Resolution 017/99 - Financial System - Liquidity Credit to Banco Boliviano Americano S.A.

BOARD RESOLUTION NO. 017/99 SUBJECT: FINANCIAL SYSTEM - LIQUIDITY CREDIT TO BANCO BOLIVIANO AMERICANO S.A. FOR $US 8,000,000.-

SEEN: Law No. 1670 of the Central Bank of Bolivia (BCB) dated October 31, 1995. The Regulation on Legal Reserves for Institutions of the Financial System, approved by Board Resolution No. 180/97 of December 23, 1997. The Regulation on Liquidity Credits to Entities of the Financial Intermediation System, approved by Board Resolution No. 059/98 of June 9, 1998. The Note from Banco Boliviano Americano S.A. (BBA) GOF-083/99 dated March 9, 1999. The Note from the Central Bank of Bolivia SGA No. E-024/99 dated March 10, 1999. The Note from the Superintendence of Banks and Financial Entities SB/ISB/DOCUMENT 9572 dated March 10, 1999. The Report from the Financial System Management GSF-020/99 dated March 10, 1999. The Report from the Economic Policy Advisory APEC-ARM and F-No. 007/99 dated March 10, 1999. The Report from the Legal Advisory ALEG No. 011/99 dated March 10, 1999. Act No. 10/99 of the Financial System Analysis Committee (COASIF) dated March 10, 1999.

CONSIDERING: That Article 36 of Law 1670 of October 31, 1995, authorizes the BCB to grant liquidity credits to banks and financial intermediation entities, in cases duly justified and qualified by its Board of Directors by an absolute majority of votes.

//2. R.D. No. 017/99 That Banco Boliviano Americano S.A. has requested the granting of a liquidity credit for $US 8,000,000.- to constitute legal reserves in securities and meet temporary liquidity requirements. That the liquidity credit requested by Banco Boliviano Americano S.A. will be backed by a portfolio with rating 1 (normal), in a 2 to 1 proportion, thus guaranteeing the recovery of State funds.

That the Financial System Management indicates in its report that Banco Boliviano Americano meets all the requirements established in the aforementioned Regulation, and therefore, in its opinion, the liquidity credit request from said financial entity is appropriate. That the Economic Policy Advisory establishes in its report that there is margin in the Monetary Program to attend to the liquidity credit requested by Banco Boliviano Americano S.A. That in the opinion of the Legal Advisory, the BCB Board of Directors is authorized to grant liquidity credits in accordance with the Regulation on Liquidity Credits to Entities of the Financial Intermediation System. That in Act No. 10/99 of March 10, 1999, the favorable opinion of the Financial System Analysis Committee (COASIF) for the granting of the aforementioned liquidity credit in the amount requested by BBA appears.

THEREFORE, THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:

Article 1.- Grant a liquidity credit to Banco Boliviano Americano S.A., in accordance with Law 1670 of October 31, 1995, and the requirements established in the Regulation on Liquidity Credits to Entities of the Financial Intermediation System, under the following conditions:

//3.R.D. No. 017/99 Amount: Up to the sum of $US 8,000,000.- Currency: United States Dollars. Interest Rate: 16.27% per annum (average nominal active rate of the banking system for 360 days, prevailing in the market in the preceding week, from March 1 to 5, 1999). Term: 90 days from the signing of the contract. Amortization: A single payment at maturity. The BBA may pay the credit, including accumulated interest, in whole or in part, in advance. Guarantees: a) Automatic debit in its checking accounts and legal reserves that it maintains at the BCB; and b) Credit portfolio with own resources of Banco Boliviano Americano S.A., with rating 1 (normal) following the rating criteria established by the Superintendence of Banks and Financial Entities in its Resolution SB No. 155/98 of December 29, 1998. Said portfolio should, as much as possible, contain real guarantees, to the full satisfaction of the BCB. The temporary credit assignment will be documented through a contract. The sum of the guarantees must be equivalent to twice the amount of the credit. Banco Boliviano Americano S.A. will have a maximum term of seven business days to constitute the portfolio as collateral at the BCB.

Article 2.- The resources will be disbursed prior to the signing of the temporary portfolio assignment contract, via credits to the foreign currency checking account that it maintains at the BCB, upon written request from the BBA. These resources may only be used by Banco Boliviano Americano S.A. to cover its reserve shortfall, exchange deficiencies in the Clearing House, as well as overdrafts in its checking account at the BCB.

Article 3.- From the date of subscription of the credit assignment contract, Banco Boliviano Americano S.A. may not grant new loans or make new investments. Variations resulting from exchange rate fluctuations of the Boliviano with respect to the United States Dollar are excepted.

//4.R.D. No. 017/99 Article 4.- Instruct the BCB Administration to include Administrative Conditions in the credit assignment contract to be signed with the BBA, in accordance with the Regulation on Liquidity Credits to Entities of the Financial Intermediation System.

Article 5.- Request the Superintendence of Banks and Financial Entities to strictly monitor all provisions of this Resolution.

Article 6.- Authorize the President of the BCB to sign the loan contract and temporary portfolio assignment with Banco Boliviano Americano S.A.

Article 7.- The Presidency and General Management are charged with the execution and compliance of this Resolution.

La Paz, March 11, 1999

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Juan Antonio Morales A.

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Armando Pinell S. Jaime Ponce G. Fernando Campero P.