial companies in the securities sector.

h) Invest in the capital of companies in the insurance and pension sectors.

i) Administer investment funds to make investments on behalf of third parties.

II. The provision of checking account deposit services, the issuance of credit cards, the opening of accounts abroad, as well as investments in the capital of permitted complementary financial service companies requires, in each case, express authorization from the Financial System Supervision Authority - ASFI.

Article 254. (LIMITATIONS AND PROHIBITIONS). Housing financial entities may not carry out the following operations:

a) Grant credits for purposes other than housing or related to housing, for more than twenty-five percent (25%) of the total credit portfolio.

b) Carry out high-risk operations in speculative markets not consistent with their objective.

c) Others that the Financial System Supervision Authority - ASFI establishes through regulatory norms considering the legal nature of housing financial entities, their general purpose and other aspects inherent to their scope of operation.

Article 255. (ADMINISTRATION).

I. The administration and representation of the housing financial entity shall be in charge of a board of directors composed of a minimum of five members designated by the assembly of partners. The bylaws may provide for a greater number of directors that shall not exceed ten (10).

II. The status of borrower of a partner of the housing financial entity does not constitute a prohibition for the same to be elected and form part of the administration, control and oversight bodies of the housing financial entity, unless the entity's bylaws establish otherwise.

III. The term of the members of the board of directors shall be established in the bylaws, and may not exceed two years. After half of the established term of office has elapsed, half of the board of directors must be renewed, and the remaining directors must be renewed in the next half of the established term of office.

IV. In the case of the first board of directors, the directors who will be renewed at the end of this first half of the term shall be determined by drawing lots.

V. Directors may be re-elected after a period of duration of the functions of director has elapsed.

VI. The partner who is serving as director, internal overseer or executive may take credit from the housing financial entity, provided that the terms and conditions of the operation are not more favorable than those applied to other borrowers.

VII. The bylaws shall establish the functions, attributions, duties and obligations of the board of directors, in addition to what the Commercial Code establishes regarding the powers and obligations of the board of directors of corporations.

Article 256. (COMMITTEES).

I. For the management of operations, exercise of surveillance and control of the functioning of the housing financial entity, as well as for the fulfillment of its legal and statutory attributions, the board of directors must organize risk, credit, audit, electoral and other committees established by the bylaws, and must provide for the minimum participation of one partner randomly chosen per committee, in accordance with the regulations that the Financial System Supervision Authority – ASFI establishes for this purpose.

II. The members of the electoral committee must be chosen by drawing lots in accordance with the regulations that the Financial System Supervision Authority - ASFI establishes for this purpose.

Article 257. (INTERNAL OVERSIGHT). The internal oversight of the housing financial entity must be carried out permanently by an internal overseer, with the attributions of the statutory auditors of corporations established in the Commercial Code. The internal overseer, whether a partner or not, must be designated by the assembly of partners. The internal overseers shall be accountable to the assembly of holders of capital quota certificates. The designation may be revoked by the general assembly.

Article 258. (ASSEMBLY OF PARTNERS). The general assembly of partners legally convened is the highest instance through which the social will of the partners of the housing financial entity is expressed. The general assemblies shall be ordinary and extraordinary.

Article 259. (ORDINARY ASSEMBLIES AND THEIR COMPETENCE).

I. The ordinary general assembly must be convened and meet mandatorily, at least once a year, to consider and resolve the following matters:

a) The annual report and report of the internal overseer, the general balance sheet and the income statement, and any other matter related to the management of the company.

b) The distribution of profits or, where applicable, the treatment of losses.

c) Fixing the remuneration of the electoral committee, directors and internal overseers.

d) The responsibilities of the directors and the internal overseer, if any.

II. In the cases of points a and b, the assembly shall necessarily be convened within three months of the close of the fiscal year.

Article 260. (ELECTION OF DIRECTORS AND INTERNAL OVERSEER). The election and removal of directors and the internal overseer shall be carried out through an election process that shall be in charge of the electoral committee whose duties and obligations shall be regulated through

regulatory norms issued by the Financial System Supervision Authority - ASFI.

Article 261. (EXTRAORDINARY ASSEMBLIES AND THEIR COMPETENCE). The extraordinary general assemblies shall consider all matters that are not within the competence of the ordinary assemblies and, exclusively, the following:

a) The amendment of the bylaws.

b) The issuance of new capital certificates.

c) The issuance of bonds.

d) The increase of capital and reduction or reimbursement of capital.

e) The early dissolution of the company, its extension, its merger;

appointment, removal and remuneration of liquidators.

f) Others that the Law, the articles of incorporation or the bylaws indicate.

Article 262. (QUORUM IN ORDINARY AND EXTRAORDINARY ASSEMBLIES).

Ordinary and extraordinary assemblies shall be held if more than ten percent (10%) of the members are represented, unless the bylaws set a higher number to form the quorum.

Article 263. (REQUIRED VOTES).

I. Resolutions in ordinary assemblies shall be adopted by the absolute majority of the votes present that are not impeded from being cast in relation to the matter submitted for decision, unless the bylaws require a higher number.

II. In extraordinary assemblies, resolutions shall be adopted by the absolute majority of the votes present not impeded from being cast in relation to the matter submitted for decision, unless the bylaws require a higher number.

Article 264. (SECOND CALL).

I. The ordinary and extraordinary assemblies shall validly function on second call, if more than one percent of the capital certificates are represented or a minimum of five hundred members with voting rights. This call shall be made observing the provisions established by the Commercial Code regarding its content, indicating that it is a second call.

II. Decisions shall be adopted by absolute majority of votes unless the bylaws require a higher quorum or a greater number of votes.

Article 265. (THIRD CALL).

I. The ordinary and extraordinary assemblies shall validly function on third call, whatever the number of holders of capital certificates with voting rights present. The members of the electoral committee in office must mandatorily attend this call and it must be held in the presence of officials of the Financial System Supervision Authority – ASFI.

II. Decisions shall be adopted by absolute majority of votes unless the bylaws require a higher quorum or a greater number of votes.

Article 266. (FORM OF INCORPORATION). The housing financial entity shall be incorporated with a minimum of five hundred (500) members whose capital contributions, individually, reach at most zero point two percent (0.2%) of the social capital.

Article 267. (TRANSFER OF CAPITAL CERTIFICATES). The transfer of capital certificates shall be free; however, no member may concentrate more than zero point two percent (0,2%) of social participation.

Article 268. (IMPEDIMENT OF TRANSFORMATION). The housing financial entity may not be transformed.

Article 269. (INTERVENTION, RESOLUTION PROCEEDING AND JUDICIAL FORCED LIQUIDATION).

I. When a housing financial entity incurs the grounds for intervention indicated in Article 511 of this Law, the Financial System Supervision Authority – ASFI, with a reasoned opinion, shall intervene the entity in order to apply the resolution proceeding, the liquidation process with deposit insurance or the judicial forced liquidation in accordance with the provisions of Title IX of this Law and the Civil Code as applicable.

II. If there is a residual balance of the assets, the members shall receive their share of the equity, in proportion to the value of the capital certificates they hold.

Article 270. (LIQUIDATION AND DESTINATION OF ASSETS). In case of liquidation of the housing financial entity, the members shall receive their share of the equity, in proportion to the value of the capital certificates they hold.

Article 271. (TAX OBLIGATIONS). The housing financial entity is subject to compliance with the tax obligations established by the legal provisions in force applicable to financial entities.

Article 272. (APPLICABLE LEGISLATION). Housing financial entities, with respect to their incorporation and operation, are governed by the provisions of this Law, the regulatory rules of the Financial System Supervision Authority – ASFI and, supplementarily in all matters not contrary, by the provisions of the Commercial Code regarding corporations.

SECTION VI DEVELOPMENT FINANCIAL INSTITUTIONS

Article 273. (CHARACTERISTICS).

I. The Development Financial Institution is a non-profit organization, with its own legal personality, created for the purpose of providing financial services with a comprehensive approach that includes social management, seeking to favorably influence the economic and social progress of persons and organizations, as well as to contribute to the sustainable development of small agricultural, fish-farming and timber and non-timber forestry producers, and of micro and small enterprises, mainly in rural and peri-urban areas.

II. The Development Financial Institution is incorporated with indefinite duration; however, its dissolution and liquidation shall proceed in case of supervening situations that determine the impossibility of achieving its purposes.

Article 274. (INCORPORATION AND LEGAL PERSONALITY).

I. The Development Financial Institution, for its incorporation and obtaining of legal personality, shall be governed by the provisions established in this Law and regulatory provisions. The authorization of operation, auditing, control and supervision of its activities, administration and operations are the exclusive competence of the Financial System Supervision Authority – ASFI.

II. The obtaining and registration of the legal personality of Development Financial Institutions whose activities are carried out in more than one department shall be granted by the Ministry of Economy and Public Finance, and when they are located only in the geographic area of one department, it shall correspond to the autonomous departmental government of that jurisdiction to carry out the granting and registration of the legal personality of the Development Financial Institution.

Article 275. (NAME). The Development Financial Institution must have a name to which the words "Development Financial Institution", or its abbreviation "DFI", must be added.

Article 276. (FOUNDERS). The founders of the Development Financial Institution may not be fewer than five (5) natural and/or legal persons with objectives similar to the purposes of the Development Financial Institution.

Article 277. (SHARE CAPITAL). The Share Capital is made up of founding capital and ordinary capital. The constitution of the founding capital is a mandatory requirement for the creation and operation of the development financial institution.

The ordinary capital is complementary in nature and does not constitute a requirement for the creation and operation of the Development Financial Institution.

Article 278. (FOUNDING CAPITAL).

I. The Founding Capital shall be constituted with donation contributions in cash for the purposes of the creation and operation of the Development Financial Institution, the amount of which, at least and at all times, must reach the minimum capital required in Subsection e of

Article 217 of this Law. These contributions are definitive, irrevocable and may not be subject to withdrawal, separation or reimbursement.

II. The founding capital shall be represented by founding capital certificates, which must be issued in the name of the contributor at the time of the cash credit of the corresponding funds. They confer on their holder the right to one vote, regardless of the amount contributed. This right shall be exercised with respect to all matters, except in the case of consideration and decision of the distribution of profits or treatment of losses.

III. The founding capital certificates are not subject to transfer under any concept.

IV. The founding capital may be strengthened with donation resources from other sources aimed at strengthening financial sustainability and supporting the development of the purpose of the Development Financial Institution.

Article 279. (ORDINARY CAPITAL).

I. Ordinary Capital is that part of the share capital contributed by natural or legal persons for purposes of equity strengthening and expansion of the Development Financial Institution. In no case may the sum of these capital contributions be equal to or greater than ninety-five percent (95%) of the founding capital.

II. The ordinary capital shall be represented by ordinary capital certificates. The issuance of these certificates shall be made in the name of the contributor only when the credit of ordinary capital has been made.

III. The ordinary capital certificates grant the right to limited voting and to participate in the allocation of profits, proportionally to the ordinary capital contributed. The holders of ordinary capital certificates shall have the right to vote only on matters relating to the allocation of profits or the treatment of losses, merger, change of the corporate purpose, amendment of the bylaws, early dissolution, its extension, merger and liquidation.

IV. The admission of associates as contributors of ordinary capital must be approved by the general assembly of associates, as well as any transfer of the ordinary capital contribution certificates.

Article 280. (TREATMENT OF MANAGEMENT RESULTS). The annual net profits, certified by external auditors, after deducting the legal reserve and others that may be established in the bylaws, must be fully consolidated into the founding capital, unless there are ordinary capital contributions, in which case profits may be allocated to the ordinary capital associates proportionally to their participation in the share capital, provided that such distribution does not fail to comply with the legal ratios established in this Law and regulatory norms of the Financial System Supervision Authority - ASFI.

Article 281. (LIABILITY). The liability of the holders of founding and ordinary contribution certificates is limited to the amount of their contributions.

Article 282. (OPERATIONS). The Development Financial Institution shall begin operations with a level of basic operations that must be established by the Financial System Supervision Authority - ASFI through regulatory norms; a level that shall not include the taking of deposits. When the Development Financial Institution reaches parameters of equity, technological, institutional and other levels established by the Financial System Supervision Authority - ASFI, this entity shall authorize the taking of deposits and the performance of other passive, active and contingent operations.

Article 283. (SOCIAL MANAGEMENT). The Development Financial Institution, as a complement to the provision of financial services, must develop within the framework of comprehensive credit technologies a social management that contemplates social objectives, strategies and social performance indicators, which shall be subject to the control and measurement of compliance by the Financial System Supervision Authority - ASFI.

Article 284. (LIMITATIONS AND PROHIBITIONS). The Development Financial Institution may not:

a) Grant loans to associates of founding capital or ordinary capital, members of the assembly, directors, members of the committees and executives of the Development Financial Institution.

b) Grant loans with the guarantee of founding or ordinary capital certificates.

c) Carry out operations not consistent with its objective and social purpose.

d) Others that the Financial System Supervision Authority - ASFI establishes through regulatory norms considering the legal nature of the development financial institutions, their general purpose and other aspects inherent to their scope of operation.

Article 285. (ADMINISTRATION).

I. The administration and representation of the Development Financial Institution shall be in charge of a board of directors composed of a minimum of three members, whether associates or not, appointed by the assembly of associates. The bylaws may provide for a greater number of directors, which shall not exceed eight (8).

II. The term of office of the directors shall be established in the bylaws.

III. The bylaws shall establish the functions, powers, duties and obligations of the board of directors and its members, in accordance with the provisions of the Commercial Code regarding the powers and obligations of the board of directors established for corporations.

Article 286. (COMMITTEES). For the management of operations, exercise of oversight and control of the functioning of the Development Financial Institution, as well as for compliance with its legal and statutory powers, the board of directors shall organize risk, credit, audit and other committees in accordance with the provisions of the bylaws.

Article 287. (INTERNAL AUDIT).

I. The Development Financial Institution shall have a control body composed of two members, one representing the holders of foundational capital certificates and the other representing the holders of ordinary capital certificates, called internal auditors, with the powers of the statutory auditors of corporations established in the Commercial Code. The internal auditors shall be appointed by the general assembly of associates. An equal number of alternates shall also be elected. The appointment may be revoked by the general assembly.

II. They may be re-elected after a term of office of internal auditor has elapsed.

III. The internal auditors shall be accountable to the assembly of associates.

Article 288. (GENERAL ASSEMBLY OF ASSOCIATES). The General Assembly of Associates, legally convened, is the highest instance through which the corporate will of the associates of the Development Financial Institution is expressed, with exclusive powers to consider and resolve the matters provided for in the Commercial Code for the ordinary and extraordinary general meeting of shareholders of corporations. The general assemblies shall be ordinary and extraordinary.

Article 289. (MERGERS AND ACQUISITIONS). A Development Financial Institution may acquire full ownership of another financial intermediation entity of similar legal nature and corporate purpose for its merger or acquisition, with prior authorization from the Financial System Supervision Authority - ASFI, in accordance with specific regulations of this Law and the Commercial Code.

Article 290. (TRANSFORMATION). The Development Financial Institution may transform into a SME bank, complying with the conditions and requirements established in this Law and in specific regulations issued for that purpose by the Financial System Supervision Authority - ASFI.

Article 291. (VOLUNTARY DISSOLUTION AND LIQUIDATION). When a Development

Financial Institution resolves its voluntary dissolution and this is authorized by the Financial System Supervision Authority - ASFI, the corresponding liquidation shall be executed. If as a result of the liquidation a residual balance of assets remains, the holders of ordinary capital certificates shall receive their share thereof in proportion to the value of their contributions. The share corresponding to the holders of foundational capital certificates shall be awarded to the public university of the departmental jurisdiction in which the Development Financial Institution is located.

Article 292. (INTERVENTION, RESOLUTION PROCEDURE AND JUDICIAL FORCED LIQUIDATION).

I. When a Development Financial Institution incurs the grounds for intervention indicated in Article 511 of this Law, the Financial System Supervision Authority - ASFI, with a reasoned opinion, shall intervene the entity in order to apply the resolution procedure, the liquidation process with deposit insurance or the judicial forced liquidation in accordance with the provisions of Title IX of this Law and the Civil Code as applicable.

II. If there is a residual balance of assets, the holders of ordinary capital certificates shall receive their share thereof in proportion to the value of their contributions.

The share corresponding to the holders of foundational capital certificates shall be awarded to the public university of the departmental jurisdiction in which the Development Financial Institution is located.

Article 293. (TAX OBLIGATIONS). The Development Financial Institution is subject to compliance with the tax obligations established by current legal provisions.

Article 294. (APPLICABLE LEGISLATION). The Development Financial Institution, with respect to incorporation, operation and liquidation, is governed by the provisions of this Law, the regulatory norms of the Financial System Supervision Authority - ASFI and, supplementarily, insofar as it does not contravene, by the provisions of the Civil Code and Commercial Code regarding corporations.

SECTION VII COMMUNAL FINANCIAL ENTITIES

Article 295. (CHARACTERISTICS).

I. The Communal Financial Entity is an organization, with its own legal personality, created by one or more legally constituted producer organizations or other sectors, constituting the communal capital as a donation, as an essential part of the social capital, for the purpose of financing the activity of its members under promotional conditions, and of third-party producers when it has the corresponding authorization from the Financial System Supervision Authority - ASFI.

II. The Communal Financial Entity is constituted with indefinite duration; however, its dissolution and liquidation shall proceed in the event of unforeseen situations that determine the impossibility of achieving its purposes.

Article 296. (CONSTITUTION AND LEGAL PERSONALITY).

I. The Communal Financial Entity for its constitution and obtaining of legal personality shall be governed by the provisions of this Law and regulatory provisions. The authorization of operation, oversight, control and inspection of its activities, administration and operations are the exclusive competence of the Supervision Authority

of the Financial System - ASFI.

II. The obtaining and registration of the legal personality of Communal Financial Entities whose activities are carried out in more than one Department shall be granted by the Ministry of Economy and Public Finance, and when they are located only in the geographic area of one Department, it shall correspond to the autonomous departmental government of that jurisdiction to carry out the granting and registration of the legal personality of the communal financial institution.

Article 297. (NAME). The Communal Financial Entity must carry a name to which the words "Communal Financial Entity" must be added, or its abbreviation "EFC".

Article 298. (SHARE CAPITAL). The share capital is made up of communal capital and ordinary capital. The constitution of the communal capital is a mandatory compliance requirement for the creation and operation of the Communal Financial Entity. The ordinary capital has a complementary character without constituting a requirement for the creation and operation of the Communal Financial Entity.

Article 299. (COMMUNAL CAPITAL).

I. The communal capital shall be constituted with donation funds in cash and/or in kind, whose amount at least, and at all times, must reach the minimum capital required for a Communal Financial Entity, established in Subsection f of Article 217 of this Law.

II. The constitution of the communal capital is reserved solely to one or more organizations of producers or other legally constituted sectors.

III. The communal capital may be strengthened with donation resources from other sources whose purpose is to strengthen the financial sustainability and support the development of the purpose of the Communal Financial Entity, provided that the donors do not acquire any right nor assume attributions related to the direction of the Communal Financial Entity.

Article 300. (CAPITAL CONTRIBUTION CERTIFICATES).

I. The ordinary capital is that part of the share capital contributed by third natural or legal persons for purposes of patrimonial strengthening and expansion of the financial activity of the Communal Financial Entity. These contributions shall be represented by ordinary capital contribution certificates. In no case may the sum of these capital contributions be equal to or greater than ninety-five percent (95%) of the communal capital.

II. The ordinary capital contribution certificates shall be registered and must be paid in full at the time of their issuance. The acceptance of their holders as associates of the Communal Financial Entity must be approved by the board of directors, as well as any transfer of these contribution certificates.

III. They confer on their holder the right to participate in profits proportionally to the contributed capital. In the event of losses, these must be absorbed in proportion to the contributed capital.

IV. The ordinary capital contributions, whatever the degree of participation within the established limit, confer on their holders the right to designate one member on the board of directors and grant voting rights only on the matter referred to the allocation of

profits corresponding to the ordinary capital.

Article 301. (TREATMENT OF PROFITS). The annual net profits certified by external auditors, after deducting the legal reserve and others that may be established in the bylaws, must be consolidated entirely into the communal capital, unless there are ordinary capital contributions, in which case profits may be allocated to the ordinary capital associates, proportionally to their participation in the share capital, provided that with such allocation the legal ratios established in this Law and regulatory norms of the Supervision Authority of the Financial System - ASFI are not failed to be met.

Article 302. (LIABILITY). The liability of the holders of ordinary capital contribution certificates is limited to the amount of their contributions.

Article 303. (OPERATIONS). The Communal Financial Entities shall begin their operation with a basic level of operations that must be established by the Supervision Authority of the Financial System - ASFI. In this initial stage the Communal Financial Entity may only operate with members of the organization of producers constituting the communal capital. When the Communal Financial Entity reaches parameters of patrimonial, technological, institutional level and others established by regulatory norm of the Supervision Authority of the Financial System - ASFI, this entity shall authorize the operation with third parties.

Article 304. (LIMITATIONS AND PROHIBITIONS). The Communal Financial Entities may not:

a) Grant loans to the holders of ordinary capital contribution certificates without authorization from the board of directors, subject to regulation of the Supervision Authority of the Financial System - ASFI.

b) Accept as guarantee of loans ordinary capital contribution certificates.

c) Carry out operations not in accordance with its objective and social purpose.

d) Grant financing to real estate businesses or business corporations, whose final destination is the sale or commercialization of goods and services for strictly commercial purposes, for segments of the population other than the target population of their activities.

e) Others that the Financial System Supervision Authority - ASFI establishes through regulatory norms considering the legal nature of communal financial entities, their general purpose and other aspects inherent to their scope of operation.

Article 305. (BOARD OF DIRECTORS).

I. The governance, administration and representation of the Communal Financial Entity shall be in charge of the board of directors composed of a minimum of three (3) members, designated by the assembly of the producers' organization, to whose interests the purpose of the Communal Financial Entity responds. When the communal capital has been contributed by more than one producers' organization, the bylaws of the Communal Financial Entity shall establish the degree of participation of each of them in the designation of the members of the board of directors. The bylaws may provide for a greater number of members that shall not exceed eight (8).

II. For the representation of ordinary capital, the board of directors shall provide for the participation of one representative for all its contributors with voting rights solely on matters of

distribution and payment of the profits corresponding to them.

III. The members of the board of directors shall be jointly and severally liable to the Communal Financial Entity for the damages and losses caused by acts contrary to the Law or the bylaws, or by those carried out without the diligence with which they must perform their position.

IV. The status of borrower of a member of the producers' organization does not prohibit them from being part of the governance, administration, representation and control of the Communal Financial Entity, unless the bylaws of the company prohibit it.

V. The associate who is in the position of director, executive or internal auditor may take credit from the Communal Financial Entity, provided that the terms and conditions of the operation are not more favorable than those applied to all credits.

VI. The term of duration of the functions of the directors must be established in the bylaws and must not exceed three (3) years.

VII. The members of the board of directors may be reelected once, after a term of duration of the functions of director has elapsed.

Article 306. (ATTRIBUTIONS).

I. The competences of the board of directors extend to everything concerning the governance and administration of the Communal Financial Entity, without any exception.

II. By way of example and not limitation, the following are attributions and faculties of the board of directors:

a) Exercise the high direction and control of the activity of the Communal Financial Entity.

b) Interpret and agree to the modification of the bylaws, provided that it is convenient to the interests of the Communal Financial Entity and to the best achievement of its purposes.

c) Establish the general or special lines of operation of the entity.

d) Appoint and empower the executive authorities of the Communal Financial Entity and set their remuneration.

e) Approve the strategic plan, the budget, the corresponding report, as well as the financial statements.

f) Adopt agreements on the merger or extinction of the Communal Financial Entity; the latter in case of impossibility of fulfilling its objectives.

g) Agree to the acquisition, disposal and encumbrance of movable or immovable property for or by the Communal Financial Entity, observing the corresponding regulatory norms.

h) Approve codes of good governance and internal operating regulations.

i) Approve the donation of capital or other type of goods.

j) Approve the participation in the communal capital of third natural or legal persons under the form of contributions of ordinary capital and the payment of profits in proportion to the capital contributed.

k) Exercise, in general, all the functions of disposal, administration, conservation, custody and defense of the assets of the Communal Financial Entity, judicially or extrajudicially.

l) In general, all other functions it must carry out for the administration or governance of the Communal Financial Entity, subject in all cases to the corresponding legal provisions.

Article 307. (COMMITTEES). For the management of operations, exercise of surveillance and control of the proper functioning of the Communal Financial Entity, as well as for the fulfillment of its legal and statutory attributions, the board of directors must organize risk, credit, audit and other committees in accordance with those established by the bylaws, and must provide for the minimum participation of one member of the producers' organization randomly elected by each committee, following the regulations established by the Financial System Supervision Authority - ASFI for this purpose.

Article 308. (INTERNAL AUDITORS).

I. The Communal Financial Entity must have a control body composed of two (2) members, one designated by the producers' organization and the other designated by the holders of ordinary capital contribution certificates, called internal auditors, with the attributions of the statutory auditors of corporations established in the Commercial Code. An equal number of alternates must also be elected. When the communal capital has been contributed by more than one producers' organization, the bylaws of the Communal Financial Entity shall establish the degree of participation of each of them in the designation of the internal auditor corresponding to them.

II. They may be reelected after a term of duration of the functions of internal auditor has elapsed. The designation may be revoked by the assembly of the producers' organization.

III. The internal auditors shall be accountable to the assembly of the producers' organization.

Article 309. (TRANSFORMATION). The Communal Financial Entity may not transform into a multiple bank or a SME bank.

Article 310. (VOLUNTARY DISSOLUTION AND LIQUIDATION). When a Communal Financial Entity resolves its voluntary dissolution and this is authorized by the Financial System Supervision Authority - ASFI, the corresponding liquidation shall be executed. If as a result of the liquidation a residual balance of assets remains, the holders of ordinary capital contribution certificates shall receive their share in proportion to the value of their contributions.

The share corresponding to capital contributed as a donation shall be awarded to the public university of the departmental jurisdiction in which the Communal Financial Entity is located or to another entity of similar characteristics.

Article 311. (INTERVENTION, RESOLUTION PROCEDURE AND FORCED JUDICIAL LIQUIDATION).

I. When a Communal Financial Entity incurs any of the grounds for intervention set forth in Article 511 of this Law, the Financial System Supervision

Authority - ASFI, with a reasoned opinion, shall intervene in the entity in order to apply the resolution procedure, the liquidation process with deposit insurance or the forced judicial liquidation in accordance with the provisions of Title IX of this Law and the Civil Code as applicable.

II. If there is a residual balance of assets, the holders of ordinary capital contribution certificates shall receive their share thereof in proportion to the value of their contributions. The share corresponding to capital contributed as a donation shall be awarded to the public university of the departmental jurisdiction in which the Communal Financial Entity is located.

Article 312. (TAX OBLIGATIONS). The Communal Financial Entity is subject to compliance with the tax obligations established by the legal provisions in force.

Article 313. (APPLICABLE LEGISLATION). Communal Financial Entities, with respect to their incorporation, operation and liquidation, are governed by the provisions of this Law, the regulatory rules of the Financial System Supervision Authority - ASFI and, supplementarily, insofar as it does not conflict, by the provisions of the Civil Code and the Commercial Code.

CHAPTER III ON COMPLEMENTARY FINANCIAL SERVICES COMPANIES

SECTION I SCOPE OF APPLICATION

Article 314. (TYPES OF COMPLEMENTARY FINANCIAL SERVICES COMPANIES).

I. The specialized single-purpose companies that provide complementary financial services are subject to the scope of application of the provisions of this Chapter, these being of the following types:

a) Financial leasing companies.

b) Factoring companies.

c) General deposit warehouses.

d) Clearing and settlement houses.

e) Credit information bureaus.

f) Companies transporting monetary material and securities.

g) Electronic card administering companies.

h) Exchange Houses.

i) Mobile payment service companies.

II. In all matters not provided for in this chapter, the provisions contained in this Law for financial intermediation entities shall apply as applicable.

Article 315. (INCORPORATION). Complementary financial services companies

shall be incorporated in the form of sole proprietorships, limited liability companies or corporations, with a single object, and their deed of incorporation and bylaws must be governed by the provisions of this Law and the Commercial Code as applicable. The shares of Complementary Financial Services Companies shall be registered and ordinary, and capital quotas shall be solely registered.

The incorporation of Exchange Houses shall be subject to the provisions of Article 362 of this Law.

Article 316. (FOUNDERS). The founders of a complementary financial services company may not be fewer than five (5) natural persons and/or legal persons, individual or collective, who must not be among those disqualified from being founders as set forth in Article 153 of this Law.

Article 317. (INCORPORATION PERMIT AND OPERATING LICENSE).

The founders of a complementary financial services company must apply for the incorporation permit and the operating license before the Financial System Supervision Authority - ASFI, subject to the authorization regime provided by Title II,

Chapter III of this Law, as applicable.

Article 318. (OPENING OF OFFICES).

I. Complementary financial services companies may open offices within the national territory to carry out the same activities that are the object of their business, authorized to their head office, within the framework of this Law.

II. The opening and closing of offices requires authorization from the Financial System Supervision Authority - ASFI, complying with the requirements established in the regulations issued for that purpose.

Article 319. (MERGERS AND ACQUISITIONS). A complementary financial services company may acquire total ownership of another company with a similar corporate purpose for its merger or acquisition, with prior authorization from the Financial System Supervision Authority - ASFI, in accordance with express regulations of this Law and the Commercial Code.

Article 320. (REVOCATION OF OPERATING LICENSE). The Financial System Supervision Authority - ASFI shall proceed to issue a resolution ordering the revocation of the operating license of an authorized complementary financial services company, based on a reasoned opinion establishing the infractions committed by the entity, the severity of which warrants the decision to impose this sanction. In such case, the publication of the revocation and the beginning of the dissolution and subsequent liquidation process must be carried out in accordance with the provisions of Title IX, Chapter VII of this Law.

Article 321. (DISSOLUTION AND LIQUIDATION PROCESSES). The dissolution and liquidation processes of complementary financial services companies, whether or not patrimonially linked to financial intermediation entities or members of a financial group, shall be governed by the provisions of the Commercial Code and this Law insofar as applicable. The specific regulations issued by the Financial System Supervision Authority - ASFI shall determine the procedures for each case.

Article 322. (INCORPORATION OF OTHER COMPLEMENTARY FINANCIAL SERVICES COMPANIES).

I. The Financial System Supervision Authority - ASFI may incorporate, into the scope of application of this Law, other existing or to-be-created companies that habitually provide

complementary financial services, in accordance with Paragraph III of

Article 19 of this Law.

II. It shall be the responsibility of the Financial System Supervision Authority - ASFI to grant the incorporation permit and the operating license to these companies, subject to the provisions contained in Title II, Chapter III of this Law, insofar as applicable.

SECTION II FINANCIAL LEASING COMPANIES

Article 323. (CAPITAL). The minimum paid-in capital amount of a financial leasing company is set in national currency, at an amount equivalent to UFV500,000.00.- (Five Hundred Thousand Housing Development Units).

Article 324. (OPERATIONS AND SERVICES). Financial leasing companies have a single purpose and may not carry out any other financial or financial intermediation activity. On a complementary basis, they may carry out the following operations and services:

a) Maintain and preserve the leased assets.

b) Assign to another financial leasing company, to securitization companies or to financial intermediation entities, the contracts it has entered into.

c) Sell or lease assets that have been the subject of financial leasing operations.

d) Acquire, rent and sell movable and immovable assets used in activities inherent to the business.

e) Pledge the cash flows from financial leasing contracts entered into with resources from the financing being guaranteed.

f) Issue subordinated obligations.

Article 325. (RELATED-PARTY TRANSACTIONS AND RISK CONCENTRATION).

Financial leasing companies shall be subject to the rules established in this Law for financial intermediation entities, with respect to related-party transactions and risk concentration.

Article 326. (FINANCING). Financial leasing companies, for their financing, may:

a) Issue securities through public offering.

b) Obtain financing from national and foreign financial intermediation entities.

c) Obtain financing from suppliers provided it is directly associated with the purchase of assets that are the subject of a financial leasing contract.

Article 327. (LIMITATIONS AND PROHIBITIONS). Financial leasing

companies may not:

a) Grant guarantees, sureties, letters of guarantee, letters of credit or any other guarantee.

b) Invest in the share capital of another company.

c) Receive money deposits under any modality.

d) Carry out real estate financial leasing operations with financial intermediation entities.

e) Pledge to financial intermediation entities the financial leasing contracts they have entered into.

SECTION III FACTORING COMPANIES

Article 328. (CAPITAL). The minimum paid-in capital amount of a factoring company is set in national currency, at an amount equivalent to UFV500,000.00.- (Five Hundred Thousand Housing Development Units).

Article 329. (OPERATIONS AND SERVICES). Factoring companies may carry out the following operations and services in accordance with the rules of the Commercial Code:

a) Carry out factoring operations based on negotiable invoices or other types of commercial documents authorized by regulation of the Financial System Supervision Authority - ASFI, including electronic invoices when their creation and regulation are in force.

b) Acquire negotiable invoices for goods and services, whose maturity is short-term.

c) Acquire negotiable invoices for goods and services provided on short-, medium- or long-term credit, provided they are not due or in arrears.

d) Purchase negotiable invoices with and without the right to return, restitution and/or compensation by other valid negotiable invoices.

e) Pledge or negotiate in any form the credit rights arising from factoring contracts, with the persons from whom they receive financing.

f) Transfer in irrevocable trust the credit rights arising from factoring contracts, in order to guarantee the securities issuances made by the company.

g) Provide administration and collection services for due debts.

h) Acquire, rent and sell movable and immovable assets used in activities inherent to the business.

i) The others that the Financial System Supervision Authority - ASFI authorizes through express regulations.

Article 330. (FINANCING). Factoring companies, for their financing, may:

a) Issue securities through public offering.

b) Obtain financing from national and foreign financial intermediation entities.

Article 331. (LIMITATIONS AND PROHIBITIONS). Factoring companies may not:

a) Invest in the share capital of another company.

b) Receive money deposits under any modality.

SECTION IV GENERAL DEPOSIT WAREHOUSES

Article 332. (SCOPE OF APPLICATION). The provisions contained in this

Chapter are applicable to general deposit warehouses patrimonially linked to financial intermediation entities or that are members of financial groups.

Article 333. (CAPITAL).

I. The minimum paid-in capital amount of a general deposit warehouse is set in national currency, at an amount equivalent to UFV500,000.00.- (Five Hundred Thousand Housing Development Units).

II. The capital of general deposit warehouses shall be constituted mostly by investments in shares made by financial intermediation entities or controlling companies of financial groups.

Article 334. (OPERATIONS AND SERVICES). General deposit warehouses authorized under this Law and the Commercial Code are empowered to carry out the following operations and services:

a) Storage, conservation and custody of any merchandise or product owned by third parties, in own or leased warehouses, in accordance with the Commercial Code.

b) Operate customs premises, after compliance with the requirements of Law.

c) Issue deposit certificates in accordance with the Commercial Code and pledge bonds.

d) Issue bonds or obligations with specific guarantees.

e) Pack, bag or fraction and carry out any other activities aimed at the conservation of deposited merchandise and products, at the request of the depositor and with the consent of the pledge creditor.

f) Purchase real estate intended for its corporate purpose.

g) Obtain financing for the purchase, improvement or expansion of its facilities.

h) The others that the Financial System Supervision Authority - ASFI authorizes through express regulations.

Article 335. (FINANCING). General deposit warehouses for their financing may:

a) Issue securities, through public offering.

b) Obtain financing from national and foreign financial intermediation entities.

Article 336. (LIMITATIONS AND PROHIBITIONS). General deposit warehouses may not carry out the following operations:

a) Issue deposit certificates for merchandise that had been previously judicially attached.

b) Pledge their assets in matters other than their corporate purpose.

c) Acquire the goods received in pledge.

d) Grant credits under any modality.

e) Engage in the commercialization of merchandise and products.

f) Carry out financial intermediation operations.

Article 337. (GENERIC PROVISION). General deposit warehouses are obligated to maintain monthly a generic provision for contingencies of shortages and losses of goods received in deposit. The Financial System Supervision Authority - ASFI shall determine the corresponding provision percentages.

Article 338. (AUCTIONS). Auctions shall be carried out in accordance with the procedure established in the Civil Procedure Code.

Article 339. (REGULATION). The Financial System Supervision Authority - ASFI is responsible for complying with the issuance of the regulations referred to in Article 1204 of the Commercial Code.

SECTION V CLEARING AND SETTLEMENT HOUSES

Article 340. (CREATION, CONSTITUTION AND OPERATION).

I. The rules for the creation, constitution and operation of clearing and settlement houses shall be issued by the Central Bank of Bolivia - BCB.

II. The authorization of constitution and granting of operating license of clearing and settlement houses corresponds to the Financial System Supervision Authority - ASFI, through regulations issued for that purpose.

Article 341. (CAPITAL). The minimum paid-in capital amount of a clearing and settlement house is set in national currency, at an amount equivalent to

UFV2,500,000.00.- (Two Million Five Hundred Thousand Housing Development Units).

Article 342. (OPERATIONS AND SERVICES). Clearing and settlement houses are empowered to carry out the following operations and services:

a) Sign and keep in force contracts for clearing and settlement services of payment instruments with their participants.

b) Clear payment instruments.

c) Settle net multilateral positions.

d) Maintain a settlement account in the Central Bank of Bolivia - BCB.

e) Preserve electronic records of operations with their corresponding digital signature.

Article 343. (FINANCING). Clearing and settlement houses for their financing may:

a) Issue securities, through public offering.

b) Obtain financing from national and foreign financial intermediation entities.

Article 344. (LIMITATIONS AND PROHIBITIONS). Clearing and settlement houses may not:

a) Invest in the share capital of another company.

b) Receive money deposits under any modality.

SECTION VI INFORMATION BUREAUS

Article 345. (CAPITAL AND RESERVES). The minimum paid-in capital amount of an information bureau is set in national currency, at an amount equivalent to UFV250,000.00.- (Two Hundred Fifty Thousand Housing Development Units).

Article 346. (OPERATIONS AND SERVICES). Information bureaus may carry out the following operations and services:

a) Collect, store, consolidate and process information related to natural and legal persons who are debtors of the financial system.

b) Form databases and distribute processed information corresponding to obligations of an economic, financial and commercial nature, of natural and legal persons, from records, from legitimate and reliable public and private sources, of unrestricted access or reserved to the general public.

c) Enter into reciprocal agreements with public entities for the exchange of

information from databases, which allows adequate identification of the holder. They may also enter into agreements to obtain specific information from private entities.

d) Develop and implement risk management models in financial activity for their distribution and sale.

e) Form databases of operational risk events and develop models for estimating expected losses for their distribution and sale.

f) Store sectoral and branch-of-activity statistical information, and prepare studies and analyses on potential markets and their inherent risks or other criteria for their distribution and sale.

g) Others related to the course of their business, in accordance with regulations issued for that purpose by the Financial System Supervision Authority - ASFI.

Article 347. (FINANCING). Information bureaus, for their financing, may:

a) Issue securities, through public offering.

b) Obtain financing from national and foreign financial intermediation entities.

Article 348. (LIMITATIONS AND PROHIBITIONS). Information bureaus may not carry out the following activities:

a) Provide promotion or marketing services for products or services in general, nor for the financial system.

b) Provide outsourcing services for credit process activities that are the responsibility of financial intermediation entities.

c) Request, collect and provide information for purposes other than the object of their business.

d) Collect information from sources not permitted according to regulations issued by the Financial System Supervision Authority - ASFI.

e) Unduly alter, modify ex officio or eliminate records from databases originating from the Financial System Supervision Authority

• ASFI and from other authorized sources.

f) Assign or transfer to third parties under any modality, for consideration or free of charge, the information received from the Financial System Supervision Authority - ASFI, except that related to the supply of information within the framework of its object.

Article 349. (ACCESS AND INFORMATION REQUIREMENTS OF THE FINANCIAL SYSTEM SUPERVISION AUTHORITY - ASFI). The Financial System Supervision Authority - ASFI is empowered to have unrestricted access at no cost to all information administered by information bureaus, through access to their systems or through periodic information reports. It may require all documentation and information and statistics it considers pertinent for the purpose of carrying out studies and research on the financial system, the sectoral behavior of the economy, risk factors in financial activity and other analyses, within the framework of the exercise of its supervision functions and attributions.

Article 350. (SECURITY MEASURES). Information bureaus must at all times adopt effective security and control measures to prevent the improper use or handling of information, as well as any action or omission that does not derive from the proper performance of their corporate purpose, that causes damage or harm to their holders and/or produces benefits of any nature in favor of the entity or its employees.

SECTION VII CASH AND SECURITIES TRANSPORT COMPANIES

Article 351. (CAPITAL).

I. The minimum paid-in capital amount of a cash and securities transport company is set in national currency, at an amount equivalent to UFV2,500,000.00.- (Two Million Five Hundred Thousand Housing Development Units).

II. The corporate capital may be constituted in cash or in kind, being acceptable in the latter case only investments made in real estate and armored vehicles related to the object of their business.

Article 352. (OPERATIONS AND SERVICES). Cash and securities transport companies may carry out the following operations and services:

a) Transport of cash and securities locally and nationally.

b) Supply and replenishment of banknotes and coins in automated teller machines.

c) Safekeeping in vaults of cash and securities.

d) Cash processing that includes the selection, classification, sorting and counting of banknotes and coins.

e) Others related to the line of activity, with authorization from the Financial System Supervision Authority - ASFI in coordination with the Central Bank of Bolivia - BCB.

Article 353. (FINANCING). Cash and securities transport companies, for their financing, may:

a) Issue securities, through public offering.

b) Obtain financing from national and foreign financial intermediation entities.

Article 354. (PROHIBITIONS AND LIMITATIONS). Cash and securities transport companies may not carry out the following activities:

a) Carry out financial intermediation operations and other unauthorized financial services.

b) Assign or transfer to a third party the authorization to carry out the cash and securities transport service, granted by the Financial System Supervision Authority - ASFI.

c) Outsourcing the service provided.

d) Transporting monetary material and securities for an amount greater than the insured value.

e) Replenishing ATMs on its own account, without authorization from the contracting party.

f) Keeping monetary material and securities of the contracting party in the vault for purposes and periods different from the object of its business.

Article 355. (MEANS OF TRANSPORT). For the provision of the monetary material and securities transport service, the monetary material and securities transport company may use various modes of physical transport, provided that these comply with the requirements established in the regulations issued by the Financial System Supervision Authority - ASFI.

Article 356. (SECURITY). Monetary material and securities transport companies are responsible for the security of the transport of monetary material and securities, as well as for the physical security of the crew and personnel related to this service, and must adopt the necessary operational control and security measures and procedures to guarantee the lives of persons and the proper functioning of the service.

Article 357. (CONTRACTING OF TRANSPORT SERVICES OR ORGANIZATION OF OWN SERVICES).

I. Financial entities subject to the scope of application of this Law must use the services of a monetary material and securities transport company that holds an operating license granted by the Financial System Supervision Authority - ASFI for all transport of monetary material and securities, at the local or national level.

II. Financial entities may also organize their own monetary material and securities transport service by complying with the requirements established for that purpose in the regulations issued by the Financial System Supervision Authority - ASFI, which must take into account the characteristics of rural areas, without neglecting the necessary security conditions.

SECTION VIII ELECTRONIC CARD ADMINISTERING COMPANIES

Article 358. (CAPITAL). The minimum paid-in capital amount of an electronic card administering company is set in national currency, at an amount equivalent to UFV2.500.000,00.- (Two Million Five Hundred Thousand Housing Development Units).

Article 359. (OPERATIONS AND SERVICES). Electronic card administering companies have an exclusive object and may not carry out any other financial or financial intermediation activity. The operations and services they may carry out are the following:

a) Authorize the affiliation of commercial establishments that sell goods or provide services to a network to operate with the electronic cards administered by the entity.

b) Process the consumptions of cardholders with the use of credit, debit, prepaid and other financing or electronic payment cards issued by financial intermediation entities.

c) Operate the electronic payment system derived from the use of electronic cards at ATMs and affiliated commercial establishments

to a network.

Article 360. (FINANCING). Electronic card administering companies may, for their financing:

a) Issue securities through public offering.

b) Obtain financing from national and foreign financial intermediation entities.

Article 361. (SECURITY SYSTEMS). Electronic card administering companies must have security systems aimed at preventing the commission of fraud.

Such systems must generate reports of operational failures that will be sent to and analyzed by the Financial System Supervision Authority - ASFI, in order to prompt measures to prevent the commission of fraudulent acts that may become repeated practices.

SECTION IX EXCHANGE HOUSES

Article 362. (CONSTITUTION). An Exchange House may be constituted in one of the following ways:

a) Company with Legal Personality, through the constitution of a corporation or limited liability company.

b) Sole Proprietorship, in the case of natural persons registered in the Commerce Registry.

Article 363. (CAPITAL). The minimum paid-in capital amount of an Exchange House is set in national currency at an amount equivalent to UFV500.000,00.- (Five Hundred Thousand Housing Development Units) in the case of a company with legal personality, and UFV100.000,00.- (One Hundred Thousand Housing Development Units) for a sole proprietorship.

Article 364. (OPERATIONS AND SERVICES).

I. Exchange Houses constituted as companies with legal personality are authorized to carry out the following operations and services:

a) Purchase and sale of currencies.

b) Exchange of traveler's checks.

c) Operations for the exchange of foreign checks.

d) Sending and receiving money orders at the national level.

e) Payment of remittances from abroad as a payment agent.

f) Other payment services previously authorized by the Financial System Supervision Authority - ASFI within the framework of the regulations issued for that purpose.

II. An Exchange House constituted as a sole proprietorship may only carry out activities of purchase and sale of currencies.

Article 365. (FINANCING).

I. Exchange Houses may, for their financing:

a) Issue securities through public offering.

b) Obtain financing from national or foreign financial intermediation entities.

II. Exchange Houses constituted as sole proprietorships may only obtain financing through national or foreign financial intermediation entities.

Article 366. (LIMITATIONS AND PROHIBITIONS). Exchange Houses are prohibited from carrying out the following operations:

a) Carrying out financial intermediation operations and other unauthorized financial services.

b) Outsourcing the service provided.

c) Including in their advertising and issued documents inaccurate or misleading offers or references and undue guarantees.

d) Purchase real estate that is not intended for own use or for the purpose of its business.

e) Create liens on its assets in matters unrelated to its business.

Article 367. (OBLIGATION TO PROVIDE INFORMATION FROM OTHER ENTITIES ENGAGED IN CURRENCY EXCHANGE). Hotels, tourism centers and commercial businesses in general that habitually carry out currency exchange operations are obligated to provide the Financial System Supervision Authority - ASFI with information on their activities, statistical data, financial statements and other periodic or occasional information that it requests, as well as to allow free access to its officials or inspectors for the review of record and accounting books, documents and technological equipment, provided that they refer to currency exchange operations.

SECTION X MOBILE PAYMENT SERVICE COMPANIES

Article 368. (CAPITAL).

I. The minimum paid-in capital amount of a mobile payment service company is set in national currency, at an amount equivalent to UFV3,000,000.00.- (Three Million Housing Development Units).

II. The capital of mobile payment service companies may be constituted in cash or in kind, with only investments made in real estate and in technological platforms related to the purpose of their business being acceptable in the latter case.

Article 369. (OPERATIONS AND SERVICES). Mobile payment service companies are authorized to carry out the following operations and services:

a) Operate mobile payment services.

b) Issue mobile wallets and operate payment accounts.

c) Electronically execute payment orders and inquiries with mobile devices through mobile telephone operators.

d) Others related to payment services authorized by the Financial System Supervision Authority - ASFI.

Article 370. (FINANCING). Mobile payment service companies may, for their financing:

a) Issue securities through public offering.

b) Obtain financing from national and foreign financial intermediation entities.

Article 371. (LIMITATIONS AND PROHIBITIONS). Mobile payment service companies are prohibited from carrying out the following:

a) Carry out financial intermediation operations and other unauthorized financial services.

b) Outsource the service provided.

c) Carry out other payment services different from those authorized through regulations issued by the Financial System Supervision Authority - ASFI in coordination with the Central Bank of Bolivia - BCB.

Article 372. (MOBILE PAYMENT SERVICES OF FINANCIAL INTERMEDIATION ENTITIES). Financial intermediation entities may organize mobile payment services, through the use of services and mobile devices provided by authorized mobile telephone operators, complying with the requirements established for this purpose by the regulations issued by the Financial System Supervision Authority - ASFI.

Article 373. (TRUST).

I. The mobile payment service company must constitute additional capital destined for the establishment of a trust administered by a financial intermediation entity, as backing for the electronic money it estimates to keep in circulation through the distribution channel of the mobile payment service, in accordance with the regulations issued by the Financial System Supervision Authority - ASFI.

II. Mobile payment service companies must keep the trust in force during their existence and operation.

Article 374. (BUSINESS GROUP RISKS). The mobile payment service company that establishes a contractual relationship with a mobile telephone operator belonging to its same business group must have strategies, policies and procedures for the effective management of the risks to which it is exposed by these circumstances.

Article 375. (SECURITY MEASURES).

I. Mobile payment service companies must at all times adopt effective security mechanisms for the technological platform for the provision of mobile payment services, guaranteeing the confidentiality and safeguarding of operations.

II. This responsibility also corresponds to financial intermediation entities that directly provide mobile payment services, and they must adopt the measures and operational procedures that guarantee the operations and the proper functioning of the service.

Article 376. (SERVICE CONTINUITY). Mobile payment service companies must adopt plans for service continuity in order to avoid damages and losses to financial consumers.

CHAPTER IV FINANCIAL GROUPS

SECTION I FINANCIAL GROUPS

Article 377. (REGULATION AND SUPERVISION OF FINANCIAL GROUPS).

I. Financial groups shall be subject to regulation and supervision on a consolidated basis by the Financial System Supervision Authority - ASFI, when among the financial companies making up the financial group there is at least one financial intermediation entity, whether its activities are carried out entirely in Bolivian territory or outside its borders.

II. Financial companies regulated by the Securities Market Law and the Insurance Law that form part of a financial group shall operate with the limitations and prohibitions established in each of the aforementioned legal provisions.

Article 378. (FORMATION OF A FINANCIAL GROUP). A Financial Group shall be made up of companies, national or foreign, that carry out only activities of a financial nature and exercise direct and indirect control over each other, and may include among their members financial intermediation entities of different types, complementary financial service companies, entities covered by the Securities Market, Insurance and Pension laws.

Article 379. (COMMON CONTROL OF FINANCIAL GROUPS).

I. Financial groups must be organized under the common direction and control of a controlling company authorized by the Financial System Supervision Authority

• ASFI.

II. Common control is understood as the influence exercised by the controlling company of a financial group in the decision-making of the governing bodies of the financial companies that make up the financial group, which may be direct or indirect.

III. Control is direct when the controlling company exercises more than half of the voting power in the general shareholders' meeting of the financial companies that are members of the financial group, through direct or indirect ownership of capital, usufruct contracts, pledges, trusts, voting agreements, or other types of means.

IV. Control is indirect when the controlling company, even if it does not exercise more than half of the voting power in the general shareholders' meeting of the financial companies that are members of the financial group, has the power to appoint, remove, or veto the majority of the members of the board of directors, exercise the majority of votes in board meetings, or govern the operating and financial policies of said companies;

indirect control is also generated when one or more common shareholders of the financial companies that are members of the financial group, individually or jointly, represent at least five percent (5%) of the consolidated share capital of the financial group.

Article 380. (REGISTRATION OF THE SHAREHOLDING COMPOSITION OF FINANCIAL

GROUPS). The controlling company of a financial group has the obligation to register with the Financial System Supervision Authority - ASFI, as applicable, the name and shareholding composition of the financial group and of the financial companies that are members thereof, as well as the common control relationships, keeping it permanently updated.

Article 381. (DE FACTO FINANCIAL GROUP).

I. The Financial System Supervision Authority - ASFI may presume the existence of a financial group when, without having formalized its constitution as such, a set of financial companies, including a financial intermediation entity, present relationships of affinity and common interests with other financial companies that allow deducing the existence of a financial group, such as:

a) The common presence of shareholders, members of boards of directors, and principal officers or executives.

b) The granting of credits for significant amounts in relation to the borrower's equity or without adequate guarantees, to persons who own or administer such financial companies.

c) The possibility of exercising the right of veto at any level of governance of the financial companies.

d) The frequent assumption of shared risks.

e) Others that reveal the carrying out of activities typical of a financial group in the terms described in this Title.

II. Companies that consider that they are not included as established in Paragraph I must prove this fact before the Financial System Supervision Authority - ASFI, providing all documentation they consider pertinent for such purpose and that which is required by the supervisory body.

III. Once due process has been exhausted, if applicable, the Financial System Supervision Authority - ASFI must declare by reasoned resolution the existence of a de facto financial group, which will be obligated to conform as such in accordance with this title, within a period of six (6) months counted from the date on which the financial intermediation entity is notified with the corresponding resolution.

IV. The Financial System Supervision Authority - ASFI, upon justified request of the interested parties, may resolve to extend the period up to the same period, only once, and in case of non-compliance it may restrict operations of the financial entities that are within the scope of competence of the sectoral authorities, without prejudice to other applicable sanctions.

Article 382. (FOREIGN COMPANIES PARTICIPATING IN A FINANCIAL GROUP). Foreign financial companies that operate in Bolivian territory as members of a financial group, after complying with the constitution provisions established in the sectoral regulation, shall enjoy the same rights and privileges and shall be governed by the same legal and regulatory rules regarding consolidated supervision applicable to national financial companies. No foreign financial company that operates in Bolivia may, under any circumstance, invoke rights of foreign nationality with respect to its business and operations in the country. Any controversy that arises shall be resolved, in law, in the courts of the Plurinational State of Bolivia.

Article 383. (INCORPORATION OR SEPARATION OF COMPANIES FROM A FINANCIAL GROUP). The incorporation of financial companies into a financial group or their separation shall be authorized or denied by the Financial System Supervision Authority - ASFI, in accordance with the regulatory provisions issued for such purpose.

Article 384. (ACTING AS A FINANCIAL GROUP). Financial companies that are part of a financial group may:

a) Act jointly before the public, offer combined or aggregated financial services, and declare themselves as members of a financial group.

b) Use names that are the same as or similar to those that identify them before the public as members of the same financial group, or retain the name they had before becoming part of said group by adding the expression "Financial Group".

c) Carry out operations that are permitted to them through offices and customer service branches of the financial companies that are members of the financial group.

Article 385. (FINANCIAL GROUP OF STATE FINANCIAL ENTITIES OR WITH MAJORITY STATE PARTICIPATION). State financial entities or those with majority state participation, constituted under the provisions of Title III of this Law, may form financial groups. The Law shall provide for their creation in accordance with the provisions of this title, and their operational characteristics must be defined through express regulations issued by the Financial System Supervision Authority - ASFI.

Article 386. (LIMITATIONS AND PROHIBITIONS).

I. Companies that form a financial group may not exercise or implement commercial practices that directly or indirectly force financial consumers to use services of the companies of the financial group to which they belong, or restrict the freedom of financial consumers to choose alternatives and resort to the complementary use of services of other authorized financial entities.

II. Companies that form a financial group may not carry out operations among themselves that undervalue or overvalue monetary, accounting or stock market values in order to favor fictitious gains or profits that would increase the equity of one of the companies of the financial group.

SECTION II CONSOLIDATED SUPERVISION OF FINANCIAL GROUPS

Article 387. (ON CONSOLIDATED SUPERVISION). The control of the activities of financial groups and their member financial companies shall be carried out through consolidated supervision in accordance with this Law.

Article 388. (SANCTIONS).

I. The Financial System Supervision Authority - ASFI, in the use of its powers, shall issue the Sanctions Regulation applicable to financial groups.

II. The regulatory regulations to be issued shall include the determination of sanctions for cases in which the action or omission in the opinions expressed by internal auditors, external auditors, risk rating agencies, appraisers and evaluators of financial entities lead to erroneous decisions by the controlling company.

III. These sanctions are not incompatible with those imposed for different infractions, which have been established by this Law and/or sectoral laws, or those generated in the ordinary course for civil or criminal liability as applicable.

Article 389. (CONSOLIDATION OF FINANCIAL STATEMENTS). The controlling company of a financial group shall prepare and publish consolidated financial statements of the financial group in accordance with the accounting standards, means, formats and deadlines established by the Financial System Supervision Authority - ASFI.

Article 390. (ADDITIONAL PRUDENTIAL MEASURES). The sectoral regulator may order the controlling companies of financial groups that the financial entities that are members of the financial group adopt additional prudential measures to those provided in the sectoral regulation, in order to mitigate exposure to the risks they face by belonging to a group.

Article 391. (RESTRICTION OR SUSPENSION OF OPERATIONS). In the event that the Financial System Supervision Authority - ASFI cannot effectively carry out consolidated supervision of a financial group for reasons attributable to the controlling company or any of the financial companies that are members of the financial group, it may suspend or restrict some of the operations of the financial companies that are members of the financial group.

Article 392. (REVOCATION OF AUTHORIZATION). The Financial System Supervision Authority - ASFI may revoke the operating license for the constitution of the controlling company of a financial group, in the event that it is evident that said controlling company adopted inappropriate practices for the management of the financial group or violated the provisions of this Law.

Article 393. (INFORMATION REQUIREMENTS). For the exercise of consolidated supervision of financial groups, the Financial System Supervision Authority

• ASFI may require the controlling companies of financial groups to present the information it requires.

Article 394. (PUBLICATION OF FINANCIAL STATEMENTS).

I. Annually, each controlling company of a financial group must publish in a newspaper of national circulation the financial statements of the financial group, and must submit this information within ten (10) business days after the date of its publication to the Financial System Supervision Authority - ASFI.

II. The financial statements must correspond to the close of each annual fiscal year and be duly audited.

SECTION III ON THE CONTROLLING COMPANY OF FINANCIAL GROUPS

Article 395. (CONSTITUTION OF THE CONTROLLING COMPANY).

I. The controlling company of a financial group shall be constituted as a corporation with registered shares and shall have its domicile in Bolivian territory. Its exclusive corporate purpose shall be the direction, administration, control and representation of the financial group, and its constitution and functions must be regulated by the Financial System Supervision Authority - ASFI within the scope of this

Law, in accordance with the provisions of the Securities Market Law, Pension Law, Insurance Law, Commercial Code and other norms related to the matter.

II. The controlling company of a financial group may only invest in shares of financial companies of the types indicated in Article 378 of this Law, and must at all times exercise dominion and control over each and every one of the financial companies that are members of the financial group, maintaining ownership of at least fifty-one percent (51%) of their shares.

III. The controlling company of a financial group may not carry out operations that are proper to the financial companies that are members of the financial group.

IV. The controlling company of a financial group may incur debt, but in no case may it pledge as collateral the shares of the financial companies that are members of the financial group.

Article 396. (ADMINISTRATION OF THE CONTROLLING COMPANY).

I. The controlling company of a financial group shall be administered by a board of directors, which shall be the highest authority responsible for ensuring that the controlling company and the controlled financial companies that are members of the financial group fully comply with the provisions of this Law, as well as the regulatory rules issued on this matter by the Financial System Supervision Authority - ASFI, without prejudice to the responsibility that the board of directors of each supervised financial entity has to comply with the regulations corresponding to its sector.

II. The administration of the controlling company of a financial group shall be subject to the provisions of this Law, the Securities Market Law, the Pensions Law, the Insurance Law, the Commercial Code and other legal provisions relating to the matter, and to its internal bylaws.

III. The reports and statements that the controlling company issues within the framework of its obligations and responsibilities for controlling the activities of the financial group must invariably bear the signature of the highest authority of its board of directors.

Article 397. (CAPITAL OF THE CONTROLLING COMPANY).

I. The minimum paid-in capital amount of the controlling company of a financial group must be at least the equivalent of the sum of the minimum capitals required by sectoral regulation for each of the supervised financial companies that are members of the financial group. The sectoral rules applicable at the individual level are mandatory for the financial companies that are members of the financial group, and exceptional situations cannot be allowed on the grounds of being part of a financial group.

II. No natural or legal person, except in the case of succession by reason of death, may acquire directly or through third parties control of more than five percent (5%)

of the subscribed and paid-in capital of the controlling company of a financial group without authorization from the Financial System Supervision Authority - ASFI, which shall evaluate and qualify the registration of the transfer, subscription, award or partition of shares of the financial group for its corresponding authorization or rejection.

III. In no case may the financial companies that make up a financial group participate in the capital of the controlling company of the financial group or of the other member financial companies. The financial companies that make up the financial group

may also not be shareholders or participate in the capital of the legal persons that are shareholders of the controlling company of the financial group.

Article 398. (AUTHORIZATION FOR INCORPORATION OF A CONTROLLING COMPANY).

I. The incorporation of the controlling company of a financial group shall be authorized by the Financial System Supervision Authority - ASFI, applying for that purpose the provisions of this Law, as well as the regulatory rules it issues for that purpose.

II. The authorization procedure in all matters relating to the corporate deed, impediments, board of directors, share certificates and their transfers, and other inherent aspects, may be governed, insofar as applicable, by the provisions regulating financial intermediation entities.

Article 399. (DENIAL OF AUTHORIZATION FOR INCORPORATION OF A CONTROLLING COMPANY). The Financial System Supervision Authority – ASFI shall not authorize the incorporation of the controlling company of a financial group if any of the following situations occurs:

a) When the legal, administrative or management structure of the financial group hinders the exercise of consolidated supervision by the Financial System Supervision Authority - ASFI.

b) When the composition of the financial group does not present a clear separation of the activities of each of the financial companies that are members of the group.

c) When the controlling company of the financial group is domiciled outside Bolivian territory.

d) When among the financial companies that are members of the financial group there is one or more foreign financial intermediation entities, without effective consolidated supervision being practiced in the country of origin or international standards on consolidated supervision not being applied.

Article 400. (INTRA-GROUP COMMERCIAL OPERATIONS).

I. It is the responsibility of the controlling company of a financial group to ensure that the financial companies that are members of the financial group cannot carry out commercial, financial or service-provision operations among themselves under terms, rates, amounts, guarantees and commissions different from those they apply in similar operations with third parties.

II. The regulatory rules issued by the Financial System Supervision Authority - ASFI to grant permission for incorporation and an operating license to the controlling companies of financial groups shall establish the type of operations that the financial companies of the group may undertake among themselves.

Article 401. (MERGER AND DEMERGER OF CONTROLLING COMPANIES). The merger and demerger of controlling companies of financial groups shall be authorized or rejected by the Financial System Supervision Authority - ASFI.

Article 402. (DISSOLUTION AND LIQUIDATION OF CONTROLLING COMPANIES).

I. The controlling company of a financial group may only be dissolved when the controlling company of the financial group has ceased to be the holder of the shares of all the financial companies that are members of the financial group, following an opinion from the sectoral supervisory authorities.

II. The dissolution of the controlling company of a financial group shall proceed once all obligations incurred by each of the financial companies that are members of the financial group have been fulfilled.

III. The dissolution and liquidation of controlling companies of financial groups shall be governed by the provisions contained in the regulations of the Financial System Supervision Authority - ASFI, their bylaws and by the provisions of the Commercial Code insofar as applicable.

Article 403. (PARTICIPATION OF DIRECTORS AND ADMINISTRATORS IN THE FINANCIAL COMPANIES OF THE GROUP). The directors and administrators of the controlling company of a financial group may be elected as directors or statutory auditors of the financial companies that make up a financial group.

SECTION IV CAPITAL REQUIREMENT AND GROUP LIMITS

Article 404. (CAPITAL REQUIREMENT).

I. A financial group must have sufficient consolidated regulatory capital to cover all the risks it faces in its operations and activities at a global level. At all times the consolidated regulatory capital of the financial group must be equivalent to at least ten percent (10%) of the total consolidated assets and contingents of the financial group, weighted according to their risks.

II. The consolidated regulatory capital of the financial group is calculated in accordance with the provisions of Article 405 of this Law. At no time shall the consolidated regulatory capital of the financial group be less than the sum of the individual capital requirements of each financial company that is a member of the financial group, according to the current sectoral regulations.

III. The assets and contingents corresponding to operations between controlled financial companies that are members of the financial group shall be subject to prior offsetting, and only the net result shall be considered for the purposes of determining the consolidated capital requirement.

IV. The controlling company of the financial group is responsible for ensuring that under no circumstances does the computation of the consolidated capital requirement of the financial group allow fictitious mechanisms of capital strengthening.

V. The regulations issued by the Financial System Supervision Authority – ASFI shall establish the provisions for the computation of capital adequacy and the weighting of assets of financial groups.

Article 405. (CALCULATION OF CONSOLIDATED REGULATORY CAPITAL). The consolidated regulatory capital of the financial group is the sum of primary capital and secondary capital, after deducting from primary capital the adjustments determined by the Financial System Supervision Authority - ASFI and the external auditors, as follows:

a) The consolidated primary capital of a financial group consists of:

1. Consolidated paid-in capital of the financial group.

2. Consolidated non-distributable legal reserves.

3. Consolidated irrevocable contributions pending capitalization, with prior authorization from the Financial System Supervision Authority - ASFI.

4. Other non-distributable reserves.

5. Consolidated results from previous years for which there is a capitalization agreement.

b) The consolidated secondary capital of a financial group consists of:

1. Subordinated obligations of the financial companies that are members of the financial group, in accordance with the sectoral regulations applicable to each case.

2. Voluntary generic provisions to cover future unidentified losses of the financial companies that are members of the financial group.

For purposes of settling the Corporate Income Tax, voluntary generic provisions are not subject to deduction. The reversal of these provisions that count as secondary capital shall proceed only for their conversion into capital, in which case their transitional accounting record under income accounts shall not be counted as taxable income for purposes of settling the Corporate Income Tax.

c) The following is deducted from the consolidated primary capital of the financial group:

1. Investments in shares, equity interests or subordinated debt of the financial companies that are members of the financial group that have not been eliminated through the consolidation process.

2. Consolidated amount of the deficit of asset provisions and deficit of liability provisions of each financial company that is a member of the financial group.

3. Consolidated amount of expenses not recorded as such and of income improperly recorded of each financial company that is a member of the financial group.

4. Accrued financial income not written off as uncollectible from loans overdue by more than ninety (90) days and from loans classified as uncollectible or of doubtful quality, in the case of financial intermediation entities.

Article 406. (CAPITAL REQUIREMENT DEFICIT).

I. When a financial group presents a capital deficit with respect to the consolidated risk level it faces, the controlling company of the financial group shall immediately communicate such situation to the Financial System Supervision Authority - ASFI, and must submit within the following fifteen (15) calendar days an adequacy plan to bring itself within the required coverage levels for approval by said supervisory authority. The aforementioned plan shall contemplate the submission to prior authorization by the Financial System Supervision Authority – ASFI, regarding the distribution of profits of the financial companies that are members of the financial group, as well as the minimum percentage of profits that shall be allocated to the constitution of reserves or to capitalization.

II. Without prejudice to the foregoing, through the controlling company of the financial group, the Financial System Supervision Authority – ASFI may restrict operations or suspend the authorization for the financial companies that are members of the financial group to carry out certain activities, as long as the situation of capital deficit of the financial group is not remedied.

III. The regulations issued on this matter by the Financial System Supervision Authority – ASFI shall establish operational provisions for the treatment of these cases.

Article 407. (LIABILITY FOR CAPITAL LOSSES).

I. The controlling company of a financial group shall be liable for the capital losses of the financial companies that are members of the financial group up to the value of its own assets, for which it shall enter into a liability agreement with each of them, according to which it undertakes to:

a) Make the capital increases that are necessary in the financial companies that are members of the financial group and/or provide all facilities for third-party investors to subscribe and pay such capital increases.

b) Sell, with authorization from the Financial System Supervision Authority - ASFI, shares of the other financial companies that are members of the financial group or agree to the sale or disposal of its assets, in order to make capital contributions in the financial companies that are members of the financial group that require it.

II. The aforementioned responsibilities and others that may apply shall be expressly provided for in the bylaws of the controlling company of the financial group.

Article 408. (LIMITS ON FINANCING).

I. Regardless of the credit concentration limits established by sectoral regulation, the financial group as a whole may not grant to a borrower or group of borrowers, directly or indirectly, credits, financial leases, investments or contingents that exceed twenty percent (20%) of the consolidated regulatory capital of the financial group. Such limit may be extended up to twenty-five percent (25%), provided that the financings are duly guaranteed according to regulations issued by the Financial System Supervision Authority - ASFI.

II. For purposes of the limit indicated in the preceding paragraph, investments of life insurance companies shall not apply.

III. In the case of contingent operations counter-guaranteed at first demand by foreign banks with investment grade according to the registry of the Financial System Supervision

Authority - ASFI, the limit may reach up to thirty percent (30%) of the consolidated regulatory capital of the financial group.

IV. These limits shall be calculated taking into account the provisions of Article 458 of this Law, regarding the relationships between borrowers that determine that the financings granted represent the same credit risk, as well as the reasonable and sufficient indications that lead to presuming the existence of binding relationships.

Article 409. (EXCESS IN LIMITS).

I. In the event that the financial group presents an excess in the indicated limits, the controlling company shall communicate such situation in writing to the Financial System Supervision Authority – ASFI, within a period no greater than ten (10) business days, attaching an adjustment plan for approval by the aforementioned Supervisory Body, which shall include at least the identification of the causes that provoked the excess, the measures to be adopted to comply with the limits and the restrictions or limitations for the development of operations, indicating deadlines for their execution.

II. Without prejudice to the foregoing, non-compliance with the aforementioned limits shall give rise to the application of the sanctions provided for in Article 388 of this Law by the Financial System Supervision Authority - ASFI, and may include the restriction or suspension of authorization for the financial companies that are members of the financial group to carry out certain operations.

SECTION V INTEGRAL GROUP RISK MANAGEMENT

Article 410. (INTEGRAL GROUP RISK MANAGEMENT SYSTEM).

I. It is the responsibility of the controlling company of a financial group to implement an integral risk management system at a consolidated level, which allows for an effective identification and administration of the risks inherent to the development of activities as a group.

II. The financial companies that are members of the financial group shall adapt their organization and functions manuals, their policies, practices and risk control procedures and other internal norms of a similar nature, incorporating criteria related to their participation at the group level.

Article 411. (REPORTS AND STATEMENTS).

I. Each controlling company of a financial group shall annually present to the Financial System Supervision Authority - ASFI, a report on the integral group risk management, which shall contain at least the following:

a) Description of the activities carried out by the financial companies that make up the financial group.

b) Description of the risks faced by the financial group, identifying types and characteristics, as well as mechanisms for their administration or management.

c) Qualitative and quantitative analysis of the consolidated financial situation of the financial group with a risk approach.

II. At the close of the month of June of each year, each controlling company of a financial group shall submit to the Financial System Supervision Authority – ASFI, a report of the

status of the group's comprehensive risk management, contemplating, among others, a recount of the qualitative and quantitative evaluation of the risks it faces at a consolidated level and of the application of mechanisms for the identification and management of such risks in the last twelve (12) months.

Article 412. (INTERNAL AUDIT). The internal audit unit of the controlling company of the financial group shall include in its annual work plan, the review of accounting practices and principles applied in the consolidation of financial statements of the financial group, the computation of the consolidated capital requirement, compliance with consolidated limits, the group's comprehensive risk management system and, in general, compliance with the provisions contained in this Law.

Article 413. (EXTERNAL AUDIT).

I. The financial statements of the financial group shall be audited by external audit firms that are duly registered with the Financial System Supervision Authority - ASFI. The examination performed by the external auditor shall include, among others, the evaluation of the accounting principles, practices and procedures used and the reasonableness of the financial statements of the financial group as to the fidelity of the patrimonial and financial situation.

II. The external auditor shall evaluate and issue an opinion on the work performed by the internal audit unit of the controlling company of the financial group.

Article 414. (RISK RATING). Risk rating entities, at the time of assigning ratings to financial companies that are members of a financial group, shall incorporate into their evaluation criteria the risks they face for being part of a financial group. The ratings they assign to financial groups shall consider the quality of the group's comprehensive risk management.

TITLE V SOLVENCY AND LIQUIDITY REGIME

CHAPTER I SOLVENCY REGIME

Article 415. (CAPITAL ADEQUACY COEFFICIENT).

I. The capital adequacy coefficient of a financial intermediation entity is the percentage relationship between regulatory capital and assets and contingents weighted by risk factors, including credit, market and operational risks, using the procedures established in the regulations issued by the Financial System Supervision Authority - ASFI.

II. At all times financial intermediation entities shall maintain a capital adequacy coefficient of at least ten percent (10%). The Executive Branch by supreme decree may increase this percentage up to twelve percent (12%), based on the prevailing conditions of the financial system, the macroeconomic situation and the external situation.

Article 416. (REGULATORY CAPITAL).

I. For purposes of this Law, regulatory capital of a financial intermediation entity shall be understood as the sum of primary and secondary capital, deducting from primary capital the adjustments determined by the Financial System Supervision Authority

• ASFI and the external auditors.

II. Primary capital consists of:

a) Paid-in capital.

b) Legal reserves.

c) Irrevocable contributions pending capitalization.

d) Share premiums.

e) Other non-distributable reserves.

III. Secondary capital consists of:

a) Subordinated obligations with a maturity term greater than five (5)

years and only up to fifty percent (50%) of primary capital.

b) Voluntary generic provisions to cover future losses not yet identified. For purposes of settlement of the Corporate Income Tax, voluntary generic provisions are not subject to deduction. The reversal of these provisions that count as secondary capital shall not be considered as taxable income for purposes of the settlement of the Corporate Income Tax when it is made for conversion into capital.

IV. In no case may total secondary capital exceed one hundred percent (100%) of primary capital.

Article 417. (PRIMARY CAPITAL REQUIREMENT). The primary capital of a financial intermediation entity calculated in accordance with Article 416 above, after the deductions and adjustments made by the Financial System Supervision Authority - ASFI and external auditors, at no time may be less than seven percent (7%) of assets and contingents weighted by risk factors. The Executive Branch by supreme decree may increase this percentage based on official recommendations of the Basel Committee.

Article 418. (WEIGHTING OF ASSETS AND CONTINGENTS FOR CREDIT RISK).

I. The following weighting coefficients for assets and contingents for credit risk are established:

a) Zero percent (0%), for cash in vault, deposits in the Central Bank of Bolivia, credits guaranteed with securities issued by the Central Bank of Bolivia or the General Treasury of the State and investments in securities issued by the Central Bank of Bolivia and the General Treasury of the State and of other countries with acceptable risk rating according to regulations of the Financial System Supervision Authority - ASFI; pre-paid contingent credits and credits guaranteed with cash deposits constituted in the financial intermediation entity itself, with self-liquidating guarantees.

b) Ten percent (10%), for financial leasing operations of real estate.

c) Twenty percent (20%), for credits guaranteed by national financial intermediation entities, foreign banks or by coverages of

national insurance companies, with coverage from a foreign reinsurance company for the amount effectively insured, with an investment grade rating assigned by a risk rating agency recognized by the Financial System Supervision Authority - ASFI, as well as loans granted to said financial entities and cash items in the process of collection and loans guaranteed by guarantee funds, closed-end investment funds for guarantee, other guarantee instruments with an acceptable risk rating according to regulations of the Financial System Supervision Authority - ASFI and financial leasing operations of movable assets.

d) Fifty percent (50%), for mortgage loans for housing purposes, granted by financial intermediation entities to individuals and destined exclusively for the acquisition, construction, remodeling or improvement of housing occupied or rented by the debtor owner, the latter case being limited to a first or second home owned by the debtor; housing microcredits or for productive housing structures that comply with the requirements established by regulations issued by the Financial System Supervision Authority - ASFI. This weighting shall not be applicable to loans granted to legal persons or for the acquisition, construction, remodeling or improvement of real estate for commercial activity purposes.

Loans to small and medium-sized enterprises, granted with specialized methodologies to borrowers who demonstrate high repayment capacity, certified through an acceptable risk rating for this category, assigned by a risk rating agency recognized by the Financial System Supervision Authority - ASFI; microcredits to borrowers with high repayment capacity, backed by real guarantees, with an acceptable rating for this category assigned by specialized internal rating systems developed by financial intermediation entities, approved and authorized by the Financial System Supervision Authority – ASFI, according to express regulations issued for that purpose.

e) Seventy-five percent (75%), for loans granted to borrowers who demonstrate solid repayment capacity, certified by a risk rating agency recognized by the Financial System Supervision Authority - ASFI; loans to small and medium-sized enterprises, granted with specialized methodologies to borrowers who demonstrate solid repayment capacity, certified through an acceptable risk rating for this category assigned by a risk rating agency recognized by the Financial System Supervision Authority - ASFI; microcredits to borrowers with solid repayment capacity, backed by real guarantees or acceptable unconventional guarantees, with an acceptable rating for this category assigned by specialized internal rating systems developed by financial intermediation entities, approved and authorized by the Financial System Supervision Authority – ASFI, according to express regulations issued for that purpose.

f) One hundred percent (100%), for all other assets, operations and services that, regardless of their legal form of instrumentation, entail a risk or any kind of financial commitment for the financial entity.

II. Operations that generate assets not contemplated in this Article shall have weighting coefficients determined by regulations issued by the Financial System Supervision Authority - ASFI.

Article 419. (MARKET RISK EXPOSURE).

I. Exposures to market risks for interest rates, exchange rates and prices in on- and off-balance sheet operations of financial intermediation entities shall be calculated based on the standard methodology issued for that purpose by the Financial System Supervision Authority – ASFI, through express regulations.

II. The regulations shall contemplate the alternative of using internal methodologies for determining value at risk for market risks, provided that the financial intermediation entity has authorization from the Financial System Supervision Authority - ASFI to apply this alternative and its methodologies are individually approved by the latter.

Article 420. (OPERATIONAL RISK EXPOSURE).

I. The capital requirements of financial intermediation entities for operational risk exposures shall be calculated based on the standard methodology issued for that purpose by the Financial System Supervision Authority - ASFI through express regulations.

II. The regulatory provisions shall contemplate the alternative of using internal methodologies for determining value at risk for operational risk, provided that the financial intermediation entity has authorization from the Financial System Supervision Authority - ASFI to apply this alternative and its methodologies are individually approved by the latter.

Article 421. (LEGAL RESERVES). Every financial entity, in order to cover eventual losses, must establish a fund called Legal Reserve until it reaches fifty percent (50%) of its paid-in capital. To form said reserve, the financial entity shall allocate at least ten percent (10%) of its annual net profits. Financial entities may form other reserve funds voluntarily and in addition to those determined by this Law.

Article 422. (ADDITIONAL CAPITAL REQUIREMENT). The Financial System Supervision Authority - ASFI is empowered to require a higher equity adequacy ratio than the minimum defined by Article 415 of this Law, through the constitution of additional capital, from the financial intermediation entity that presents a risk exposure situation higher than the maximum tolerable level in accordance with the comprehensive risk assessment and rating system of the Financial System Supervision Authority - ASFI. The increase in the equity adequacy ratio that the entity must comply with shall be estimated based on the additional risk incurred by it, and may not exceed two percentage points of the level that the entity maintained at the time the measure is applied.

Article 423. (REQUIREMENT OF COUNTERCYCLICAL PRIMARY CAPITAL). The Financial System Supervision Authority - ASFI may require all financial intermediation entities to constitute countercyclical primary capital in order to strengthen the solvency of financial entities so that they may have greater capacity to absorb losses and face situations of stress in periods of low or negative economic performance. The regulations of the Financial System Supervision Authority - ASFI shall establish the operational procedures for the constitution and corresponding use of countercyclical primary capital, which may reach a limit of two percent (2%) of assets and

contingents weighted by risk factors.

Article 424. (DISTRIBUTION OF DIVIDENDS OR SURPLUSES).

I. The profits or surpluses obtained by financial entities may preferably be applied to the capitalization of the entity. The ordinary shareholders' meeting, assembly of partners or associates of a financial entity, as applicable, upon proposal of its board of directors or equivalent body, at the end of each annual fiscal year may agree to the distribution of dividends or surpluses, or the reinvestment of net profits certified by external auditors, after deduction of the corresponding legal reserve, to the share capital. Financial entities may not distribute anticipated or provisional dividends or surpluses. Nor may they distribute dividends or surpluses if such distribution causes them to fail to comply with the legal ratios established in this Law.

II. The shareholders, partners or associates, directors, board members, managers or administrators of a financial entity who knowingly authorize the payment of dividends or surpluses in contravention of the provisions of this Law shall be individually and jointly liable for such payment and shall restore to the financial entity from their own funds the amount of such illegally distributed dividends or surpluses.

III. For the purposes of verifying compliance with the provisions of this article, the Financial System Supervision Authority - ASFI is authorized to require financial entities to submit information corresponding to the distribution of dividends or surpluses.

Article 425. (PROHIBITION OF DISTRIBUTION OF DIVIDENDS OR SURPLUSES).

I. The Financial System Supervision Authority - ASFI, in the exercise of its functions, may prohibit the direct or indirect distribution of dividends or surpluses of a financial entity when it presents accumulated losses, deficiencies in the constitution of provisions or reserves, has not recorded all its expenses, maintains deferred expenses, maintains pending registration of provisions for its loans or investments, or there are other items not adequately recognized in its financial statements.

II. The Financial System Supervision Authority - ASFI may restrict the distribution of dividends and order the reinvestment of profits for reasons of capital strengthening and to accompany the growth of the economy.

III. It may also restrict the distribution of dividends and order the reinvestment of profits for reasons of preserving the solvency of the financial entity, when the evaluation reports of the Financial System Supervision Authority - ASFI identify risk of insolvency due to deteriorations in the quality of its assets, increase in losses, reduction of the equity adequacy ratio, substantial increase in assets without the due increase in capital, and others determined by the Financial System Supervision Authority - ASFI on an exceptional basis.

CHAPTER II LIQUIDITY AND LEGAL RESERVE

Article 426. (LIQUIDITY MANAGEMENT).

I. Financial intermediation entities must ensure that at all times and under different alternative scenarios, they have adequate levels of liquidity and sufficient resources to guarantee the continuity of operations and the timely

servicing of their obligations, considering the complexity and volume of their operations and the risk profile they are assuming.

II. The financial intermediation entity shall plan a prudent management of its assets and liabilities, ensuring that cash inflows are related to expected outflows. The level of liquidity defined by the entity shall be based on estimated needs, cash flow projections, levels of deposit concentration, and the quality and convertibility of assets into cash.

Article 427. (CONTINGENCY PLAN).

I. Financial intermediation entities are obligated to structure a contingency plan to face situations of illiquidity arising from abnormal market conditions or environmental events, based on realistic criteria that enable effective implementation thereof.

II. The contingency plan shall set forth strategies to manage liquidity crisis situations of the entity in particular and systemic risk scenarios.

Article 428. (CONTROL OF LEGAL RESERVE).

I. If a financial intermediation entity ceases to constitute the required legal reserve, the Executive Director of the Financial System Supervision Authority - ASFI shall impose a fine of two percent (2%) of the average deficiency incurred in the two-week period. If the deficiency continues, double the fine established above shall be imposed for each successive two-week period.

II. The Financial System Supervision Authority - ASFI may suspend the application of fines for reserve deficiencies due to force majeure verified by this Supervisory Body.

Article 429. (NON-ATTACHABILITY OF THE LEGAL RESERVE).

I. The constituted legal reserve and non-equity deposits made in the Central Bank of Bolivia - BCB shall not be subject to any type of judicial attachment or retention arising from litigation between natural or legal persons.

II. The Central Bank of Bolivia - BCB may debit from the constituted legal reserve any liquidity loans not paid at maturity.

III. The additional reserves established by the issuing entity may be constituted in fixed-income exchange-traded financial instruments, rated and accepted by the Central Bank of Bolivia - BCB.

Article 430. (LIQUIDITY LOANS). The Central Bank of Bolivia - BCB may grant liquidity credits to financial intermediation entities with the constituted legal reserve as collateral, as well as with other guarantees determined by the issuing entity, in accordance with regulations approved by its board of directors.

TITLE VI GOVERNANCE AND RISK MANAGEMENT

CHAPTER I GOVERNANCE

Article 431. (ADMINISTRATION).

I. The administration of financial entities shall be subject to the provisions of this Law and its regulations, the Commercial Code, the legal provisions related to the matter, the corporate governance regulations issued by the Financial System Supervision Authority - ASFI, and the internal bylaws of each entity.

II. Savings and credit cooperatives shall be administered under the direction of a board of directors and the control of a supervisory board. Both collegiate bodies shall be composed of active members of the entity designated in a members' assembly, who must meet at least the following requirements:

a) Possess a seniority of no less than two (2) years as an active member within the savings and credit cooperative.

b) Not have ongoing internal proceedings or sanctioning measures in the compliance stage, nor have overdue, in-execution, or written-off debts within the entity.

c) Not have final sanctioning proceedings for suspension or disqualification by the Financial System Supervision Authority - ASFI. Those with ongoing sanctioning proceedings may not be eligible to apply for the position of director of the board of directors or the supervisory board until such proceedings are concluded.

d) Demonstrate prior experience of at least two (2) years in management or administration functions of activities related to the position.

e) Have an educational level of at least mid-level technical, with proven work experience of no less than two (2) years.

III. Shareholders, members of the board of directors, managers, and employees of complementary financial service companies shall be subject to the same requirements and obligations established for financial intermediation entities insofar as applicable.

Article 432. (INTERNAL BYLAWS). The internal bylaws of financial entities, regardless of their legal form of constitution, must be absolutely framed within the provisions of this Law, for review and non-objection by the Financial System Supervision Authority - ASFI and subsequent registration in the corresponding public registries. Any statutory modification must have the review and non-objection by the Financial System Supervision Authority - ASFI, prior to its registration in the public registries.

Article 433. (SHAREHOLDERS' MEETING, MEMBERS' OR ASSOCIATES' ASSEMBLY).

I. In financial entities, the shareholders' meeting or members' or associates' assembly, as applicable, is the highest governing body that represents the corporate will of the shareholders, members, or associates of the entity, and has exclusive competence to address matters of greatest institutional importance for the entity, within the framework of this Law, the Commercial Code, and its internal bylaws.

II. In order to strengthen the governance of the entity, the internal bylaws must include incentive mechanisms that guarantee the quorum of participants in shareholders' meetings, members' or associates' assemblies.

Article 434. (RIGHTS OF SHAREHOLDERS OR MEMBERS).

I. In financial entities constituted under the legal form of a public limited company, each share shall confer the right to one vote at the shareholders' meeting.

II. In communal financial entities, each communal contribution certificate shall confer the right to one vote except for matters related to the distribution of profits or the treatment of losses. Ordinary contribution certificates grant voting rights only with respect to the distribution of profits or the treatment of losses.

III. In housing financial entities, each holder of one or more contribution certificates shall have the right to one vote, regardless of the number of contribution certificates they hold and the social participation they represent.

IV. In development financial institutions, each holder of one or more foundational contribution certificates shall have the right to only one vote, except for matters related to the distribution of profits or the treatment of losses. Ordinary contribution certificates grant their holder the right to vote for each one they own, solely with respect to the distribution of profits or the treatment of losses.

V. In financial intermediation entities constituted as cooperative societies, foundations, associations or civil societies, each qualified member or associate with voting rights in the members' or associates' assembly must exercise their right in person.

VI. It is the right of every shareholder or member of a financial entity to participate in the deliberations and decisions at shareholders' meetings, members' assemblies or associates' assemblies. The internal bylaws of the entities may establish a system of incentives and/or sanctions for shareholders and members to participate in them.

Article 435. (REPRESENTATION).

I. The internal bylaws of financial entities must establish clear rules for the delegation of representation, when this Law and its sectoral Law do not prevent it, in the cases of shareholders, members or associates with voting rights who cannot participate in the shareholders' meetings or members' or associates' assemblies for reasons of force majeure.

II. The representation must be exercised through a special notarized power of attorney or a power of attorney letter expressly issued for such representation and shall be valid only for one session of the shareholders' meeting, members' assembly or associates' assembly, and must be presented to the board of directors or equivalent body of the entity at least three (3)

days in advance.

Article 436. (SOUND GOVERNANCE PRACTICES).

I. The shareholders' meeting or the members' or associates' assembly of a financial entity must ensure the establishment of sound governance practices in the entity. The Financial System Supervision Authority - ASFI shall establish the minimum guidelines that sound governance practices must contain.

II. The trade associations of financial entities may create governance committees within their organizational structure, in order to share with their affiliated entities experiences and recommendations on sound governance practices. The internal regulations of the trade associations that regulate the

operation of these committees shall establish the form of participation of the members of the boards of directors or equivalent bodies of the affiliated financial entities.

Article 437. (BOARD OF DIRECTORS OR EQUIVALENT BODY).

I. The shareholders' meeting or members' or associates' assembly, as applicable, of the financial entities shall entrust the direction and administration of the entity to a board of directors or equivalent body.

II. The number of members of the board of directors or equivalent body of a corporation, communal society, non-profit civil association, housing financial entity or of the board of administration in a cooperative society, may not be less than five (5)

nor more than ten (10) members, unless this Law provides for a different number of members. At least one of the members of the board of directors or equivalent body must not have nor have had direct intervention in the management of the entity in the last two (2) years; must have recognized professional prestige and extensive experience in the financial field; shall participate under equal conditions as the rest of the members of the board of directors or equivalent body.

III. In corporations, communal societies, housing financial entities, at least one of the members of the board of directors or board of administration must be independent, and must not be a qualified shareholder, member or associate of the entity nor have been one in the last two (2) years.

IV. The election of directors or administration councilors, as well as the duration of their mandates, their cyclical and partial renewal and the responsibilities corresponding to them, shall be established in express regulations issued by the Financial System Supervision Authority - ASFI based on the provisions of this Law for financial entities that are not constituted as corporations. The internal bylaws of financial entities must comply with said provisions regarding the election and appointment of directors and administration councilors.

Article 438. (INTERNAL AUDIT UNIT AND INTERNAL CONTROL BODIES).

I. Every financial entity, whatever its legal nature or form of constitution and organization, must have an internal audit unit and internal control bodies.

II. The internal audit units must develop an independent and objective activity of efficient control, conceived to add value and improve the operations of financial entities, advising the board of directors or equivalent body of the entity on the nature of governance, risk management processes and compliance with internal policies and the legal and regulatory framework in the entity. The head of the internal audit unit shall be appointed by the board of directors or board of administration, on the proposal of the supervisory board or internal audit committee.

III. The internal control bodies of financial entities shall be elected by the shareholders' meeting or members' or associates' assembly, as applicable, and shall answer to said meeting or assembly as the highest body of will of the entity.

IV. The internal control bodies of financial entities and their denominations shall be the following:

a) In corporations and communal societies by shares, it shall be called syndic, with the attributions established by the Code of

Commerce and the obligations determined by this Law.

b) In savings and credit cooperative societies, the control body is the supervisory council, which shall delegate to no more than two (2) of its members, called oversight inspectors, powers for the permanent oversight of the entity, with the attributions of the statutory auditors of corporations, insofar as applicable, and the obligations determined by this Law. The oversight inspectors, as delegates of the supervisory council, shall be accountable to this body and the latter to the general assembly of members.

c) In non-profit civil associations, they shall be called internal auditors, and no more than two (2) associates may be appointed for this purpose, with powers for the permanent oversight of the entity, with the attributions of the statutory auditors of corporations, insofar as applicable, and the obligations determined by this Law. The internal auditors shall be accountable to the board of directors and to the general assembly of associates.

Article 439. (RESPONSIBILITY OF CONTROL AND INTERNAL AUDIT FUNCTIONS).

I. The responsibility of those who exercise control and internal audit functions is absolute in legal terms. It is the obligation of the statutory auditors, oversight inspectors, and internal auditors to warn the shareholders, partners, or associates, in writing, about the non-compliance with legal norms and provisions by the directors, administration and supervisory councilors, and administrators of the financial entity, with communication to the Financial System Supervision Authority - ASFI.

II. Those who exercise control and internal audit functions must not only perform functions related to the audit of accounting aspects, but must also oversee the compliance, application, and dissemination of this Law, its regulations, and the normative provisions issued by the Financial System Supervision Authority

• ASFI, at all levels of decision-making and governance of the entity.

III. The members of the internal control and audit bodies shall exercise their functions and attributions without intervening in or obstructing the administrative management of the entity.

Article 440. (QUALIFIED GUARANTEE). The exercise of the functions of director, administration and supervisory councilor, statutory auditor, internal auditor, oversight inspector, managers, administrators, and general attorneys-in-fact of a financial entity requires a qualified guarantee approved by the Financial System Supervision Authority - ASFI. The directors, members of the board of administration and of oversight, statutory auditors, internal comptrollers and oversight inspectors shall post a bond equivalent to twenty-four (24) months of the highest total salary paid, and the managers, administrators and general attorneys-in-fact, the equivalent of twenty-four (24) months of their total salaries.

Article 441. (REPORT OF APPOINTMENTS TO THE FINANCIAL SYSTEM SUPERVISION AUTHORITY - ASFI). In financial entities, every election of director, member of the board of administration and of oversight, statutory auditor, internal comptroller and oversight inspector, carried out by the shareholders' meeting, partners' assembly or associates' assembly, and the appointment of manager, administrator or general attorney-in-fact carried out in accordance with the procedures established in the internal bylaws and the regulations issued by the Financial System Supervision Authority - ASFI, must be reported to the Financial System Supervision Authority - ASFI within ten (10) days of its occurrence.

Article 442. (IMPEDIMENTS FOR THE EXERCISE OF DIRECTIVE, CONTROL AND ADMINISTRATION FUNCTIONS). The persons who incur the prohibitions of Article 153 of this Law, Article 310 of the Commercial Code, except Numeral 3, and likewise the following, may not be directors, members of the board of administration or of oversight, statutory auditors, internal comptrollers, oversight inspectors, managers, administrators or general attorneys-in-fact of financial entities:

a) The ministers and deputy ministers of the Executive Branch; the directors and general managers of State financial entities or those with majority State participation; the directors, the President and the managers of the Central Bank of Bolivia - BCB; the Executive Director and the area directors of the Financial System Supervision Authority and of the Pensions and Insurance Supervision and Control Authority, until one (1) year after having ceased their functions.

b) The directors, members of the board of administration and of oversight, statutory auditors, internal comptrollers, oversight inspectors or managers of other entities of the national financial system, unless authorized by the Financial System Supervision Authority - ASFI.

c) Spouses and persons related up to the second degree of consanguinity or affinity, according to civil computation. The Financial System Supervision Authority - ASFI may grant a waiver to no more than two (2) persons so related on the board of directors or board of administration or oversight, in accordance with regulations issued by the Financial System Supervision Authority - ASFI.

Article 443. (IMPEDIMENTS FOR EXECUTIVES AND ATTORNEYS-IN-FACT).

I. The managers, deputy managers or general attorneys-in-fact of a financial entity, by having privileged information and being obliged to keep it reserved and confidential, may not serve as director, member of the board of administration or of oversight, statutory auditor, internal comptroller, oversight inspector or manager of another financial entity, except in the case of a company with an equity link.

II. In financial groups, the directors and administrators of the controlling company may be elected as members of the board of directors, trustees or managers of the financial companies that make up the financial group.

Article 444. (IMPEDIMENTS FOR EMPLOYEES).

I. Persons related up to the second degree of consanguinity or affinity according to the computation of the Civil Code may not work in the same financial institution, except with the approval of the board of directors or board of administration of the entity, and up to a maximum of two (2) persons. In which case the approval must be submitted to the Financial System Supervision Authority - ASFI.

II. The impediment determined in the preceding paragraph shall apply to the spouse, and up to a maximum of five (5) cases per entity may be permitted, with prior approval of the board of directors or board of administration of the entity and notification to the Financial System Supervision Authority - ASFI.

III. In the event of a marriage between two employees of the financial entity, and if they do not have the approval of the board of directors or board of administration for their permanence, the entity must dismiss one of them, under the cause of

work incompatibility.

IV. The positions of director, administration or oversight counselor, trustee, internal auditor or oversight inspector are incompatible with that of employee of the same financial entity.

Article 445. (LIABILITY FOR DAMAGES OR LOSSES).

I. Directors, administration and oversight counselors, trustees, internal auditors, oversight inspectors and administrators are civilly and criminally liable in accordance with the Law, when in the exercise of their functions and attributions arising from the Law and its regulatory norms, through deceit or fault they cause damage or loss to the financial entity, to shareholders, partners or associates, or to third parties. The Financial System Supervision Authority - ASFI is empowered to rule by express administrative resolution on the acts of shareholders, partners or associates, directors, administration and oversight counselors, trustees, internal auditors, oversight inspectors and administrators, based on the patrimonial, administrative and operational situation of the entity.

II. The proceedings and reports of the Financial System Supervision Authority - ASFI may be presented as evidence for the compensation of civil damages caused to the entity, to savers or depositors, investors and to financial consumers.

III. In case there are indications of the commission of a crime, the Financial System Supervision Authority - ASFI must refer the files to the Public Ministry for the investigation of the crime and promote criminal action in accordance with the provisions of Numeral 8 of Article 108 of the Political Constitution of the State. A copy of the background and reports of the Financial System Supervision Authority - ASFI shall form part of the investigations conducted by the Public Ministry.

Article 446. (IMPEDIMENT FOR THOSE RESPONSIBLE FOR BANKRUPTCIES OR DECEIT). Those who have been found responsible for bankruptcies or for having committed deceit in companies in general and entities of the financial system in particular, may not have direct or indirect participation in the management or ownership of financial entities, nor may they outsource any type of financial services in financial entities.

Article 447. (POWERS OF THE FINANCIAL SYSTEM SUPERVISION AUTHORITY IN THE GOVERNING BODIES OF FINANCIAL ENTITIES). The Executive Director of the Financial System Supervision Authority – ASFI is empowered to attend, by himself or through the delegate he formally designates, sessions of the shareholders' meeting, assembly of partners and meetings of the board of directors or equivalent body of the financial entity, as an observer.

Article 448. (CORRECTIVE MEASURES). In case of irregularities and/or financial difficulties in a financial entity, concentrations of decision-making power, deviations from the corporate purpose or other types of deficiencies, the Financial System Supervision Authority - ASFI may, in addition to the preventive actions it establishes to remedy such deficiencies, apply corrective or sanctioning measures, which may include the imposition of fines and penalties, suspension of directors, administration and oversight counselors, internal auditors and members of the internal control bodies, instruction to the entity for the removal of directors, administration and oversight counselors, internal auditors or members of the internal control bodies, instruction to call new elections of the board of directors or board of administration and oversight, among others.

CHAPTER II

RISK MANAGEMENT

Article 449. (COMPREHENSIVE RISK MANAGEMENT).

I. Financial entities must implement systems, methodologies and tools for comprehensive risk management, which contemplate objectives, strategies, organizational structure, policies and procedures for the prudent administration of all risks inherent to their activities and operations; based on the regulations issued for this purpose by the Financial System Supervision Authority - ASFI.

II. It is the responsibility of the board of directors or equivalent body of the entity to formally establish a comprehensive risk management process, which must contemplate at least the stages of identification, measurement, monitoring, control, mitigation and disclosure of the different types of risk faced by the entity.

Article 450. (CREDIT RISK MANAGEMENT).

I. Financial entities are obligated to establish processes for credit risk management, with the objective of minimizing levels of exposure to this risk and limiting potential losses that could arise from the uncollectibility of granted financing.

II. The board of directors or equivalent body of the entity is responsible for approving policies and procedures for the sound administration of the credit portfolio, defining indebtedness and credit concentration limits aligned with the entity's risk profile, as well as with the provisions of this Law and the regulations issued by the Financial System Supervision Authority - ASFI.

Article 451. (MARKET RISK MANAGEMENT).

I. Financial entities are obligated to structure market risk management systems, in order to avoid losses arising from adverse movements in market factors such as the interest rate, the exchange rate and the prices of instruments in which the entity has taken a position on or off balance sheet.

II. The board of directors or equivalent body of the entity is responsible for approving policies and procedures for the optimal management of market risks, establishing maximum exposure limits appropriate to the entity's risk profile, as well as to the provisions of this Law and the regulations issued by the Financial System Supervision Authority - ASFI.

Article 452. (LIQUIDITY RISK MANAGEMENT).

I. Financial intermediation entities are obligated to establish liquidity risk management systems, with the purpose of efficiently administering available resources.

II. The board of directors or equivalent body of the entity is responsible for approving policies and procedures to structure a liquidity program that minimizes the risk of loss from not having available funds that ensure the continuity of its operations, or that allows it to operate in adverse scenarios motivated by exogenous factors that could delay or accelerate the inflow or outflow of funds in active, passive and contingent operations.

Article 453. (OPERATIONAL RISK MANAGEMENT).

I. Financial intermediation entities have the obligation to implement effective operational control mechanisms to avoid situations of internal and external fraud. Within the framework of prudent operational risk management, the board of directors or equivalent body of the entity shall approve policies and procedures to identify and control the factors that could cause failures in operational processes, whose impacts would negatively affect institutional objectives, causing the entity damages and economic losses.

II. Special attention shall be given to operational risk factors associated with the sophistication of financial services, the continuous modernization of technology and telecommunications, the incursion into new markets and financial innovations, which give rise to the creation of new financial products and services.

Article 454. (EVALUATION OF THE DEBTOR). With regard to financing operations, it must be kept in mind that financial intermediation entities shall evaluate debtors taking into account their cash flows, their income and debt service capacity, their financial and equity situation, future projects and other factors relevant to determining the debtor's payment capacity, this being the basic criterion of the evaluation. Guarantees are of a subsidiary nature.

Article 455. (PROPERLY GUARANTEED CREDITS). For the different types of credit, the Financial System Supervision Authority - ASFI shall determine through express regulations the criteria and requirements to consider credits as properly guaranteed, taking into account the incorporation of non-conventional guarantees acceptable for the financing of rural activities as provided in Article 99 of this Law.

Article 456. (INDEBTEDNESS LIMITS).

I. A financial intermediation entity may grant credits that are not properly guaranteed to a borrower or borrower group up to five percent (5%) of the regulatory capital of the financial intermediation entity.

II. The regulations of the Financial System Supervision Authority - ASFI shall establish those cases in which the total amount of credits that are not properly guaranteed may exceed the equity of the financial intermediation entity.

III. A financial intermediation entity may not grant or maintain credits with a single borrower or borrower group that, in their entirety, exceed twenty percent (20%) of the regulatory capital of the financial intermediation entity.

IV. Contingent operations, counter-guaranteed at first demand by foreign banks with investment grade, may reach the maximum limit of thirty percent (30%) of the regulatory capital of the financial intermediation entity.

V. For the purposes of the preceding paragraphs, entities and companies of the public sector or those in which the State has shareholding participation shall not be considered as a borrower group.

VI. In microcredit operations, housing credits and consumer credits, the regulations issued by the Financial System Supervision Authority - ASFI shall determine the indebtedness limits per borrower or borrower group and global credit concentration, according to the type of guarantee, based on the size of the regulatory capital of the financial intermediation entity.

Article 457. (CREDITS TO A BORROWER GROUP).

I. Credits granted to a borrowing group shall be considered as such when granted to natural persons and/or legal entities that maintain among themselves any relationship of ownership, administration, guarantees, activity or destination of the credit, when such relationship determines that these credits represent the same credit risk.

II. A borrowing group, whether linked or not, is also one that is qualified as such by the Financial System Supervision Authority - ASFI through express regulations, based on reasonable and sufficient indications that lead it to presume "juris tantum" the existence of binding relationships between natural persons and legal entities of a nature similar to those indicated in the preceding paragraph.

Article 458. (PROHIBITION OF RELATED OPERATIONS).

I. Financial entities may not grant credits or other risk assets to natural or legal persons or groups linked to them.

II. For the purposes of this Law, any borrower, natural or legal person, or borrowing group that meets one or more of the following characteristics shall be considered linked to a financial intermediation entity:

a) Holds a participation greater than ten percent (10%) in the capital of the financial entity, directly or indirectly through third-party natural or legal persons. The Executive Branch may reduce said percentage by supreme decree, based on a specialized study prepared for that purpose.

b) Performs in the financial entity directive, executive, internal control functions, or provides permanent advice to the higher instances of its administration. Any for-profit legal entity in which said borrower has a participation shall also be considered a linked borrower.

c) Being a legal entity incorporated in Bolivia or abroad, the financial entity does not have updated information and identification of its owners. Companies whose shares or those of their owners are regularly traded on a stock exchange are excepted.

d) Does not demonstrate a sufficient commercial or productive purpose to justify the financing received, or whose equity or net resource flow is not sufficient to support it.

e) That the operations have been granted under preferential conditions, without support of specific preference policies formally approved by the entity prior to the date of the operation.

III. Financing operations derived from the complementarity between financial entities indicated in Article 107 of this Law, whose purpose is the expansion of credit coverage, shall not be considered linked credits. The regulations of the Financial System Supervision Authority - ASFI shall establish the requirements and conditions for these cases.

IV. Credits granted to companies and financial entities of the State or with majority State participation in their share capital, and to other public institutions at different levels of government that are eligible subjects

in accordance with the internal regulations of the indicated entities adapted to the provisions of this Law, shall not be considered linked credits to public financial entities or those with majority State participation.

V. Credits to employees, workers or public servants of public companies and entities shall not be considered linked credits to financial entities of the State or with majority State participation.

VI. Credits granted by a Communal Financial Entity to producers or sectors that are members of the constituent organization shall not be considered linked credits to said entity.

Article 459. (CREDIT POLICIES TO AVOID OVERINDEBTEDNESS).

I. Financial intermediation entities must establish within their credit regime prudential policies to avoid causing overindebtedness of borrowers.

II. The Financial System Supervision Authority - ASFI shall permanently evaluate the degree of indebtedness of borrowers in the Bolivian financial system, timely identifying credit practices of financial entities that warrant prudential or operational restrictions, and may instruct their correction.

Article 460. (LIMIT OF FINANCING WITH ANOTHER FINANCIAL ENTITY).

I. A financial intermediation entity may grant financing to another national or foreign financial intermediation entity up to twenty percent (20%) of its regulatory capital, subject to regulations.

II. A financial intermediation entity may receive credits from other financial intermediation entities, up to one (1) time its regulatory capital. This limit may be extended up to two (2) times the entity's regulatory capital, under express authorization of the Financial System Supervision Authority - ASFI subject to regulations.

III. The regulations issued for this purpose by the Financial System Supervision Authority - ASFI shall determine the limits for financing between financial intermediation entities, within the framework of the complementarity between financial entities indicated in Article 107 of this Law, whose purpose is the expansion of credit coverage.

Article 461. (ADJUDICATED ASSETS).

I. Movable or immovable assets that become property of a financial entity, as a consequence of judicial or extrajudicial actions exercised to obtain the recovery of its financing, must be sold within a maximum period of one (1)

year, from the date of adjudication. At the date of adjudication of an asset, the financial entity must provision at least twenty-five percent (25%) of the book value of said asset.

II. If the respective sale is not made within the mentioned period, the financial entity must make the following provisions:

a) At least fifty percent (50%) of the book value of the asset, once the term of one (1) year from the date of award has ended.

b) One hundred percent (100%) of the book value of the asset before the end of the

second year from the date of award.

III. Financial entities may not incorporate foreclosed assets as assets for use, without authorization from the Financial System Supervision Authority - ASFI.

Article 462. (TRANSFER OF REAL ESTATE FOR USE AND LOAN PORTFOLIO).

I. The transfer of real estate for use and of loan portfolio shall be subject to regulations issued by the Financial System Supervision Authority - ASFI.

II. The transfer of loan portfolio with non-regulated entities shall be regulated by the Executive Branch.

Article 463. (INVESTMENTS IN FIXED ASSETS).

I. The total amount of investments made by a financial intermediation entity in fixed assets, in its agencies and branches, in shares of complementary financial services companies, companies in the securities, insurance and pension sectors, and development banks, shall not exceed the amount of its regulatory capital.

II. In financial groups, the regulations issued by the Financial System Supervision Authority - ASFI shall determine the limits of such investments.

Article 464. (PROHIBITIONS AND OPERATIONAL RESTRICTIONS). Financial intermediation entities may not:

a) Receive as collateral for loans, in whole or in part, shares, contribution certificates or similar securities of the entity itself.

b) Grant loans for the purpose that their proceeds be used, by any means, for the acquisition of shares, contribution certificates or similar securities of the entity itself.

c) Grant loans to directors, members of the boards of administration and oversight, trustees, internal comptrollers, oversight inspectors, members of the credit committee and other special committees, during the time their mandate lasts, permanent advisors, internal auditor, attorneys-in-fact and other officers whose decisions may compromise the solvency of the entity, and with borrowers or borrower groups linked to these persons. The loans held by such persons must be fully paid before assuming their duties.

The restriction does not apply to corporate credit cards intended to cover representation expenses, subject to regulation by the Financial System Supervision Authority - ASFI.

The total amount of loan operations granted by a financial intermediation entity to its non-executive employees may not exceed one and a half percent (1.5%) of its regulatory capital, nor individually ten percent (10%) of said limit.

d) Provide bonds or guarantees or in any other way back monetary or mutual obligations between third parties. The regulations issued by the Financial System Supervision Authority - ASFI shall establish the conditions and requirements for the granting of bonds and guarantees for this purpose.

e) Give their assets as collateral, directly or indirectly, under any modality provided by Law. This limitation does not extend to guarantees granted for liquidity credits of the Central Bank of Bolivia - BCB, in accordance with regulations of the issuing entity, nor to guarantees granted in contracts made with the State in accordance with legislation issued for the case.

f) Be partners or shareholders of non-financial companies.

g) Carry out any type of raffle, drawing or other similar modalities intended to grant prizes or other mechanisms based on chance to attract or retain customers, without due authorization from the competent body and the Financial System Supervision Authority - ASFI.

h) Pay directors or members of the boards of administration and oversight, members of senior management, advisors and executives, salaries, wages, fees, premiums, bonuses or any other form of remuneration or compensation, that in total exceed twenty percent (20%) of the administrative expenses of the entity.

i) Take public deposits in any modality, on behalf of companies that are not authorized by the Financial System Supervision Authority - ASFI to operate as a financial intermediation entity in the national territory.

Article 465. (CONTROL AND RISK MANAGEMENT IN TRUSTS).

I. Every trust contract entered into by a financial entity as trustee shall expressly state that the entity may not affect its own patrimony in the administration and final attainment of the trust; however, it shall establish the obligation of the latter to implement effective internal control instances that ensure the efficient fulfillment of its objective and an adequate administration of the assets entrusted to it.

II. The Financial System Supervision Authority - ASFI shall carry out the control and supervision of trust activities, verifying the operation of the operations, compliance with the contract and the policies of the trustee. Likewise, it shall monitor the levels of exposure to risks and instruct the prudential measures and corrective actions that may be warranted.

Article 466. (RESTRICTIONS FOR THE HIRING OF EXTERNAL AUDITORS AND OTHERS).

I. A financial intermediation entity may not hire external auditors, appraisal experts, risk evaluators who are spouses or relatives of its directors, members of the boards of administration or oversight and managers, up to the fourth degree of consanguinity and second degree of affinity, according to civil computation.

II. The hiring of external auditors shall be subject to the provisions contained in Article 33 of this Law.

Article 467. (RESTRICTIONS IN THE CORRESPONDENT FUNCTION). In no case may a financial intermediation entity acting as a correspondent perform operations proper to a branch.

Article 468. (PAYMENT IN KIND OF SHARES OF RESTRUCTURED COMPANIES).

I. When the financial intermediation entity receives in payment ordinary or preferred shares of new issues representing the capital of a debtor company, restructured by virtue of the Voluntary Restructuring Law, they may not represent more than one third of the equity of the restructured company; these shares may be held in ownership by the creditor financial intermediation entity for the maximum term established for the payment of the debt in the transaction agreement.

If after this period the financial intermediation entity continues in possession of the shares, it shall obligatorily make a provision equivalent to one hundred percent (100%) of the amount recorded in its books.

II. For financing purposes, the new credit operations arising from the transaction agreement shall not be considered as related-party loans.

III. The shares received in payment arising from the transaction agreement entered into by virtue of the Voluntary Restructuring Law shall be considered as risk assets for the purposes of calculating credit limits.

Article 469. (CONTRIBUTIONS FOR SOCIAL, CULTURAL AND GUILD PURPOSES). Financial entities may make contributions or donations for social, cultural, guild and charitable purposes, with the limitations determined by regulations issued by the Financial System Supervision Authority - ASFI.

Article 470. (COPY OF BACKUP INFORMATION). The financial entity must keep a copy, on microfilm or by other electronic or computerized means, in such a way that they can be reproduced for ten (10) years, of all the information and documentation that supports its active, passive, contingent operations and complementary financial services.

Article 471. (LIMITS ON INVESTMENTS ABROAD). The Financial System Supervision Authority - ASFI shall regulate the maximum limits of investments abroad that financial intermediation entities may maintain.

TITLE VII REGISTRATION AND RESERVE OF INFORMATION

CHAPTER I CONFIDENTIALITY OF INFORMATION

Article 472. (RIGHT TO RESERVE AND CONFIDENTIALITY). Financial operations carried out by natural or legal persons, Bolivian or foreign, with financial entities shall enjoy the right of reserve and confidentiality. Any information referring to these operations shall be provided to the holder, to whom the holder authorizes or to whom legally represents the holder, in addition to the cases indicated in Article 473 of this Law.

Article 473. (LIFTING OF CONFIDENTIALITY).

I. The reserve and confidentiality of the information referred to in the preceding Article 472 shall not apply when it is required by:

a) The competent judicial or prosecutorial authorities, by means of a reasoned judicial order or prosecutorial request within a formal process.

b) The public authorities in charge of carrying out investigations in cases in which commission of financial crimes, acts of corruption, origin of fortunes and crimes that give rise to the legitimization of illicit profits is presumed. The instances called by Law to investigate these cases shall have the attribution to know said financial operations, without the need for judicial authorization.

c) The authorities of the tax administration, within an ongoing tax verification, on a determined responsible party.

d) The directors and executives of financial intermediation entities within the information that these entities exchange with each other, in accordance with reciprocity and banking and financial practices.

e) The financial investigations unit within the scope of its competence.

f) The Executive Director of the Financial System Supervision Authority - ASFI, in the exercise of its supervision functions, and to provide information to other supervision and regulation institutions or analogous international bodies, as well as to law enforcement institutions and foreign or international judicial authorities, within the framework of the provisions of Article 491 of this Law.

II. In the case of Subsections a and c, the request for information shall be channeled through the Financial System Supervision Authority - ASFI. The request for information indicated in Subsection b may be made directly to the financial entities, which shall be obliged to provide the information with a copy to the Financial System Supervision Authority - ASFI.

III. Persons who access reserved and confidential information by virtue of the provisions of this Article may only use it for the purposes indicated therein and with the judicial or administrative consequences to which it may give rise.

Article 474. (INFORMATION NOT SUBJECT TO CONFIDENTIALITY). Information referring to the following cases shall not be subject to reserve and confidentiality:

a) Checking accounts closed for issuing checks without provision of funds.

b) Debtors in execution and written off from the financial system.

c) Statistical information of a non-personalized nature about financial entities.

Article 475. (OBLIGATION TO KEEP CONFIDENTIALITY). The following are obliged to keep reserve and confidentiality of the matters and operations of the financial system and its clients, which come to their knowledge in the exercise of their functions:

a) The directors, administration and surveillance board members, trustees, internal auditors, surveillance inspectors, executives and officials of:

1. Financial intermediation entities.

2. Complementary financial services companies.

3. External audit firms.

4. Risk rating companies.

5. Controlling companies of financial groups.

6. Companies patrimonially linked to financial intermediation entities.

b) The authorities, executives and officials of public sector institutions.

Article 476. (CONFIDENTIALITY OF THE OFFICIALS OF THE FINANCIAL SYSTEM SUPERVISION AUTHORITY - ASFI). The Executive Director and the employees of the Financial System Supervision Authority - ASFI, even after ceasing their functions, are prohibited from disclosing information related to the documents, reports or operations of financial entities or of persons related to the financial system. The executive or employee who infringes this prohibition shall be removed from office, without prejudice to the corresponding civil or criminal liabilities.

Article 477. (ACTION FOR THE PROTECTION OF PRIVACY). Every individual or collective person who considers themselves to be unduly or illegally impeded from knowing, objecting to, or obtaining the elimination or rectification of data registered by financial entities, by any physical, electronic, magnetic or computer means, in public or private files or databases, or that affect their fundamental right to intimacy or personal or family privacy, or to their own image, honor and reputation, may file the Action for the Protection of Privacy provided for in Article 131 of the Political Constitution of the State.

CHAPTER II INFORMATION CENTERS

Article 478. (CREDIT INFORMATION CENTER). The Financial System Supervision Authority - ASFI shall administer a database called "Credit Information Center", which must record the historical payment behavior of borrowers in the financial system and their levels of indebtedness, allowing information to be provided about the credit history of borrowers.

Article 479. (INCENTIVES FOR TIMELY PAYMENT). Financial entities must have practices, benefits and incentives that improve the financing conditions for clients that record full and timely compliance in the payment of all their credit obligations. The Financial System Supervision Authority - ASFI shall regulate the application of this Article.

Article 480. (OPERATIONAL RISK INFORMATION CENTER). The Financial System Supervision Authority - ASFI shall administer a database called "Operational Risk Information Center", which must record the events and losses due to operational failures or deficiencies incurred by financial entities.

Article 481. (CLAIMS AND SANCTIONS INFORMATION CENTER). The Financial System Supervision Authority - ASFI shall administer a database called "Claims and Sanctions Information Center", which must be publicly accessible and shall systematically and clearly record statistics of claims by subject and entity, presented by financial consumers to financial entities, as well as the final sanctions issued by said authority to financial intermediation entities.

Article 482. (SECTORAL INFORMATION CENTER). The Financial System Supervision Authority - ASFI shall administer a database called "Sectoral Information Center", which must record information on sectoral economic activities and levels of credit attention by financial entities, allowing the identification of economic sectors and geographic areas with growth potential or with

insufficient financing.

Article 483. (INFORMATION ON PERSONS DISQUALIFIED FROM THE EXERCISE OF FINANCIAL ACTIVITY). The Financial System Supervision Authority - ASFI must maintain a registry of directors, executives and officials, and former directors, former executives and former officials suspended or disqualified from the exercise of financial activity. This registry shall form a single database shared with the Authority for the Supervision and Control of Pensions and Insurance, to which all entities that are part of the financial regulation system shall have access.

Article 484. (INFORMATION REGISTRIES). Within the framework of preserving a sound and efficient financial system, the Financial System Supervision Authority - ASFI shall create other information registries on the following topics:

a) List of shareholders, partners or associates of financial entities.

b) List of directors, administration and surveillance board members, administrators, members of internal control bodies and officials in general, of financial entities.

c) List of external audit firms authorized and unauthorized to perform audit work in financial entities authorized by the Financial System Supervision Authority - ASFI.

d) List of checking accounts closed for issuing checks without sufficient funds.

e) List of debtors with loans written off by authorized financial intermediation entities, for twenty years, counted from the accounting record of said write-off; once this period expires, the right to be forgotten operates for the borrower, and they may not be reported with the written-off debt.

The regulations issued by the Financial System Supervision Authority

• ASFI shall establish the requirements and conditions for the application of this right.

f) Registry of officials and employees, former officials and former employees suspended or disqualified from the exercise of financial activity.

g) Statistical information of a non-personalized nature on operations and clients of financial entities.

Article 485. (REGULATION OF INFORMATION CENTERS AND REGISTRIES). The Financial System Supervision Authority - ASFI shall regulate the aspects required for the implementation and operation of the information centers and registries mentioned in the preceding articles.

TITLE VIII ILLEGAL FINANCIAL ACTIVITIES AND FINANCIAL CRIMES

CHAPTER I CONTROL OF ILLEGAL FINANCIAL ACTIVITIES

Article 486. (PROHIBITION OF CARRYING OUT FINANCIAL INTERMEDIATION ACTIVITIES AND COMPLEMENTARY FINANCIAL SERVICES WITHOUT AUTHORIZATION).

I. No person, natural or legal, may carry out massively and habitually in the

national territory, activities proper to financial entities regulated by this Law, including commercial acts classified by Numerals 4, 5, 8 except currency exchange, 12 and 20 of Article 6 of the Commercial Code, without prior authorization of constitution and operation granted by the Financial System Supervision Authority - ASFI, with the formalities established in this Law. The regulations issued by the Financial System Supervision Authority - ASFI for this purpose shall establish the technical and legal criteria to determine the massive and habitual nature of these activities.

II. Operations carried out in contravention of the provisions of this article shall be null and void by operation of law, without prejudice to the civil and criminal liabilities that the competent body may determine for those who carry out such operations.

Article 487. (PROHIBITION OF ADVERTISING TO UNAUTHORIZED PERSONS).

I. Any natural or legal person, national or foreign, domiciled or not in the country, that does not comply with the requirements and formalities relating to the organization and operation of financial entities provided in this Law, is prohibited from making notices, publications and putting into circulation papers, writings, printed materials, or using audiovisual media, mobile devices and virtual sites, or resorting to any other physical or electronic means of massive reach, through which it disseminates information that induces the supposition that it has legal authorization to carry out in the country the activities reserved by this Law for financial entities.

II. Likewise, no natural or legal person may use in its corporate name, in Spanish or another language, terms that may induce the public to confuse it with legally authorized financial entities.

Article 488. (ORDER OF SUSPENSION OF UNAUTHORIZED FINANCIAL ACTIVITIES). The Financial System Supervision Authority - ASFI, on its own initiative or upon a public complaint filed before it, is empowered and legitimized to order the immediate suspension of financial intermediation activities or complementary financial services carried out by unauthorized natural or legal persons that infringe the prohibitions of Article 486 and Article 487 of this Law. If necessary, it may order the preventive and definitive closure of the offices and premises where such activities are carried out, with the power to directly request the support of the public force, elevating the background to the Public Ministry for the prosecution of its agents or legal representatives and of those who promote or incite the commission of illegal financial activities. The operational process shall be governed by the regulations issued by the Financial System Supervision Authority - ASFI.

Article 489. (INSPECTION POWER).

I. The Financial System Supervision Authority - ASFI, in the exercise of the powers indicated in Article 488 above, may examine, by the means it considers pertinent, books, accounts, files, documents, correspondence and in general any other information necessary for the fulfillment of its functions. The owner, legal representative, attorney-in-fact or administrator of the business or company that carries out financial intermediation activities or complementary financial services without due authorization, is obliged to provide all the information and documentation required by the personnel of the Financial System Supervision Authority - ASFI and to provide the facilities for the fulfillment of its task. The refusal, resistance or non-compliance with this obligation shall give rise to the imposition of any of the sanctions established in Article 41 of this Law.

II. The Financial System Supervision Authority - ASFI may require all the background information it deems necessary to inform itself about the financial situation, resources, administration or management, conduct of its agents, degree of security and prudence with which its investments are made, and in general any other matter of the business or company that carries out financial intermediation activities or complementary financial services without due authorization, that in its opinion should be clarified. It may also receive the testimony of third parties and request the exhibition of records and documents.

III. The Financial System Supervision Authority - ASFI shall send background information to the financial crimes investigation instance indicated in Article 493 of this Law, requesting the adoption of precautionary measures on the persons involved in the commission of the alleged financial illicit acts as well as on their assets.

CHAPTER II ON FINANCIAL CRIMES

Article 490. (DOCUMENTARY REPORT OF ALLEGED CRIMINAL FACTS).

I. Financial entities shall report in documentary form, under responsibility, to the Financial System Supervision Authority - ASFI within ten (10) calendar days following knowledge of any alleged criminal act committed in the financial entity by its officials or by third parties, as well as when directors, administration and surveillance councilors, trustees, internal auditors, surveillance inspectors, administrators, attorneys-in-fact and employees are sanctioned for criminal acts.

II. The Financial System Supervision Authority - ASFI shall issue regulations to establish technical and legal criteria for the identification of these cases and the administrative sanctions for those who fail to comply with this obligation.

Article 491. (FINANCIAL CRIMES). Chapter XII on financial crimes is incorporated into Title XII of the Criminal Code, with the following text:

“CHAPTER XII FINANCIAL CRIMES

Article 363 quater. (FINANCIAL CRIMES). A financial crime is committed by a natural or legal person through its legal representative, who by action or omission incurs in any of the criminal typifications detailed below:

a) Financial Intermediation without Authorization or License. Anyone who, on their own account or on behalf of another, directly or indirectly, carries out financial intermediation activities without prior authorization from the Financial System Supervision Authority, shall incur deprivation of liberty of five (5) to ten (10) years and a fine of one hundred (100) to five hundred (500)

days.

b) Improper Use of Influence for the Granting of Credit. The director(s), administration and surveillance counselor, executive or officer of a financial intermediation entity, who with the intention of favoring themselves or the entity in any way or obtaining for themselves or a third party economic benefits, knowingly authorizes or approves the

granting of credits to borrowers or borrower groups linked to the entity, shall incur deprivation of liberty of three (3) to eight (8) years and a fine of one hundred (100) to three hundred (300) days.

If as a result of this activity damage is caused to third parties or to the entity itself, the penalty shall be increased by one half.

c) Misappropriation of Financial Funds. Anyone who without authorization and through the use of technological means or other fraudulent maneuvers, seizes or attempts to transfer funds, whether for their own benefit or that of third parties, shall incur deprivation of liberty of five

(5) to ten (10) years and a fine of one hundred (100) to five hundred (500) days.

When the illicit act is committed by an employee of the financial entity taking advantage of their position or the error of another, the penalty shall be increased by one half.

d) Forging of Illicit Financial Results. Anyone who, with the purpose of obtaining an undue advantage, carries out fraudulent maneuvers to alter the price of negotiable securities or public offerings by disguising or hiding true facts or circumstances or by affirming or insinuating false or deceptive facts or circumstances, shall incur deprivation of liberty of five (5) to ten (10) years and a fine of one hundred (100) to five hundred (500) days.

The penalty shall be increased by one half for anyone who, with the intent to obtain a benefit for themselves or a third party or to harm another market participant, makes the price rise, fall or remain, or facilitates the sale or purchase of securities, through the affirmation or simulation of false facts or circumstances or the distortion or concealment of true facts or circumstances, in such a way as to induce error about the essential characteristics of the investment.

e) Falsification of Accounting Documentation. Anyone who knowingly or with the purpose of hiding situations of illiquidity or insolvency of a financial entity or complementary financial services company, falsifies materially or ideologically the financial statements of the entity, the accounting entries or other financial information, shall incur deprivation of liberty of five (5) to ten (10) years and a fine of one hundred (100) to five hundred (500) days.

f) Dissemination of False Financial Information. The individual person who by any means disseminates or entrusts the dissemination of false information about the Bolivian financial system or its entities, which induces or provokes the massive withdrawal of deposits from one or several financial intermediation entities, incites or induces clients not to comply with acquired financial commitments, damaging or deteriorating the image and stability of a financial intermediation entity or the national financial system.

Excluded from the scope of this subsection are studies, analyses and opinions of a scientific nature that, based on authentic and verifiable information, are aimed at evaluating or qualifying the financial system or its actors, seeking to maximize their efficiency and development, shall incur deprivation of liberty of five (5) to ten (10) years and a fine of one hundred (100) to five hundred (500) days.”

Article 492. (SPECIFICITIES OF THE CRIMINAL PROCESS).

I. The criminal action for a financial crime is of public order and shall be exercised ex officio by the Public Ministry assigned to the Financial System Supervision Authority - ASFI,

with the participation that this Law recognizes to the Financial System Supervision Authority - ASFI as victim in representation of the State, as regulator and supervisor of financial intermediation and complementary financial services activities, being legitimized to become a complainant. The exercise of criminal action may not be suspended, interrupted or terminated, except in the cases provided for in the Criminal Procedure Code.

II. Cases of financial crime shall be assigned to Sentencing Courts composed of technical judges specialized in financial matters.

III. The Public Ministry, ex officio or at the request of the Financial System Supervision Authority - ASFI, shall direct the investigation of a financial crime and promote criminal action before the jurisdictional bodies, with the assistance of multidisciplinary teams of the Financial System Supervision Authority - ASFI contributing to the technical investigation body. For this purpose, the Financial System Supervision Authority - ASFI may request the collaboration of any body of the Plurinational State, and they may not excuse themselves under their own responsibility.

IV. The Financial System Supervision Authority - ASFI, upon becoming aware by any means of the commission of an alleged financial crime, as a preventive measure may proceed, in coordination with the assigned prosecutor, to the search, inspection, seizure and confiscation of the evidentiary means and instruments, in the places, offices and domiciles where the act occurred, as well as order the freezing of accounts within the financial system of the persons involved. It shall gather and secure the evidence, and shall execute the proceedings and actions that are ordered by the prosecutor. The assigned prosecutor may order the arrest and apprehension of the possible perpetrators or participants in the act.

V. The documentation, reports and opinions of the regulatory and supervisory bodies and institutions of foreign states or international organizations officially sent to the Financial System Supervision Authority - ASFI regarding these cases constitute full evidence.

Article 493. (FINANCIAL CRIME INVESTIGATION INSTANCE). The investigation of financial crimes shall be the responsibility of an operational body made up of specialized personnel from the Bolivian Police and the Public Ministry. The Financial System Supervision Authority - ASFI shall designate a multidisciplinary team to carry out technical work that contributes to the investigation.

Article 494. (RESPONSE TO REQUESTS FOR INFORMATION).

I. The Financial System Supervision Authority - ASFI, on its own or through the Financial Investigations Unit, without incurring a violation of the right to reserve and confidentiality of information referred to in Article 472 of this Law, upon prior request and without the need for reciprocity, may exchange information related to the prosecution of illegal financial activity, legitimization of illicit gains and financial crimes, with analogous international institutions or bodies, as well as with national, foreign or international law enforcement institutions and judicial authorities, observing the formalities of the international treaties and conventions to which the Plurinational State of Bolivia is a signatory.

II. The information requested by the Financial System Supervision Authority - ASFI from national or foreign bodies or institutions, for the purposes of investigating illegal financial activities, legitimization of illicit gains, financial crimes or infractions of supervision, regulation and control rules, within the territory

national, shall not require any judicial or administrative formality for its presentation to the judicial authorities.

CAPÍTULO III DE LA UNIDAD DE INVESTIGACIONES FINANCIERAS

Article 495. (FINANCIAL INVESTIGATIONS UNIT).

I. The Financial Investigations Unit - UIF is a decentralized entity, with autonomy of administrative, financial, legal and technical management, under the trusteeship of the Ministry of Economy and Public Finance, responsible for regulating the regime for the fight against money laundering and terrorist financing in consultation with the Ministry of Economy and Public Finance and the supervision authorities; investigating cases in which the commission of crimes of legitimization of illicit gains, terrorist financing and others within its competence is presumed; and carrying out the analysis, processing and transmission of information to prevent and detect the crimes indicated in the present

Artículo.

II. The rules established for this purpose by the UIF shall be of mandatory compliance by natural persons, financial entities, entities of the securities market, insurance, pensions and others that the UIF includes within the scope of its regulation as subjects obligated to report suspicious operations related to the crimes of legitimization of illicit gains and terrorist financing.

III. The Financial System Supervision Authority, the Pensions and Insurance Supervision and Control Authority, the Gaming Social Control and Supervision Authority and other supervision authorities whose supervised entities are designated by the UIF as obligated subjects, shall monitor compliance, by the entities under their regulation, with the rules issued by the UIF.

IV. The UIF shall monitor compliance with its regulations with respect to those obligated subjects that are not under the supervision of an entity that specifically exercises that attribution.

Article 496. (REGULATION). The Executive Branch, by Supreme Decree, shall establish the organization, powers, the regime of administrative infractions and procedures for the imposition of administrative sanctions and appeals.

Article 497. (BUDGET). The operating budget of the UIF shall be covered by the General Treasury of the Nation. For this purpose, the Financial System Supervision Authority - ASFI must transfer to the General Treasury of the State - TGE an amount to be determined by the Ministry of Economy and Public Finance by ministerial resolution.

Article 498. (HIGHEST EXECUTIVE AUTHORITY).

I. The Highest Executive Authority of the UIF is the Executive Director General, who shall be appointed by Supreme Resolution.

II. It defines the matters within the competence of the UIF by administrative resolutions.

Article 499. (REQUIREMENTS TO BE DIRECTOR). To be Executive Director General of the UIF, the following requirements must be met:

a) Be Bolivian and a citizen in exercise of rights.

b) Hold a bachelor's degree in the economic and/or legal field.

c) Have experience in financial, economic, legal or administrative matters.

d) Have knowledge in the prevention and control of money laundering and terrorist financing.

Article 500. (FOREIGNERS). In order to carry out operations in the financial system, foreign citizens must prove compliance with the requirements established for that purpose by the UIF.

Article 501. (POLICIES FOR KNOWING THE CUSTOMER). Financial entities must implement, for all their activities, operations and services, policies for knowing their customers, requiring the pertinent information and documentation, the scope of which shall be regulated by the Financial System Supervision Authority - ASFI.

Article 502. (APPLICATION OF PROVISIONS OF THE FINANCIAL INVESTIGATIONS UNIT). Financial entities shall apply the due diligence procedures and other provisions issued by the UIF relating to the prevention, detection and control of activities of legitimization of illicit gains, financing of terrorism, corruption and other illicit activities

TÍTULO IX TRATAMIENTO DE ENTIDADES FINANCIERAS CON PROBLEMAS

CHAPTER I REGULARIZATION PROCESS

Article 503. (GROUNDS FOR REGULARIZATION). A Financial Intermediation Entity is in a regularization process when it incurs one or more of the following situations:

a) Reduction of its primary capital between thirty percent (30%) and fifty percent (50%), within a period of one year.

b) Its capital adequacy ratio is less than that required by

Article 415 of this Law and greater than the limit established in Subsection c of Article 511 of this Law.

c) Legal reserve deficiencies greater than one percent (1%) of the required reserve, for two (2) consecutive periods or four (4) discontinuous periods within one year.

d) When the ratio of first-class assets to the total deposits received by the entity is less than the figure determined by the Financial System Supervision Authority - ASFI, within a range of zero point eight (0.8) to one point two (1.2). First-class assets are made up of the direct portfolio classified in the first two categories according to regulations of the Financial System Supervision Authority - ASFI, cash and cash equivalents, temporary investments, property and equipment, and permanent investments in securities classified as investment grade.

e) Repeated non-compliance with the written instructions and orders of the Financial System Supervision Authority - ASFI.

f) Submission of false financial information or fraudulent documentation.

g) Existence of management practices that seriously endanger public deposits, the liquidity and solvency situation of the entity, among others:

1. That the capital contributions of the shareholders of a corporation or the contributions of the partners or associates are financed directly or indirectly through the financial intermediation entity itself.

2. That the external auditors have abstained from issuing an opinion, that their opinion is adverse, or that the financial intermediation entity has omitted the publication of the external audit report.

3. That the misappropriation or use in its business of public or private funds entrusted in mandate or trust to the financial intermediation entity has occurred.

4. That the financial intermediation entity grants or maintains credits, investments or other contingent operations with a borrower or group of borrowers, outside the limits permitted by this Law.

5. That the financial intermediation entity grants or maintains credit operations, contingent operations and investments with borrowers or borrower groups linked to the entity, or with guarantee of its own shares.

Article 504. (REGULARIZATION PLAN).

I. When the financial intermediation entity incurs any of the grounds of the

Previous Article, its board of directors or equivalent body and its administrators must immediately report it to the Financial System Supervision Authority - ASFI.

II. In the event that it is the Financial System Supervision Authority - ASFI that detects the financial intermediation entity's incurrence of any of the grounds indicated in the Previous Article, the sanctions provided in this Law shall be imposed on the board of directors or equivalent body and the administrators. Additionally, the Financial System Supervision Authority - ASFI shall summon the board of directors or equivalent body and the administrators of the financial intermediation entity, to notify them of the start of the mandatory regularization process, indicating the facts that motivated it.

III. In any of the situations described in the two (2) preceding paragraphs, the board of directors or equivalent body and the administrators must mandatorily prepare and submit a regularization plan within a period no greater than ten (10) business days from the date of the report or notification, as the case may be.

IV. The Financial System Supervision Authority - ASFI, within the following ten (10) business days of receiving the regularization plan, shall rule on it. In case there are observations, the plan may be amended only once, within the following two (2) business days.

V. The plan shall necessarily contemplate the regularization of the facts that motivated it. The regularization period may not be greater than three (3) months, from the non-objection of the plan by the Financial System Supervision Authority - ASFI. It may end before the established term, when:

a) The financial intermediation entity demonstrates to the satisfaction of the Financial System Supervision Authority - ASFI, that it amended the facts that originated the regularization.

b) The financial intermediation entity incurs any of the grounds indicated in Subsections a, b, c and e of Article 511 of this Law.

VI. The non-presentation or rejection of the regularization plan shall be grounds for intervention in accordance with the provisions of Subsection d of Article 511 of this Law.

VII. The presentation of the regularization plan shall not exempt the financial intermediation entity and its board of directors or equivalent body and its administrators from the provisions of Articles 41, 52 and 439 of this Law.

VIII. During the validity of the regularization plan, the financial intermediation entity may not distribute directly or indirectly its profits or surplus.

Article 505. (MEASURES CONTAINED IN THE REGULARIZATION PLAN). The regularization plan prepared and presented by the financial intermediation entity must contain all measures necessary to overcome the facts that motivated the regularization process, among which the following are cited by way of example:

a) Absorption of losses against equity accounts.

b) Replenishment of primary capital.

c) Replenishment of legal reserve funds.

d) Immediate restitution of State resources, to the satisfaction of the affected public entity.

e) Implementation of a program for the sale of non-productive assets.

f) Presentation of a plan for the reduction of administrative expenses.

g) Removal of directors, members of the boards of administration and oversight, trustees, internal auditors, surveillance inspectors, administrators, attorneys-in-fact and officials, in the cases that apply.

h) A program for the sale, merger or capital expansion.

i) Deposit in the Central Bank of Bolivia - BCB or investment in securities issued by the Plurinational State of Bolivia of all increase in deposits, as well as resources from the recovery of loans, both for principal and interest, and the recovery of other assets.

j) Suspension of active operations, contingent operations, and complementary financial services.

k) Commitment not to enter into new service contracts, or renew existing ones.

l) Conducting special external audits, under the terms established by the Financial System Supervision Authority - ASFI.

m) Suspension of all projected investment in complementary financial services companies, companies in the securities, pensions and insurance sectors or sale of existing ones.

n) Commitment not to substitute guarantees or release them to the detriment of the entity.

o) Suspension of acquisition of real estate.

p) Suspension of opening of branches, agencies and other service points or representative offices.

q) Implementation of a liability restructuring program.

r) Implementation of a loan portfolio recovery program.

Article 506. (DOCUMENTATION ATTACHED TO THE REGULARIZATION PLAN).

I. The regularization plan shall establish the conditions, procedures, goals and measurement indicators to verify its compliance.

II. The presentation of the plan must be made with the following documentation:

a) Joint sworn statement of the directors, members of the boards of administration and oversight and the principal executives of the entity, on the veracity of the financial statements and the non-existence of other facts that could negatively affect the equity situation of the entity.

b) Commitment of the directors, members of the boards of administration and oversight, and legal representatives to execute the presented plan.

c) Report of the internal control bodies to the Financial System Supervision Authority - ASFI, ruling on the situation of the financial intermediation entity.

d) Minutes of the extraordinary shareholders' meeting or assembly, assembly of partners or associates, which considered and approved, at a minimum, the regularization plan and the adjustments to the financial statements.

CHAPTER II VOLUNTARY LIQUIDATION, MERGER AND TRANSFORMATION

Article 507. (VOLUNTARY LIQUIDATION).

I. The voluntary liquidation of a financial intermediation entity shall only proceed after it has returned all of its deposits and with prior authorization of the Financial System Supervision Authority - ASFI.

II. For this purpose, the specific regulations issued by the Financial System Supervision Authority - ASFI shall be applied considering its legal nature, and the provisions of the Commercial Code and the Civil Code, insofar as applicable.

Article 508. (MERGER). The Financial System Supervision Authority - ASFI shall authorize the merger of financial intermediation entities, in accordance with the provisions of the Commercial Code or applicable legal provision, depending on the legal nature of each entity.

Article 509. (LIQUIDATION OR MERGER OF STATE FINANCIAL INTERMEDIATION ENTITIES). The liquidation or merger of State financial entities or those with majority State participation shall be resolved by the Executive Branch with a reasoned opinion of the Financial System Supervision Authority - ASFI before the Ministry of Economy and Public Finance.

Article 510. (TRANSFORMATION). The transformation processes of financial intermediation entities shall be carried out with prior authorization of the Financial System Supervision Authority - ASFI, according to the provisions of this Law for each type of financial entity and in accordance with the regulations issued for that purpose.

CHAPTER III INTERVENTION OF FINANCIAL INTERMEDIATION ENTITIES

Article 511. (GROUNDS FOR INTERVENTION). Any of the following or a combination thereof shall be grounds for intervention:

a) Cessation of payments due to non-compliance in the payment of one or more liquid and payable obligations.

b) Reduction of its primary capital by fifty percent (50%) or more, within a period of one (1) year.

c) Insufficiency greater than fifty percent (50%) of the level of capital adequacy ratio established in Article 415 of this Law.

d) The non-presentation or rejection of the regularization plan, or its partial or total non-compliance upon the expiration of its term. The regulations of the Financial System Supervision Authority - ASFI shall establish the criteria for classifying the regularization plan as non-compliant.

e) If during the execution of the regularization plan the financial intermediation entity carries out operations that evidently make it unviable.

Article 512. (INTERVENTION PROCESS).

I. The Financial System Supervision Authority - ASFI, for the grounds indicated in the preceding Article, by express resolution shall order the intervention of the affected financial intermediation entity and the appointment of an intervener, for the purpose of applying the resolution procedure, the liquidation process with deposit insurance or the forced judicial liquidation in accordance with the provisions of this Title.

II. The intervention shall last until the Financial System Supervision Authority - ASFI revokes the operating license of the intervened entity.

III. As an effect of the intervention resolution, the Financial System Supervision Authority - ASFI may totally or partially suspend the operations of the intervened entity for a term not exceeding thirty (30) calendar days, extendable only once.

IV. Preventive concurso proceedings or bankruptcy of financial intermediation entities shall not be applicable. The legal regime for the forced liquidation of financial intermediation entities shall be governed by the provisions of Chapter VII of this Title. When bankruptcy is requested for circumstances that would make it admissible under common

law, the judges shall reject it ex officio within forty-eight (48) hours following the filing of the petition, and must inform the Financial System Supervision Authority - ASFI of this fact.

Article 513. (INTERRUPTION OF TERMS, SUSPENSION OF RIGHTS AND CESSATION OF DUTIES OF REPRESENTATIVES OF THE INTERVENED ENTITY).

I. From the date of publication of the intervention resolution in a written media of national circulation, the terms of prescription, expiration and others, as well as the procedural terms in lawsuits filed for the recovery of the loan portfolio and the ordinary proceedings that may have arisen therefrom, are interrupted. These terms shall automatically run again from the business day following the perfection of the assignments of the credits to their new holders, with public notification in the press to the assigned debtor to be made by the new holder.

II. During the intervention, the rights of the shareholders, partners or associates and their creditors in relation to the intervened entity shall be automatically suspended. Likewise, the directors, members of the boards of administration and surveillance, trustees, internal auditors, surveillance inspectors, administrators, managers and general attorneys-in-fact of the intervened entity shall cease their duties, and the powers and faculties of administration granted shall also be rendered ineffective, with the consequent prohibition to carry out acts of disposition or administration of assets or securities of the entity. If such acts of administration or disposition are carried out, they shall be null and void by operation of law. From the date of the intervention resolution, the annotation or registration in public registries of acts carried out by the directors, members of the boards of administration and surveillance, trustees, internal auditors, surveillance inspectors, administrators, managers and general attorneys-in-fact of the intervened entity shall require, under penalty of nullity, prior authorization of the Intervener.

Article 514. (ATTRIBUTIONS OF THE INTERVENER). I. The general attributions of the Intervener are the following:

a) Take possession and assume the legal personality and legal representation of the intervened financial intermediation entity, as well as the competences that legally and statutorily correspond to the general shareholders' meetings, assemblies of partners or associates, and directive and administrative bodies of the entity.

b) Record in the financial statements of the intervened entity the write-offs, reserves, provisions and other adjustments determined by the Financial System Supervision Authority - ASFI that were pending as of the date the intervention resolution was issued.

c) Execute the functions and attributions that correspond to it within the resolution procedure, the liquidation process with deposit insurance or the forced judicial liquidation in accordance with the provisions of this Law, the intervention resolution and those assigned by the Financial System Supervision Authority - ASFI.

d) Pay the expenses of the intervention charged to the assets of the intervened entity. The following shall be considered intervention expenses:

1. Social benefits of the employees of the intervened entity, calculated in accordance with the official payrolls submitted to the Ministry of Labor, Employment and Social Security.

2. Remuneration of employees of the intervened entity and of the Intervener.

3. General operating expenses.

4. Expenses to carry out the transfer of privileged obligations and assets in the execution of the resolution procedure or liquidation process with deposit insurance, as well as expenses for the constitution of the trusts referred to in Articles 541 and 543 of this Law.

5. Other expenses that must be incurred to successfully complete the intervention.

II. The Intervener shall be hired under the regime of the General Labor Law and shall have a monthly remuneration in accordance with the salary levels of general managers of state financial entities or entities with majority state participation, charged to the resources of the intervened entity.

CHAPTER IV OF THE SAVER PROTECTION FUND

Article 515. (CONSTITUTION AND PURPOSE OF THE SAVER PROTECTION FUND).

I. The Saver Protection Fund is a legal entity under public law, with a single purpose, of indefinite duration, with legal personality and its own assets, with autonomy of administrative, technical and financial management and regulatory powers of an internal nature, governed by this Law and the provisions established in its bylaws.

II. Within the scope indicated by this Law, the Saver Protection Fund has the purpose of protecting the savings of natural and legal persons deposited in financial intermediation entities, through support for resolution procedures and through the repayment of insured deposits of entities subject to liquidation processes with deposit insurance, deepening public confidence in the financial system and favoring the stability and solvency of the Bolivian financial system.

Article 516. (FUNCTIONS OF THE SAVER PROTECTION FUND).

I. To fulfill its purpose, the Saver Protection Fund shall perform the following functions:

a) Support the resolution procedures of financial intermediation entities intervened by the Financial System Supervision Authority - ASFI, within the framework of the provisions of Title IX Chapter V of this Law, according to the mechanisms stipulated in Article 531 of this Law.

b) The total support of the Saver Protection Fund may not exceed thirty percent (30%) of the privileged obligations of the intervened financial intermediation entity.

c) Establish and operate a deposit insurance for the deposits that natural and legal persons maintain in the financial

intermediation entities intervened and subject to forced judicial liquidation, in accordance with the scope established in this Law.

II. The Board of Directors of the Saver Protection Fund shall regulate the operations for the calculation and distribution of resources in the development of these functions, taking into account the proportional allocation of expenses derived from the administration of the resources and their application in compliance with the functions established in this Article.

Article 517. (ASSETS OF THE SAVER PROTECTION FUND). The assets of the Saver Protection Fund shall consist of the following resources:

a) The resources accumulated in the Financial Restructuring Fund created by Law No. 2297 of 20 December 2001, which amends Law No. 1488, which shall be transferred in their entirety to the Saver Protection Fund within sixty (60) days following the entry into force of this Law.

b) The contributions of the financial intermediation entities authorized by the Financial System Supervision Authority - ASFI, in accordance with the provisions established in Article 518 below.

c) The recoveries arising from support for resolution procedures or from the subrogation of rights in forced judicial liquidation processes, in accordance with the provisions of Article 539 of this Law.

d) The net return on investments of the resources of the Saver Protection Fund under the terms indicated in Article 520 of this Law.

e) Other resources from donations or definitive transfers made by private or public organizations and institutions, national or foreign, duly formalized.

Article 518. (CONTRIBUTIONS OF FINANCIAL INTERMEDIATION ENTITIES).

I. The financial intermediation entities authorized by the Financial System Supervision Authority - ASFI are obliged to make contributions to the Saver Protection Fund, in the amounts corresponding to the total amounts of the deposits they administer, subject to the procedures established by this Law and the specific regulations issued for that purpose by the Executive Branch through Supreme Decree.

II. The contribution amounts of the financial intermediation entities shall be quarterly based on the average daily balance of obligations to the public of the previous quarter, recorded in their financial statements. The quarterly contribution rate shall be equal to one point twenty-five per thousand (1.25 ‰).

III. The contribution rate may be increased, but not decreased, by the Executive Branch through Supreme Decree.

IV. The Central Bank of Bolivia - BCB shall automatically debit the contributions of the financial intermediation entities from the accounts opened by said entities at the issuing entity.

V. The contributions to the Saver Protection Fund are expenses for the financial intermediation entities and shall be recorded as such in their financial statements.

Article 519. (TEMPORARY SUSPENSION OF CONTRIBUTIONS).

I. In the event that the balance of the investments of the Saver Protection Fund referred to in Article 520 of this Law exceeds five percent (5%) of the total amount of public deposits in the financial intermediation system, the Board of Directors of the Fund may temporarily suspend the obligation of the financial intermediation entities to make the contributions mentioned in Article 518 above, unless the resources of the Saver Protection Fund are committed by resolution or liquidation procedures with deposit insurance. The suspension shall have a temporary duration as long as the circumstances that motivated it prevail, and shall be applied by express resolution of the board of directors of the Saver Protection Fund, which shall indicate the period of validity computable from the quarter following the date of its issuance.

II. Financial intermediation entities newly created or incorporated into the supervision scope of the Financial System Supervisory Authority - ASFI after the enactment of this Law may only avail themselves of this benefit if they have made at least two years of contributions.

Article 520. (INVESTMENT OF THE RESOURCES OF THE SAVINGS PROTECTION FUND). The resources of the Savings Protection Fund, as long as they are not committed to fulfilling the functions established in Article 516 of this Law, shall be invested by the Central Bank of Bolivia - BCB in securities or financial operations analogous to those carried out in the management of the Liquid Assets Requirement Fund - Fondo RAL. The Board of the Savings Protection Fund shall annually evaluate the results of these investments in order to determine adjustments to the investment policies.

Article 521. (NON-ATTACHABILITY OF THE RESOURCES OF THE SAVINGS PROTECTION FUND). The resources of the Savings Protection Fund may not be attached or subject to precautionary measures, nor be the object of any set-off or settlement. Their use is restricted solely to the fulfillment of its functions according to the scope provided for in this Law, and the administrative expenses arising therefrom.

Article 522. (OPERATIONAL INFRASTRUCTURE).

I. The Central Bank of Bolivia - BCB shall facilitate the operational infrastructure for the development of the activities of the Savings Protection Fund through the use of its facilities.

II. The resources of the Savings Protection Fund may not be allocated for investment in fixed assets nor to cover expenses for the hiring of offices and facilities.

Article 523. (BOARD OF THE SAVINGS PROTECTION FUND). I.

For its operation, the Savings Protection Fund shall be directed by a board, responsible for defining its administrative, operational and financial policies, composed of the following members:

a) The Minister or Minister of Economy and Public Finance, who shall exercise the functions of Chairperson, and may delegate their representation in exceptional cases to the Vice Minister or Vice Minister of Pensions and Financial Services.

b) The Chairperson of the Central Bank of Bolivia - BCB.

c) The Executive Director of the Financial System Supervisory Authority - ASFI.

II. The Board of the Savings Protection Fund has the following powers:

a) To approve and modify the internal policies of the Savings Protection Fund for the development of its activities and the fulfillment of its functions.

b) To attend to requests for financial support made by the Financial System Supervisory Authority - ASFI, in accordance with the provisions of

Article 531 of this Law, without the need for an additional administrative act regarding such requests.

c) To attend to disbursement requests to proceed with the return of the insured amount for the deposits indicated in Article 536 of this Law, in accordance with the report received from the Interventor.

d) To determine the temporary suspension of contributions when the conditions indicated in Article 519 of this Law are met.

e) To sign contracts with the General Treasury of the State - TGE and approve the terms and conditions for making reimbursements of the financing obtained for the fulfillment of the functions of the Savings Protection Fund, in accordance with Article 525 of this Law.

f) To contract trusts in order to realize the assets resulting from judicial forced solution or liquidation procedures.

g) To approve the financial statements and the annual budget of the Savings Protection Fund, the latter within the provisions of Article 522 of this Law.

h) To authorize the contracting of lines of financing for the fulfillment of the functions of the Savings Protection Fund, under the terms provided in Article 526 of this Law.

i) To approve, modify and interpret the Organic Statute and internal regulations of the Savings Protection Fund, as well as the internal regulations of the management and operation systems according to its needs for the fulfillment of its functions.

j) To carry out all those acts and operations that are generally necessary for the fulfillment of the functions of the Savings Protection Fund.

III. The board shall exercise the legal representation of the Savings Protection Fund.

IV. The specific powers of the Chairperson of the Board of the Savings Protection Fund shall be established in the Fund's Statutes and the Internal Regulations issued by the Board, in strict adherence to the scope established in this Law.

V. An executive of the Central Bank of Bolivia - BCB shall exercise the functions of Secretary of the Board of the Savings Protection Fund, who may participate in board meetings without the right to vote.

Article 524. (ADVANCED CONTRIBUTIONS). When the Savings Protection Fund does not have sufficient resources to meet the obligations arising from the fulfillment of its purpose, in circumstances of systemic risk and threat to the stability of the financial system, the board of the Savings Protection Fund has the power to require financial intermediation entities to make advanced contributions to the fund, and such contributions may not exceed in one year fifty percent (50%) of the contribution rate corresponding to the contributions of each financial intermediation entity.

Article 525. (FINANCING OF THE GENERAL TREASURY OF THE STATE).

Only in situations of insufficient resources of the Saver Protection Fund, after the advance contributions referred to in Article 524 of this Law have been applied, the Central Bank of Bolivia - BCB shall provide resources on behalf of the General Treasury of the State. The reimbursement of these resources shall be made under the conditions agreed upon by the Board of the Saver Protection Fund and the General Treasury of the State, charged against the future contributions made by Financial Intermediation Entities. These conditions shall determine the reimbursement of resources from the General Treasury of the State to the Central Bank of Bolivia within a term not exceeding five (5) years.

Article 526. (OTHER FINANCING). The Board of the Saver Protection Fund is authorized to approve and manage other resources through financing mechanisms recognized by the current legal framework, solely in situations of systemic need, having resorted to the additional contributions under the terms of Article 524 of this Law and the resources still being insufficient to fulfill its purpose.

Article 527. (CONFIDENTIALITY OF INFORMATION).

I. The provisions contained in Article 464 of this Law apply to the members of the Board of the Saver Protection Fund as well as to the officials of the Financial System Supervisory Authority, the Central Bank of Bolivia and the Ministry of Economy and Public Finance, with respect to the operations and matters pertaining to the Saver Protection Fund and the intervened financial intermediation entities, as well as with respect to the documents or reports related to the intervention processes that come to their knowledge in the exercise of their functions. This obligation shall extend even after they have ceased to hold their positions.

II. The confidentiality of information established in this Article shall not apply to the reports referred to in Article 529 of this Law, nor to that of an administrative nature or the declarations requested by a competent judge within judicial proceedings.

Article 528. (NON-APPLICATION OF THE GOVERNMENT CONTROL SYSTEM).

I. The resources of the Saver Protection Fund, as well as the policies approved by the board for the operational management of such resources, shall not be subject to oversight by the Comptroller General of the State, as they are not included within the provisions of Article 3 of Law No. 1178 dated 20 July 1990.

II. Unless expressly established otherwise by Law, the rules that have been issued or shall be issued with general scope for the institutions of the national public administration, which result in limitations to the operational capacity or powers recognized to it by this Law, shall not apply to the Saver Protection Fund. Therefore, the Budgetary Administration Law, the financial laws and the Basic Norms of the Governmental Administration and Control Systems provided for by Law No. 1178 dated 20 July 1990 shall not apply to it.

III. The specific administration and operation systems of the Depositor Protection Fund may be designed and regulated by its board of directors, responding to the special nature of its functions. The resolutions of the Depositor Protection Fund shall be strictly subject to its statutes and to the internal regulations approved by its board of directors in accordance with this Law.

Article 529. (PRESENTATION OF REPORTS).

I. Quarterly, the Secretary of the Depositor Protection Fund shall present a report to the board of directors regarding the investment operations carried out with the fund's resources.

Based on said report, the Board of Directors of the Depositor Protection Fund shall send to the financial intermediation entities the statement of the Fund's investments.

II. At the close of each annual period, the report presented by the Secretary of the Depositor Protection Fund to the Board of Directors shall include financial statements duly audited by an external audit firm registered with the Financial System Supervision Authority - ASFI. A copy of the audited financial statements shall be sent by the Board of Directors of the Depositor Protection Fund to the President of the Plurinational State of Bolivia; it shall also send it to the President of the Plurinational Legislative Assembly, the Comptroller General of the State, the Minister of Economy and Public Finance, the President of the Central Bank of Bolivia - BCB, the Executive Director of the Financial System Supervision Authority - ASFI and the presidents of the boards of directors or of the boards of administration of the financial intermediation entities.

CHAPTER V RESOLUTION PROCEDURE

Article 530. (RESOLUTION PROCEDURE).

I. For the purposes of this Law, resolution procedure means that intended to protect the public's deposits and other privileged obligations, subsequent to the intervention and prior to the revocation of the operating license of the intervened financial intermediation entity.

II. Once the liquid reserves to cover the estimated expenses of the intervention have been constituted in accordance with the provisions of Subsection d of Article 514 of this Law, the resolution procedure shall consist of the acts of the Financial System Supervision Authority - ASFI intended to:

a) Exclude the first and second order privileged obligations recorded in the financial statements of the intervened entity, as provided in

Article 533 of this Law.

b) Exclude the assets of the intervened entity for an amount equivalent to the first and second order privileged obligations. Assets shall be excluded according to their book value, net of provisions, reserves and any other adjustment made in accordance with Subsection b of Article 514 of this Law.

c) Instruct the Intervenor to formalize the transfer of first-order privileged obligations in favor of financial intermediation entities, which shall receive in exchange the assets referred to in Subsection b) above and/or first-order participations in the trust indicated in Subsection d below.

d) Instruct the Intervenor to formalize the transfer of the assets indicated in Subsection b) above in favor of financial intermediation entities or to a trust with the characteristics indicated in Article 541 of this Law.

e) Determine the financial intermediation entities awarded the assets and obligations referred to in the preceding subsections, as well as, where applicable, the administering entity of the trust.

Article 531. (SUPPORT MECHANISMS OF THE SAVER PROTECTION FUND).

I. In order to successfully carry out the resolution procedure and enable the transfers indicated above, the Saver Protection Fund shall support with one or a combination of the following mechanisms, at the discretion of the Financial System Supervision Authority - ASFI:

a) In the case of direct transfer of the assets of the intervened entity in favor of financial intermediation entities in accordance with subsection c of

Article 530 of this Law, the Saver Protection Fund shall constitute a guarantee of up to twenty percent (20%) of the value of the transferred assets.

b) Contributions in cash or bonds to the trust indicated in Subsection d of Article 530 of this Law, in exchange for a second-order participation therein.

c) Firm purchase of the first-order participations mentioned in Subsection c of Article 530 of this Law.

II. The total contribution of the Saver Protection Fund may not exceed thirty percent (30%) of the privileged obligations of the intervened financial intermediation entity.

III. Additionally and for the purpose of supporting the resolution procedure, at the request of the Financial System Supervision Authority - ASFI, public entities holding second-order privileged obligations shall assume second-order participations in the trust indicated in Subsection d of Article 530 of this Law. In this case, the amount of the trust's assets shall be increased by the value of these participations.

Article 532. (ADJUSTMENT SCHEDULES AND INCENTIVE MECHANISMS).

To facilitate for the acquiring entities, within resolution processes, the absorption of the impact entailed by the acquisition of assets and the assumption of liabilities, the Financial System Supervision Authority - ASFI is empowered to establish adjustment schedules and lower risk-weighting coefficients for the participations in the trust, the transferred assets and the trust for the purpose of calculating the capital adequacy ratio of the acquiring entities and of the trust's administering entity, as the case may be; likewise, the Central Bank of Bolivia - BCB may make its legal reserve policy more flexible and shall facilitate liquidity windows with respect to these entities.

Article 533. (PRIVILEGED OBLIGATIONS). For purposes of the resolution procedure, without implying an order of priority among those of its rank, the privileged obligations recorded in the financial statements of the intervened entity as of the date the intervention resolution is issued are:

a) First order:

1. Deposits of the private sector in current account, demand, savings account and fixed term, excluding operations with other financial intermediaries and deposits constituted in violation of legal or regulatory provisions.

2. Cash mandates, including foreign trade prepayments, tax collections and withholdings, drafts, transfers with legally executed contracts, duly documented and recorded in the financial statements of the intervened entity before its intervention, provided that the holder is from the private sector.

3. Judicial deposits.

b) Second order:

1. Deposits of the public sector in current account, demand, savings account and fixed term.

2. Obligations with the Central Bank of Bolivia - BCB.

3. Obligations with foreign financial intermediation entities.

4. Obligations with State financial entities or financial entities with majority State participation, excepting subordinated obligations contracted with the intervened financial intermediation entity, which shall be resolved according to the forced judicial liquidation procedure contained in

Chapter VII of this Title.

5. Tax obligations of the intervened financial intermediation entity, incurred by the entity up to the moment of its intervention. Penalties or fines arising from the provision of services are not included, which shall be resolved within the forced judicial liquidation procedure contained in Chapter VII of this Title.

Article 534. (SELECTION OF FINANCIAL INTERMEDIATION ENTITIES PARTICIPATING IN THE RESOLUTION PROCEDURE). The selection of the financial intermediation entities participating in the resolution procedure shall be carried out exclusively subject to the following:

a) The Financial System Supervision Authority - ASFI shall convene an informative meeting by any means with a minimum of three (3) financial intermediation entities.

b) At the informative meeting, the Financial System Supervision Authority

• ASFI shall explain to the attending financial intermediation entities the content of the intervention resolution and shall provide to the entities that express interest the information necessary for them to submit their proposals within a period of forty-eight (48) hours.

c) The award shall be made in the same act of receipt and opening of proposals, by a committee composed of a representative of the Ministry of Economy and Public Finance, a representative of the Central Bank of Bolivia - BCB and a representative of the Authority of Supervision of the Financial

System - ASFI, considering competitive methods established in the information provided above.

CHAPTER VI LIQUIDATION PROCESS WITH DEPOSIT INSURANCE

Article 535. (LIQUIDATION PROCESS WITH DEPOSIT INSURANCE).

I. When the Report of the Authority of Supervision of the Financial System - ASFI determines that the resources required for the execution of the resolution procedure, under the terms set forth in Chapter V of this Title, exceed thirty percent (30%) of the privileged liabilities, the Authority of Supervision of the Financial System - ASFI shall order the application to the intervened financial intermediation entity of the liquidation process with deposit insurance.

II. The liquidation process with deposit insurance shall consist of the acts of the Authority of Supervision of the Financial System - ASFI aimed at:

a) Excluding the insured deposits recorded in the financial statements of the intervened entity, as set forth in Article 533 of this Law.

b) Excluding the assets of the intervened entity for an amount equivalent to the deposits excluded pursuant to Subsection a above. The assets shall be excluded according to their book value, net of provisions, reserves and any other adjustment made in accordance with Subsection b of Article 514 of this Law.

c) Instructing the Interventor to formalize the transfer of the insured deposits and assets excluded from the financial statements of the intervened financial intermediation entity, in favor of a trust with the characteristics set forth in Article 541 of this Law. The Depositor Protection Fund shall receive in exchange for the funds it allocates to cover the deposit insurance, first-order participations in said trust.

d) Instructing the Interventor to perform the calculation of the deposit insurance coverage, according to the scope of Article 536 of this Law, for its remission together with the detail of the holders of the insured deposits to the Depositor Protection Fund.

III. The deposit insurance is under the regulatory scope of this Law and its regulations, and therefore shall not be subject to regulation or supervision by the Authority of Supervision and Control of Pensions and Insurance.

Article 536. (INSURED DEPOSITS). The deposit insurance coverage shall be effective as follows:

a) The public's demand deposits, savings accounts and fixed-term deposits, recorded in the financial statements of the financial intermediation entities as of the date of their intervention, are insured by the Depositor Protection Fund, except those detailed below:

1. Deposits held by national or foreign financial intermediation entities.

2. Deposits held by complementary financial services companies and financial companies of the securities sector, under the supervision of the Authority of Supervision of the Financial System - ASFI.

3. Deposits held by financial companies under the supervision of the Authority of Supervision and Control of Pensions and Insurance.

4. Deposits held by State financial entities or entities with majority State participation.

5. Bearer fixed-term deposits.

6. Deposits that guarantee other operations in the same financial intermediation entity.

7. Deposits constituted in violation of legal and regulatory norms.

8. Deposits in branches or subsidiaries abroad of national financial intermediation entities.

9. Deposits in checking accounts with "payable-through" checks.

b) Insured deposits include only the principal balance, recorded in the financial statements of the financial intermediation entity as of the date of its intervention by the Authority of Supervision of the Financial System - ASFI.

c) In the case of deposits constituted in the name of two or more persons, the maximum amount guaranteed per account shall be distributed pro rata among the holders, and may not exceed the guarantee limit per holder or beneficiary.

In no case may the same person, individual or collective, enjoy a guarantee greater than the maximum amount set forth in Article 537 of this Law.

Article 537. (MAXIMUM DEPOSIT INSURANCE COVERAGE). The maximum amount of deposit insurance coverage per beneficiary is UFV40,000.- (Forty Thousand Housing Development Units), whatever the number of deposit accounts held by the same person, the type of deposits, or the currency in which they were constituted. Deposits exceeding the coverage amount are not covered by deposit insurance.

Article 538. (RETURN OF INSURED DEPOSITS).

I. To make effective the return of deposits, the Interventor of the intervened financial intermediation entity shall calculate the amount of insured deposits according to the provisions of Article 536 of this Law, sending said calculation together with the detail of the holders of each deposit account to the Depositor Protection Fund, within a maximum period of ten (10) calendar days from the date on which the decision to apply the liquidation process with deposit insurance to the intervened entity was taken.

II. The return of deposits insured by the Depositor Protection Fund shall be made in national currency, respecting the equivalences according to official exchange rates on the date of return for deposits constituted in foreign currencies.

III. The Depositor Protection Fund may contract the services of financial intermediation entities in order to proceed with the return of the amounts of insured deposits. The start date and the operational procedures for the return of deposits and customer service shall be determined in regulations approved by the Board of Directors of the Depositor Protection Fund.

IV. The total amount of the returns of deposits insured by the Depositor Protection Fund, in accordance with the provisions of this article, shall be excluded from the amount of claims for judicial forced liquidation submitted to the judge hearing the case.

Article 539. (SUBROGATION OF RIGHTS). The Depositor Protection Fund shall be subrogated to the rights of the depositors for the amount paid by the intervened financial intermediation entity, in accordance with the detail submitted by the intervenor. The collection rights of the claims of the Depositor Protection Fund derived from the subrogation of the rights of the depositors to whom the return of their deposits was made effective shall enjoy the same privileges corresponding to said depositors, the document evidencing the referred payment being sufficient title.

Article 540. (PRESCRIPTION OF DEPOSIT INSURANCE).

I. The deposit insurance of the Depositor Protection Fund, for deposits whose holders have not made effective the collection of the insured amounts, within the fatal and peremptory term of one hundred eighty (180) calendar days, computable from the date of initiation of the returns, shall prescribe in favor of the Depositor Protection Fund.

II. The amounts not covered by the Depositor Protection Fund shall have the same treatment as uninsured deposits within the judicial forced liquidation process.

Article 541. (TRUST FOR RESOLUTION OR LIQUIDATION PROCEEDING WITH DEPOSIT INSURANCE).

I. For the implementation of the resolution proceeding provided in Title IX, Chapter V or the liquidation process with deposit insurance provided in this Chapter, the Financial System Supervision Authority - ASFI shall constitute a trust with assets and liabilities excluded from the financial statements of the intervened financial intermediation entity. The transfers of assets and liabilities excluded to the trust shall be non-reclaimable.

II. The trust shall issue participations that may be of various categories, conferring different rights to their holders. The trust shall only be contestable by the Financial System Supervision Authority - ASFI, the beneficiaries or the trustee. This trust shall be constituted by means of a standard contract prepared by the Financial System Supervision Authority - ASFI and shall be governed by the provisions of Title VII,

Chapter IV, Section III of the Commercial Code, with the following characteristics:

a) The object of the trust is the administration, in its broadest terms, of the autonomous patrimony constituted by the assets and liabilities excluded from the financial statements of the intervened financial intermediation entity, to pay the participations issued by said trust.

b) The constitution of the trust shall be instrumented by means of a public deed granted by a Notary Public, and the transfers to the trust shall be registered in the corresponding public registries in accordance with current legal norms, the presentation of the trust constitution contract being sufficient for registration. In the event that the trust includes assets and guarantees subject to registration, the corresponding registrations or annotations shall not alter the original preference that corresponded to the trustor. In these registrations or annotations, the rate or tariff provided for contracts without amount shall be applied.

c) For the constitution of the trust, the designation of the trustee shall be made by the Executive Director of the Financial System Supervision Authority - ASFI.

d) The beneficiaries of the trust are the holders of the participations who receive them in consideration, or for having assumed first-order privileged obligations or being holders of second-order privileged obligations, or by the subrogation of rights for the return of deposits for the coverage of deposit insurance. The rights and obligations that the Commercial Code attributes to the trustor shall correspond exclusively to the beneficiaries. The beneficiaries may transfer, pledge and carry out any act of dominion over these participations only with other financial intermediation entities and with the Depositor Protection Fund. The issuance and negotiation of these participations shall not be governed by the Securities Market Law.

e) For the purposes of Article 1415, Numeral 4 of the Commercial Code, the competent administrative authority shall be the Financial System Supervision Authority.

f) The remuneration of the trustee shall be determined in the constitutive contract and shall be made effective against the autonomous patrimony, with preference to the payment of the participations.

g) The trustee at the end of its management shall issue a final report to the beneficiaries.

Article 542. (TRANSFER OF ASSETS, LIABILITIES AND CONTINGENTS).

I. The transfers of assets and liabilities excluded from the financial statements of the intervened financial intermediation entity, during the resolution proceeding or the liquidation process with deposit insurance, are non-reclaimable. The shareholders, partners or associates and creditors of the intervened financial intermediation entity shall have no action or right whatsoever against the acquirers of the excluded assets.

II. The acts authorized, entrusted or ordered by the Financial System Supervision Authority - ASFI and the Interventor within the framework of this Law, in relation to the transfer of assets and liabilities of the intervened entity, do not require any judicial authorization, nor can they be deemed ineffective with respect to the creditors of the intervened entity. No judicial sentence or administrative resolution shall suspend the acts carried out during the intervention.

III. No acts of disposal such as embargoes or precautionary measures of any kind may be carried out on part or all of the assets of the intervened entity until the revocation of its operating license, with the exception of the

transfer of assets ordered by the Financial System Supervision Authority

• ASFI and the operations carried out by the interventor.

IV. The transfers of assets, liabilities and contingents of the intervened financial intermediation entity shall not require the consent of the debtors, creditors or any holders, entailing full and irrevocable transmissions for all legal purposes. These transfers produce full effects of transmission of obligations and rights.

V. The documents of transfer of assets, liabilities and contingents, signed with natural or legal persons including those of the Plurinational State, shall be protocolized before a Notary Public.

VI. The transfers of assets, liabilities or contingents of the intervened financial intermediation entity for liquidation purposes are exempt from the payment of the transactions tax.

VII. The transfers of assets and liabilities shall be registered in the corresponding public registries in accordance with current legal norms, and the presentation of the respective contract shall be sufficient to carry out the registration or annotation. In the event that the transfer includes goods and guarantees subject to registration, the corresponding registrations or annotations shall not alter the original preference that corresponded to the transferor. In these registrations or annotations, the rate or tariff provided for contracts without amount shall be applied.

VIII. The guarantees and sureties granted by the intervened financial intermediation entity shall be resolved by operation of law as of the intervention resolution in application of the provisions of the first paragraph of Article 924 of the Civil Code, with the return of the commission for the unused period and the assignment of the counter-guarantees in favor of the beneficiary. Likewise, the guarantees granted in favor of the Central Bank of Bolivia - BCB, with the exception of repo operations and those constituted with the Fondo-RAL, shall be resolved by operation of law as of the intervention resolution.

Article 543. (TRUST FOR JUDICIAL FORCED LIQUIDATION). With the residual balance sheet of the intervened financial intermediation entity, made up of the assets and liabilities not excluded in the resolution procedure or the liquidation process with deposit insurance, after deducting the intervention expenses, the Interventor shall form a trust for liquidation that shall be governed by the same rules for the judicial forced liquidation procedure established in Chapter VII of this Title. With the formation of the trust for judicial forced liquidation, the resolution procedure or the liquidation process with deposit insurance shall be concluded, and the Financial System Supervision Authority - ASFI shall proceed with the revocation of the operating license of the intervened financial intermediation entity.

CHAPTER VII JUDICIAL FORCED LIQUIDATION

Article 544. (JUDICIAL FORCED LIQUIDATION).

I. For the purposes of this Law, the judicial forced liquidation of financial intermediation entities shall be requested from the district judge of the domicile of the intervened financial intermediation entity by the Financial System Supervision Authority - ASFI with the intervention resolution and the revocation of the operating license. The judicial forced liquidation shall be governed by the provisions of the Commercial Code relating to the bankruptcy procedure with the specialities provided in this Law.

II. For the purpose of judicial forced liquidation, the interventor shall proceed to transfer all the assets recorded in the financial statements of the financial intermediation entity as of the date of its intervention in favor of a trust for judicial forced liquidation. The transfers of assets to the trust shall be irrevocable. The trust shall only be contestable by the Financial System Supervision Authority - ASFI, the beneficiaries or the trustee. The interventor shall deliver to the trust management entity the segregated assets recorded in memorandum accounts, for their return in accordance with the provisions of Article 546 of this Law.

Article 545. (TRUST FOR JUDICIAL FORCED LIQUIDATION).

I. The trust indicated in the preceding Article shall be instrumented through a standard contract prepared by the Financial System Supervision Authority - ASFI and shall be governed by the provisions of Title VII, Chapter IV, Section III of the Commercial Code, with the specifications indicated in this Article and the following:

a) The object of the trust shall be the administration, collection, realization of assets and expectant rights, so that with the assets or the product of this trust the credits pending payment are honored in accordance with the resolution of priorities issued by the district judge in compliance with Article 548 of this Law.

b) The constitution of the trust shall be instrumented by public deed granted by a Notary of Public Faith, and the transfers to the trust shall be registered in the corresponding public registries in accordance with current legal norms, the presentation of the trust constitution contract being sufficient for registration. In the event that the trust includes assets and guarantees subject to registration, the corresponding registrations or annotations shall not alter the original preference that corresponded to the settlor. In these registrations or annotations, the fee or tariff provided for contracts without a specified amount shall apply.

c) For the establishment of the trust, the designation of the trustee shall be made by the Executive Director (female) or Executive Director (male) of the Financial System Supervisory Authority - ASFI.

d) The beneficiaries of the trust are the holders of the claims in the order of the ruling on degrees and preferences issued by the district judge hearing the case. The rights and obligations that the Commercial Code attributes to the settlor shall correspond exclusively to the beneficiaries.

e) For the purposes of Article 1415, Number 4 of the Commercial Code, the competent administrative authority shall be the Financial System Supervisory Authority - ASFI.

f) The trustee's remuneration shall be determined in the constitutive contract and shall be made effective at the expense of the autonomous estate, with preference over the payment of the claims. The receiver may prepay up to one (1)

year of the trustee's remuneration based on the quality of the assets to be administered.

g) The delivery of the assets to the trustee shall be carried out through inventories prepared by the Receiver with notarial intervention, in which the condition and the documentation available are certified.

h) The trustee, at the end of its management, shall issue a final report to the beneficiaries.

II. The trustee is responsible for the administration of the assets and for paying the beneficiaries in the manner provided in Articles 547 and 548 of this Law; consequently, the designation of a receiver is not applicable.

Article 546. (PUBLIC NOTIFICATIONS OF THE TRUSTEE).

I. The trustee shall publicly notify all those who hold in their possession goods or securities of the intervened financial intermediary institution for their return within a period not exceeding thirty (30) calendar days, counted from the public notification.

In the event that the goods or securities are not returned, the trustee shall report such situation to the district judge hearing the case so that he/she may forward the proceedings to the Public Prosecutor's Office to promote the criminal action in accordance with the provisions of

Article 225 of the Political Constitution of the State.

II. The trustee shall publicly notify so that every owner of goods or securities left in custody, safe deposit boxes, trusts, securities in collection, or segregated assets with legally subscribed contracts, duly documented and registered in the financial statements of the financial intermediary institution prior to its intervention, withdraws their goods within thirty (30) calendar days, counted from the public notification. In the event of the non-existence of such goods or securities, the trustee shall inform the district judge hearing the case so that he/she may forward the proceedings to the Public Prosecutor's Office to promote the criminal action in accordance with Article 225 of the Political Constitution of the State.

Article 547. (FORWARDING OF CLAIMS PENDING PAYMENT). Once the delivery of the assets to the trustee has been completed, the Receiver shall forward the list of claims pending payment in accordance with the financial statements as of the date of intervention of the intervened financial intermediary institution and the trust contract to the district judge hearing the case, who shall be responsible for ensuring compliance with the trust contract and shall not have the power to modify or alter the terms and scope of said contract. From that moment on, all powers and attributions of the Financial System Supervisory Authority - ASFI and the Receiver over those assets, as well as regarding the trust contract, cease.

Article 548. (RESOLUTION ON PRIORITIES).

I. The district judge, within a period of five (5) business days from receipt of the list of claims pending payment, shall issue the resolution on priorities, which shall strictly follow the order below:

a) Cash mandates, including foreign trade prepayments, tax collections and withholdings, drafts, transfers with legally subscribed contracts, duly documented and registered in the financial statements of the intervened financial intermediary institution prior to its intervention, provided that the holder is from the private sector.

b) Private sector deposits in current accounts, demand deposits, savings accounts, and fixed-term deposits, excluding operations with other financial intermediaries.

c) Judicial deposits.

d) Mortgage certificates.

e) Public sector deposits in current accounts, demand deposits, savings accounts, and fixed-term deposits.

f) Obligations with the Central Bank of Bolivia - BCB.

g) Obligations with State financial entities or with majority State participation, excluding contracted subordinated obligations.

h) Tax obligations of the intervened financial intermediary institution incurred up to the date of the institution's intervention.

i) Fines and penalties incurred for non-compliance with contracts subscribed with institutions of the Plurinational State of Bolivia.

j) Capital balances of credits and loans in general in favor of the intervened financial intermediary institution, including credits received from financial entities or other types of institutions or private individual or collective persons.

k) Capital balances of other contractual claims.

l) Cashier's checks and others drawn by the intervened financial intermediary institution.

m) Other accounts payable.

n) Accrued unpaid interest.

o) Judicial, administrative, operational contingencies or obligations arising as a consequence of rulings of judicial actions pending as of the date of commencement of the intervention, as well as the deposits excluded in the settlement agreement procedure in accordance with the terms of the judgment that has become final and binding.

p) Subordinated obligations and mandatorily convertible bonds into shares, including those subscribed with State financial institutions or entities or with majority State participation in the capital.

q) Shares or contribution certificates.

II. The district judge within the twenty-four (24) hours following the finalization of the resolution of priorities shall instruct the trustee to pay the beneficiaries of the trust in the order established by said resolution and in accordance with the procedure set forth in the following Article.

Article 549. (TIME LIMITS AND EXERCISE OF PRIORITIES).

I. The trustee, within the term of five (5) calendar days from receipt of the instruction from the district judge, shall publish the resolution of priorities in three (3) media outlets of national circulation. At the same time, the trustee shall summon in writing or by means of

publication the beneficiaries of the first level of priority to appear within a term of ten (10) calendar days at the place and time indicated, so that, with the intervention of a Notary of Public Faith, they may be informed that they can exercise their rights as creditors through their notarial attorney in the manner provided for in this Article and the value of the trust assets for the payment of their claims.

II. For the purposes of payment of claims, the value of each trust asset shall be the result of multiplying the nominal value of the asset by the ratio of the total claims to the nominal value of the total trust assets. If the nominal value of the total trust assets were less than the total claims, the value of each asset shall correspond to its nominal value, in which case the application of Article 550 of this Law shall apply.

III. Within the term of five (5) calendar days from the holding of the meeting, the beneficiaries shall accredit a notarial attorney before the trustee with full decision-making powers to exercise their rights in relation to the payment of the capital amount of their claims with the trust assets to be chosen by the attorney.

IV. The notarial attorney, within the term of fifteen (15) calendar days from his accreditation, shall proceed to select and receive from the trustee the trust assets for the total amount of the capital of the claims he represents, which shall be transferred in his favor.

From that moment on, the notarial attorney is responsible for the form and distribution of those assets to his principals, the trustee's responsibility with respect to those assets ceasing.

V. In the event that the beneficiaries do not accredit their notarial attorney or that he does not exercise his right of asset selection within the terms indicated, the beneficiaries shall lose their degree and shall automatically pass to the last level of the resolution of priorities.

VI. If assets remain in the trust, within three (3) business days of the completion of the selection of assets by the notarial attorney of the previous priority level, the trustee shall convene the beneficiaries of the next priority level with the procedure and for the same purposes established in the preceding paragraphs, and so on successively with the beneficiaries of the following priority levels, until the total claims are paid or the trust assets are exhausted, whichever occurs first.

Article 550. (JUDICIAL ACTIONS AGAINST AUTHORS OF FRAUDULENT ADMINISTRATION).

I. If the assets are insufficient to pay the total claims, the partido judge shall open a sixty (60) calendar day evidentiary period to establish whether the administration of the intervened financial intermediation entity was fraudulent;

once the deadline expires, he shall issue a resolution qualifying the administration; this resolution shall only admit the appeal with devolutive effect, and the partido judge must refer the records to the Public Ministry, in accordance with the provisions of Article 109 of the Political Constitution of the State, so that it may promote the corresponding criminal action against the persons identified in the resolution issued by the judge.

II. Creditors who were not fully satisfied with the trust assets referred to in Article 549 above, as well as persons whose rights were not recorded in the financial statements of the intervened financial intermediation entity at the time of its intervention, shall retain the power to bring judicial actions personally for the unpaid amount of their claims or to demand compliance with the aforementioned rights, against those who are found to be authors of the aforementioned fraudulent administration.

Article 551. (CONCLUSION OF THE TRUST AND EXTINCTION OF LEGAL PERSONALITY OF THE INTERVENED ENTITY).

I. Once the procedure set forth in Article 549 of this Law is concluded, the trustee shall submit a final report with an external audit opinion on activities to the partido judge who issued the priority resolution. If from said report it is established that assets still remain in the trust, the partido judge shall order their delivery in favor of the shareholders and partners of the intervened financial intermediation entity and, in the event that it is a non-profit civil association, to a public university of the legal domicile of the intervened financial intermediation entity. With this act the trust contract shall be concluded, by virtue of which the partido judge shall order that the institution in charge of the commercial registry, or the National Directorate of Cooperatives under the Ministry of Labor, Employment and Social Security, or the departmental autonomous governments, as applicable, declare the extinction of the legal personality of the intervened financial intermediation entity.

II. The resolution of extinction of legal personality by the competent body must be issued within (5) business days following the order of the partido judge, notifying the National Tax Service, municipal autonomous governments and social security entities and others, for their removal from their registries.

III. The historical archives of the intervened financial intermediation entity shall remain in the possession of the Financial System Supervision Authority - ASFI, which shall include in its budget the necessary line items for their administration and custody.

SOLE ADDITIONAL PROVISION. The provisions that are mandatorily determined in this Law and its regulations, as well as those whose constitution the Financial System Supervision Authority - ASFI instructs a financial entity to establish based on supervision actions, shall be considered as deductible expenses for the computation of the Corporate Income Tax; the reversal of these provisions shall be considered as taxable income for the purposes of the settlement of the Corporate Income Tax.

FIRST TRANSITORY PROVISIONS. Savings and loan mutuals, within a period of up to two years computable from the entry into force of this Law, must transform into housing financial entities following the following criteria and procedures.

Seventy-five percent (75%) of the net equity of the savings and loan mutual shall be individualized in capital certificates of Bs.100.- (One Hundred Bolivianos) each (1) and shall be awarded in ownership equally and without any economic consideration to all members who register in savings account accounts an average balance in the last two (2)

years of Bs.700.- (Seven Hundred Bolivianos).

Holders of fixed-term deposits of amounts equal to or greater than the sum of Bs.700.- (Seven Hundred Bolivianos), who had a continuous permanence in the last two (2)

years, shall also be beneficiaries of the equal award of capital certificates of the new housing financial entity into which the savings and credit mutual shall be transformed.

The calculation of the average balance shall consider all savings account accounts of the natural person member, including fixed-term deposit accounts, whether in national or foreign currency. Legal persons are excluded from the award of capital certificates.

The determination of the proportional share of the net equity of the savings and credit mutual, as well as the number of beneficiaries among whom the participation certificates shall be awarded, must be made based on the financial statements and other records of the savings and credit mutual at the close of the month immediately preceding the month of the promulgation of this Law.

In the event that the equal award of capital certificates exceeds the concentration limit of zero point two percent (0.2%) per beneficiary, each of these, within a maximum period of one (1) year, must sell the certificates exceeding the established concentration limit. After said period, the housing financial entities must redeem all capital certificates of members exceeding the concentration limit.

For the determination of the number of capital certificates corresponding to each member, the quotient resulting from the division of the amount equivalent to seventy-five percent (75%) of the net equity and the number of eligible members shall be established. Said result shall in turn be divided by the nominal value of the contribution certificate, and the integer part of this quotient shall be the number of capital certificates corresponding to each member, and the decimal part shall become part of the non-distributable reserve of the housing financial entity.

The remaining twenty-five percent (25%) of the net equity of the savings and credit mutual shall remain in the entity under the concept of non-distributable reserve of the housing financial entity.

The transformation is mandatory in nature, and its process does not require consideration or approval by any governing body of the savings and loan mutuals.

With the transformation provided by this Law, the rights and obligations of the mutual association are not dissolved or altered. Administrative or judicial acts that may be filed by a creditor or member shall not constitute an impediment to the transformation.

The transformation must comply with the following requirements and formalities without these constituting an exhaustive and exclusive list of others necessary to achieve said legal provision:

1. Establish the list of members in accordance with the eligibility criteria required in this Law to meet such condition.

2. Preparation of the transformation balance sheet reflecting the new capital structure.

3. Publication of the transformation instrument once in a newspaper of wide local and national circulation.

4. Preparation of the draft adaptation of the bylaws based on the provisions established in this Law.

5. Accreditation of the members with the issuance of registered certificates representing their equal participation in the capital of the company.

The transformation process may be executed by the administration in office of the mutual associations without prejudice to the fulfillment of their corresponding duties. The Financial System Supervision Authority – ASFI shall regulate the process and supervise compliance with it. Likewise, the Financial System Supervision Authority – ASFI may replace the administrators when it notices non-compliances or unjustified delays attributable to the administrators.

The first general meeting of partners shall have the following powers:

1. Verify the equal distribution of capital among the partners.

2. Approve or reject the management and expenses made by the administrators, as well as the financial statements for the period during which the transformation process lasts.

3. Analyze and approve the bylaws.

4. Appoint the first directors and statutory auditors of the company.

5. Appoint two partners to sign the minutes of the general meeting.

6. Appoint the partners who will sign the public deed of transformation.

7. Consider and resolve any other matter of interest to the company.

The participation of the partners in the company's capital, while the transformation process lasts, may be evidenced by provisional certificates that must be replaced by definitive capital certificates once the transformation process is completed.

The acts and documents pertaining to the transformation must be registered in the Commercial Registry.

Any other aspect not contemplated regarding the transformation into housing financial entities shall be regulated by the Financial System Supervision Authority – ASFI.

SECOND. Private financial funds must convert into a multiple bank or a SME bank. The Financial System Supervision Authority – ASFI must regulate the process and adaptation period for such purpose.

THIRD. The Financial System Supervision Authority – ASFI and the financial entities shall, within one hundred eighty (180) days, as corresponds to each of them, implement the technological, regulatory and other means necessary for the recognition of borrowers who have a credit history of full and timely payment compliance, so that in their new loan operations they are granted lower interest rates or other more favorable credit conditions.

FOURTH. The Financial System Supervision Authority – ASFI shall adapt the operating licenses to the provisions of this Law, as well as regulate the terms and modalities of incorporation and/or dissolution for financial entities that do not yet have an operating license.

FIFTH. The intervention, dissolution, liquidation, closure and shutdown of corporate savings and credit cooperatives that do not have an operating license or that have not completed the adaptation process to the supervision scope, as well as the mechanisms for converting such entities into open savings and credit cooperatives, shall be regulated by the Financial System Supervision Authority – ASFI.

SIXTH. The Productive Development Bank – Mixed Public Limited Company (BDP – S.A.M.)

shall continue to exercise and carry out uninterruptedly all activities, functions, operations and obligations, with the commercial, financial, contractual, labor, tax, pension and any other relations that the latter has with public, private and/or mixed third parties, whether national or foreign, remaining unchanged and in force.

SEVENTH. Financial groups, in accordance with the provisions of this Law, must be formed or adapted within a period no greater than thirty (30) months, in accordance with regulations of the Financial System Supervision Authority – ASFI.

EIGHTH. This Law shall enter into force ninety (90) days after its enactment.

Until regulatory norms are issued, the norms issued under Law No. 1488 of 14 April 1993 shall be considered in force.

FINAL PROVISIONS FIRST. The Financial Investigations Unit - UIF, created by Law No. 1768 of 10 March 1997, must transform into a decentralized public entity under the trusteeship of the Ministry of Economy and Public Finance as established in Title VIII Chapter III of this Law.

The period for the transformation must not exceed one hundred eighty (180) calendar days.

SECOND. Within a period of ninety (90) calendar days from the date of publication of this Law, the bylaws of the Productive Development Bank - Mixed Public Limited Company (BDP – S.A.M.) must be adapted to the provisions of this Law.

THIRD. The Ministry of Economy and Public Finance shall be the instance of the central level of the State that exercises the exclusive competences of the State for the granting and registration of the legal personality of non-governmental organizations, foundations and non-profit civil entities with financial activity, created under the form of "Association or Foundation" that carry out their activities in more than one Department.

FOURTH. The Ministry of Economy and Public Finance shall be the instance of the central level of the State that exercises the competences for the granting and registration of the legal personality of communal financial entities and development financial institutions that carry out their activities in more than one department. When the activities of these financial entities are located only in one Department, such attributions shall be exercised by the departmental governments.

REPEALING PROVISIONS FIRST. Supreme Decree No. 28999 of 1 January 2007 is repealed in all that contradicts this Law.

SECOND. Chapter II "Nacional Financiera Boliviana S.A.M" of the

Title VI "Transfer of Functions" of Law No. 1670 of the Central Bank of Bolivia, of 31 October 1995, which contains Articles 84 and 85, is repealed.

THIRD. Chapter VI "Institutional Restructuring", Section I "NAFIBO SAM", containing Articles 47 to 57 of Law No. 2064 on Economic Reactivation, of 3 April 2000, is hereby repealed.

FOURTH. All provisions contrary to this Law are hereby repealed.

SOLE REPEALING PROVISION. Law No. 1488 on Banks and Financial Entities, of 14 April 1993, and all provisions contrary to this Law are hereby repealed.

Refer to the Executive Branch, for constitutional purposes.

Given in the Chamber of the Plurinational Legislative Assembly, on the fifth day of the month of August of the year two thousand thirteen.

Signed. Lilly Gabriela Montaño Viaña, Betty Asunta Tejada Soruco, Andrés Agustín Villca Daza, Marcelina Chávez Salazar, Marcelo Elío Chávez, Angel David Cortéz Villegas.

Therefore, I promulgate it so that it is held and complied with as Law of the Plurinational State of Bolivia.

Government Palace of the city of La Paz, on the twenty-first day of the month of August of the year two thousand thirteen.

SIGNED. EVO MORALES AYMA, David Choquehuanca Céspedes, Juan Ramón Quintana Taborga, Carlos Gustavo Romero Bonifaz, Elba Viviana Caro Hinojosa, Luis Alberto Arce Catacora, Ana Teresa Morales Olivera, Arturo Vladimir Sánchez Escobar, Cecilia Luisa Ayllon Quinteros, Daniel Santalla Torrez, Nemesia Achacollo Tola, Claudia Stacy Peña Claros, Nardy Suxo Iturry, Amanda Dávila Torres.

ANNEX TO LAW No. 393 GLOSSARY OF FINANCIAL TERMS OF THE FINANCIAL SYSTEM APPLICABLE DEFINITIONS For the purposes of this Law, the following definitions shall be used, being indicative and not limitative:

Second-Tier Activity. It is the intermediation of resources, in favor of financial entities and associations or foundations of a financial nature.

Savings. For the purposes of this Law, it is the portion of income that is not spent on present consumption but is preserved for future use and deposited in financial intermediation entities.

Agency. Urban or rural office that functionally depends on a branch or directly on the head office of a financial intermediation entity.

General Deposit Warehouse. Complementary financial services company specializing in the storage, safekeeping and temporary preservation of goods or merchandise belonging to others, authorized to issue deposit certificates or pledge bonds (warrant), which may constitute collateral.

Financial Lessor. Legal person that, through a financial leasing contract, undertakes to temporarily transfer the use and enjoyment of a movable or immovable thing to the lessee.

Financial Leasing. Financial activity carried out by a financial intermediation entity or by a financial leasing company with an exclusive purpose or other commercial companies not specialized in their capacity as lessor, consisting of transferring in favor of a natural or legal person as lessee the right of use and enjoyment of a movable or immovable asset, in exchange for the payment of a rent in periodic installments, granting in favor of the lessee the option to purchase said asset for the residual value of the total agreed amount. Financial leasing, due to its financial and credit nature, is of a legal nature different from that of the leasing regulated by the Civil Code.

Financial Lessee. Natural or legal person that, through a financial leasing contract, receives from the financial lessor for use and enjoyment a movable or immovable thing.

Financial System Supervisory Authority - ASFI. Institution responsible for the regulation and supervision of financial entities, with the powers conferred by the Political Constitution of the State and this Law.

Electronic Banking. It is the provision of financial services through the internet or other electronic and digital means without the need for the client's physical presence at the financial entity's offices.

Multiple Bank. A banking financial intermediary entity, which is based on the offering of authorized and available products, services and operations intended for clients in general, companies of any size and type of economic activity.

Small and Medium Enterprise Bank - SME. A banking financial intermediary entity, which is based on the offering of authorized and

available products, services and operations with specialization in the small and medium enterprise sector, without restriction on also providing them to microenterprises.

Bankarization. Degree of access to the financial intermediary system by the financial client.

Development Bank. A mixed or private banking financial intermediary entity whose objective is to promote, through financial and technical support, the development of the productive sectors of the national economy and of the trade and services sectors complementary to productive activity.

Public Bank. A banking financial intermediary entity of majority state ownership, whose purpose is to provide financial services to the public administration at its different levels of government and to the general public, favoring the development of national economic activity and supporting mainly the productive sector within the framework of the development policies established by the State.

Information Bureau. A complementary financial services company, whose exclusive business is the collection, administration and supply of credit information, sectoral statistics, events of operational failures in financial entities and other diverse information related to credit expansion potential and the identification of risks inherent to financial activity.

Exchange House. A legal entity that habitually carries out foreign currency exchange operations.

Financial Client. A natural or legal person who uses the services of financial entities by entering into contracts.

Financial Conglomerate or Financial Group. A set or group of companies that carry out financial nature activities, constituted under the common control of a controlling company authorized by the Financial System Supervisory Authority - ASFI, which includes among its members at least one financial intermediary entity.

Financial Consumer. Financial client and/or user.

Open Savings and Credit Cooperative. A financial intermediary entity constituted as a single-purpose cooperative society, authorized to carry out financial intermediary operations and to provide financial services to its members and to the general public, within the framework of this Law, in the national territory.

Work-Link Savings and Credit Cooperative. A non-profit, single-purpose company that carries out savings operations exclusively with its members and grants credit for their economic and social improvement and is organized within a public or private institution or company, or a professional guild. Affiliation is free and voluntary. In no case may mandatory affiliation mechanisms be established as a condition of employment and they cannot maintain offices open for public service.

Corporate Savings and Credit Cooperative. A financial intermediary entity constituted as a single-purpose cooperative society, authorized to carry out savings and credit operations exclusively with its members, within the framework of this Law, in the national territory.

Effective Financial Cost or Effective Cost. It is the total cost of a financial service that includes, in addition to the interest rate, all charges associated with the service, whatever their concept.

Credit. It is any risky asset, whatever the modality of its instrumentation, by means of which the financial intermediary entity, assuming the risk of its recovery, provides or undertakes to provide funds or other goods or guarantees before third parties the fulfillment of obligations incurred by its clients.

Credit to the Productive Sector. Financing destined for producers, for production purposes and services complementary to production, such as collection, storage, marketing, transportation, productive technology and others complementary to the productive process required by the producer, according to the definition established for this purpose by the Financial System Supervisory Authority - ASFI. Intellectual production shall be considered within this category in accordance with the regulations of the Financial System Supervisory Authority - ASFI.

Money Transfer and Remittance Company. A legal entity constituted as a complementary financial services company, authorized to habitually carry out money transfer and remittance operations.

Mobile Financial Service Company. A legal entity constituted as a complementary financial services company, authorized to provide services to financial intermediary entities to enable the use of mobile devices by financial clients.

Complementary Financial Services Company. A legal entity that carries out activities of providing complementary financial services in accordance with the definition of this Law, intended for financial entities and the general public, the same being subject to the authorization and control of the Financial System Supervisory Authority - ASFI.

Monetary and Securities Material Transport Company. Legal entity constituted as a complementary financial services company, authorized to regularly carry out operations for the transport of monetary material and securities.

Financial Company Member of a Financial Group. It is the legal entity, national or foreign, constituted as a Corporation that carries out financial nature activities, which is part of a financial group and is subject to the common control of a controlling company.

Financial Intermediation Entity. Legal entity established in the country, authorized by the Financial System Supervisory Authority - ASFI, whose corporate purpose is financial intermediation and the provision of Complementary Financial Services.

Communal Financial Entity. Financial intermediation entity constituted as a non-profit organization whose assets are made up of communal capital and ordinary capital with the purpose of financing the activity of a producers' organization and third parties under promotion conditions.

Financial Entity. Financial intermediation entity or complementary financial services company authorized by the Financial System Supervisory Authority - ASFI, with share participation of natural or legal persons, of national or foreign origin.

Housing Financial Entity. Company whose purpose is to provide financial intermediation services specializing in housing loans.

Factoring. Financial activity carried out by a financial entity with an exclusive purpose, consisting of the receipt of exchange invoices representing enforceable debts by

its clients, assuming or not the credit risk, in exchange for advance payment of money and charging an amount for the service.

Exchange Invoice. It is the security title that in the purchase and sale of goods on credit, the seller may draw and deliver or send to the buyer, so that the latter returns it duly accepted.

Guarantee. Own or third-party goods or rights delivered by the debtor of a credit operation to the creditor financial intermediation entity, to support the settlement of its credit and cover the risk of a possible default of the obligation.

Comprehensive Risk Management. Process that consists of identifying, measuring, monitoring, evaluating, controlling and reporting the risks inherent in the activities carried out by financial entities.

Group Comprehensive Risk Management. It is the comprehensive risk management practice carried out by financial groups at the consolidated level, to manage the risks derived from the integration of activities and operations.

Money Order. Payment instruction issued by a natural or legal person in favor of a third party in a certain place and on a certain date, using the services of a financial entity with an exclusive purpose.

Financial Group. Group of companies, national or foreign, that carry out only activities of a financial nature, including among their members financial intermediation entities of different types, complementary financial services companies, entities covered by the Securities Market, Insurance and Pensions Law.

Financial Intermediation. It is the habitual activity of raising resources, under any modality, for their placement together with the capital of the financial entity, in the form of credits and investments proper to the business purpose.

Development Financial Institution. Financial intermediation entity, constituted as a non-profit organization, authorized to carry out financial intermediation and provide comprehensive financial services in the national territory, within the framework of this Law with a comprehensive approach that includes social management and contributing to the sustainable development of small agricultural producers and micro and small enterprises.

Microcredit. It is credit to persons with self-employment activities, microenterprises and small economic units, with the application of specialized credit technologies for this type of client and whose source of repayment is the income generated by said activities.

Microfinance. It is the financial activity referring to the provision of microcredit, small-scale savings services and other financial services suited to the needs of low-income independent and self-employed natural persons and to microenterprises and small economic units, in a sustainable manner.

Subordinated Obligation. Liability subordinated to all other liabilities of the financial intermediation entity, being available to absorb losses, in case the equity resources prove insufficient.

Head Office. Office that consolidates all the operations of a financial intermediation entity.

Representative Office. Business promotion office authorized by the Financial System Supervision Authority - ASFI, which represents a financial intermediation entity constituted and located outside the country.

Financial Operations. They are the active, passive or contingent operations carried out by an authorized financial entity, within the framework of the activities provided for in this Law.

Control Bodies. The Financial Entities are constituted by the internal audit units and internal bodies, whose names are as follows: (i) Síndicos, in public limited companies; (ii) Consejo de vigilancia, which shall delegate to no more than two of its members called inspectores de vigilancia, in Savings and Credit Cooperatives; (iii)

Fiscalizadores Internos, in Development Financial Institutions, Communal Financial Entities and Housing Financial Entities.

Loan. Financial operation in which a financial entity delivers to a natural or legal person a fixed amount of money at the beginning of the operation with the condition that the borrower returns that amount, together with the agreed interest, within a determined term.

Credit Process. Set of activities carried out by a financial intermediation entity to grant credits, divided into stages that comprise the design of the credit product, definition of the client profile, receipt of applications, evaluation of potential clients, approval, disbursement, monitoring and recovery.

Financial Product. Type, class or category in which a given financial service is distinguished.

Consolidated Regulation. Set of rules and provisions of a general nature issued by the Financial System Supervision Authority - ASFI to regulate the activities of financial groups on a consolidated basis.

Financial Regulation. Activity carried out by the State consisting of the issuance of legal provisions that promote sound practices in the provision of financial services by financial entities, in order to achieve quality services and good attention to the consumers of the financial system, as well as prudent management of the risks inherent to their activities, for the purpose of protecting the public's savings and the stability and solvency of the financial system.

Financial Leaseback. Financial leasing operation characterized in that the financial lessor purchases from the financial lessee a movable or immovable asset, to whom the financial lessor subsequently transfers the right of use and enjoyment thereof, in exchange for the payment of a rent in periodic installments, granting the lessee the option to be able to repurchase said asset for the residual value of the agreed amount.

Repo. Contract by which ownership of securities is transferred, under the irrevocable and reciprocal commitment of the parties, to repurchase or resell said securities or others of the same kind, within an agreed term and price.

Exchange Risk. It is the probability that a financial intermediation entity incurs losses in its active, passive or contingent operations, due to variations in foreign currency exchange rates.

Credit Risk. It is the probability that a financial intermediation entity incurs losses in its active or contingent operations, due to the default of the counterparty or debtor.

Market Risk. It is the probability that a financial intermediation entity incurs losses due to adverse variations in market factors, such as interest rates, exchange rates and prices of underlying assets in financial operations.

Interest Rate Risk. It is the probability that a financial intermediation entity incurs losses due to variations in market interest rates.

Operational Risk. It is the possibility and probability that a financial intermediation entity incurs losses due to internal and external fraud, failures in people, processes and systems, internal events of a strategic and operational nature and other external events.

Systemic Risk. Risk created by interdependencies in a system or market, in which the failure of one entity or group of entities can cause a cascading failure, which can affect the system or market as a whole.

Financial Services. Various services provided by authorized financial entities, in order to satisfy the needs of financial consumers.

Complementary Financial Services. Financial leasing, factoring, storage, safekeeping and temporary preservation of third-party goods or merchandise, clearing and settlement, administration and supply of credit and operational risk information, transportation of money and securities, administration of electronic cards, currency exchange, drafts and remittances and financial services through mobile devices, and others that the Authority of Supervision of the Financial System - ASFI may identify and incorporate into the scope of regulation and supervision.

Comprehensive Development Services. Financial intermediation services and other specialized services in the field of economic and social development, extended with non-financial activities such as technical assistance, business management, support services in health, education and others inherent to social purposes, within the framework of technologies typical of financial entities with a social vocation.

Rural Financial Services. Savings, credit and other financial services provided by financial entities with a presence in rural areas, using specialized technologies to meet the needs of productive activities and other complementary activities of families living in rural areas.

Financing System. Set of authorized financial intermediation entities, state-owned or majority state-owned and private, that provide credit services.

Financial Regulation System. Also called the regulated financial system, it is made up of the Authority of Supervision of the Financial System, the Authority of Inspection and Control of Pensions and Insurance and the financial entities and companies of the State or with majority State participation and private ones, subject to the scope of control and supervision of both institutions.

Financial System. For purposes of this Law, it is the set of financial entities authorized in accordance with this Law, which provide financial services to the general population.

Overindebtedness. Credit situation that represents a high degree of risk of non-collectability due to a level of indebtedness higher than the debtor's payment capacity.

Controlling Company. It is the legal person that holds shares or participations in the capital stock of the financial companies that make up a financial group, whose main activity is the control of that group.

Branch. Office belonging to an authorized financial intermediation entity, subject to the administrative authority and organizational dependence of its head office.

Foreign Bank Branch. Authorized office, belonging to a bank constituted and located outside the country, Branch Abroad. Office of a Bolivian banking financial intermediation entity, located outside the country, subject to the administrative authority and organizational dependence of its head office in Bolivia, subject to the oversight of the supervision institutions of the host country.

Consolidated Supervision. Consolidated supervision is the permanent surveillance and inspection carried out by the Authority of Supervision of the Financial System - ASFI on the activities of financial groups, in an additional and complementary manner to the specialized supervision practiced by the sectoral supervision authorities.

Credit Technology. Operational and financial methodology for the evaluation and placement of credits, composed of objectives, policies, practices and procedures for each of the stages of the credit process.

Financial Technology. Operational and financial methodologies for the provision of savings, credit and other financial services, composed of objectives, policies, practices and procedures adopted by financial entities for the provision of such services.

Financial User. Natural or legal person who uses the services of financial entities, without the signing of contracts.

Social Interest Housing. Social interest housing shall be understood as that single housing without commercial purposes destined to lower-income households, whose commercial value or final cost for its construction including the value of the land, does not exceed UFV400,000.- (Four Hundred Thousand Housing Development Units) when it is an apartment and UFV460,000.- (Four Hundred Sixty Thousand Housing Development Units) for houses. These values may be adjusted by the central level government of the State through Supreme Decree.

Within this definition, land acquired for the purpose of constructing a single housing without commercial purposes shall be considered, whose commercial value does not exceed forty percent (40%) of the value established for houses, defined in the previous paragraph.

Rural Area. Geographic area of Bolivian territory, which does not include urban and peri-urban zones, in which agricultural and livestock activity is predominantly carried out, under the community life form of the families that inhabit it.