Resolution 042/2012

BOARD RESOLUTION NO. 042/2012
SUBJECT: ECONOMIC POLICY ADVISORY / FINANCIAL ENTITIES MANAGEMENT - APPROVES MODIFICATION TO THE LEGAL RESERVE REGULATION.

HAVING REVIEWED:
The Political Constitution of the State promulgated on February 7, 2009.
Law No. 1670 of October 31, 1995 of the Central Bank of Bolivia (BCB).
The BCB Statute approved by Board Resolution No. 128/2005 of October 21, 2005 and its subsequent modifications.
The Legal Reserve Regulation approved by Board Resolution No. 070/2009 of June 23, 2009 and modified by Board Resolutions 130/2010 of November 23, 2010, 007/2011 of January 18, 2011, 072/2011 of June 14, 2011, and 007/2012 of January 10, 2012. The Report from the Economic Policy Advisory and the Financial Entities Management BCB-APEC-SSIEE-INF-2012-15/BCB-GEF-SANA-INF-2012-4 of April 4, 2012. The Report from the Legal Affairs Management BCB-GAL-SANO-INF-2012-100 of April 5, 2012.

CONSIDERING:
That the Political Constitution of the State in its Article 328 provides that the BCB, in coordination with the economic policy determined by the Executive Branch, is empowered to determine and execute monetary policy.

That Law No. 1670 in its Article 7 provides that the Issuing Entity may establish mandatory legal reserves for financial intermediation entities and, for this purpose, shall determine their composition, amount, calculation method, characteristics, and remuneration.

That in its Article 37, the aforementioned legal norm establishes that the BCB is the custodian of the liquid reserves intended to cover said reserve and may delegate the custody of these deposits according to a specific regulation.

That the BCB Statute in Article 11 numeral 7) states that it is the faculty of the Board to establish, by absolute majority of votes, mandatory legal reserves for Financial Intermediation Entities and approve their composition, amount, calculation, characteristics, forms of administration, custody, and remuneration in accordance with the Regulation.

That the Legal Reserve Regulation aims to establish the technical and operational conditions of mandatory compliance for financial entities that are duly authorized for operation by the Supervisory Authority of the Financial System, regarding the constitution and form of administration of the legal reserve.

That the Main Economic Policy Advisory and the Financial Entities Management, through report BCB-APEC-SSIEE-INF-2012-15 / BCB-GEF-SANA-INF-2012-4, recommend the approval of the modification of Article 16 of the Legal Reserve Regulation.

That according to Report BCB-GAL-SANO-INF-2012-100, the modification proposal presented by the Main Economic Policy Advisory and the Financial Entities Management is legally appropriate as it does not contravene the current legal framework, being within the competence of the BCB Board to consider its approval.

That the BCB Board, in its capacity as the highest authority of the Institution, is responsible for defining its policies, specialized general application regulations, and internal rules, being empowered to issue norms and adopt general decisions necessary for the fulfillment of the functions, competencies, and faculties assigned by Law to the Issuing Entity, as established in Articles 44 and 54 item o) of Law No. 1670 and Articles 9, 11, and 24 of the BCB Statute.

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

Article 1.- Approve the partial modification to Article 16 (Sanctions for Early Withdrawals of Time Deposits) of the Legal Reserve Regulation as follows:

SAYS:
Fixed deposits that maintain any reserve exemption, under what is established in this Regulation, may not be redeemed early.
When the issuing entity acquires its own time deposit certificates, these must be cancelled and withdrawn from accounting, and such withdrawal must be communicated to the BCB within a period not exceeding 48 hours after it occurs.

SHOULD SAY:
“Fixed deposits that maintain any reserve exemption, under what is established in this Regulation, may not be redeemed early. This prohibition is excepted for foreign currency fixed deposits that, being exempt from constituting legal reserves, are redeemed with the sole and exclusive purpose of converting them into national currency deposits. When the issuing entity acquires its own time deposit certificates, these must be cancelled and withdrawn from accounting, and such withdrawal must be communicated to the BCB within a period not exceeding 48 hours after it occurs.”

Article 2.- This partial modification of the Legal Reserve Regulation shall enter into force as of April 23, 2012.

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

La Paz, April 10, 2012

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Marcelo Zabalaga Estrada

_________________________ _________________________ Rafael Boyán Téllez Hugo Dorado Araníbar

_________________________ _________________________ Ernesto Yáñez Aguilar Rolando Marín Ibáñez

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Gustavo Blacutt Alcalá