Resolution 050/2010 Modifying Resolution 092/2004 on Recovering Non-Performing Loans

BOARD RESOLUTION NO. 050/2010 SUBJECT: FINANCIAL ENTITIES MANAGEMENT – MODIFIES BOARD RESOLUTION NO. 092/2004.

SEEN: Law No. 1670 of October 31, 1995. Board Resolution No. 053/99 of June 22, 1999. Board Resolution No. 061/2003 of June 6, 2003. Board Resolution No. 092/2004 of June 29, 2004. The Report from the Financial Entities Management GEF No. 150 – SRRA No. 45/2010 of April 2, 2010. The Report from the Legal Affairs Management SAJU No. 016/2010 of February 18, 2010.

CONSIDERING: That by Board Resolution No. 053/99, the Regulation for the Collection of Old Non-Performing Portfolio was approved with the aim of having regulations that allow the BCB to recover its non-performing credit portfolio, and by Resolution No. 061/2003, Chapters II (Credit Recovery Committee) and V (Write-off of Unrecoverable Portfolio) were reinstated until the total conclusion of the Administration of the Old Non-Performing Portfolio.

That in order to facilitate the collection of written-off portfolio, by Resolution No. 092/2004, the BCB Board approved the forgiveness of penal interest, court costs, judicial expenses, and other administrative expenses, for the recovery of written-off credits from Financial Entities in Liquidation: Banco de Crédito Oruro S.A., Banco del Progreso Nacional S.A.M., ex Banco de Potosí S.A. and ex INALPRE provided that the borrower pays the total of their debt in cash to capital plus current interest recalculated at the Reference Interest Rate (TRE) plus five percentage points.

That with the aim of assuming policies for the effective recovery of written-off credits from Old Non-Performing Portfolio, it is necessary to expand the benefit contained in Board Resolution No. 092/2004 for the payment of written-off credits from Old Non-Performing Portfolio, as well as their restructuring, establishing the forms and conditions for such effects.

That for the application of write-off policies for credits of Ex INALPRE, the BCB must sign an Addendum with the Vice Ministry of Planning and Development, for which reason it is recommended to exclude the portfolio of ex INALPRE from this modification.

That in order to have uniform policies for the administration and recovery of the written-off credit portfolio, the Financial Entities Management considers and recommends modifying Board Resolution No. 092/2004.

That the Legal Affairs Management through Report SAJU No. 016/2010 states that the proposal to modify Board Resolution No. 092/2004 regarding the benefits for the recovery of written-off credits from Old Non-Performing Portfolio is legally procedent since it does not contravene the current legal framework, being the competence of the BCB Board to approve it by simple majority of votes of the members present in the meeting, in accordance with what is provided in article 24 of the BCB Statute and within the framework of the attributions provided in Law No. 1670, excluding the credits of ex INALPRE and Article 11 numeral 37 of the Statute of the Issuing Entity the Board has all the legal faculties to dictate general application policies relative to the administration of its credits.

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

Article 1.- Modify article 1 of Board Resolution No. 092/2004 of June 29, 2004 in the following terms:

SAYS: Article 1.- Approve the forgiveness of penal interest, court costs, judicial expenses, and other administrative expenses, for the recovery of written-off credits from Financial Entities in Liquidation: Banco de Crédito Oruro S.A., Banco del Progreso Nacional S.A.M., ex Banco de Potosí S.A. and ex INALPRE, provided that the borrower pays the total of their debt in cash in the currency of origin of the credit to capital plus current interest recalculated at the Reference Interest Rate (TRE) in foreign currency or in national currency as appropriate plus five percentage points, corresponding to the portfolio returned, received in dation in payment and in administration, during the entire period that the administration of the old written-off portfolio lasts.

//2. B.D. No. 050/2010

SHOULD SAY: “Article 1.- Every written-off credit from Financial Entities in Liquidation: Banco de Crédito Oruro S.A., Banco del Progreso Nacional S.A.M. and Banco Potosí S.A., may be paid by the debtor, guarantor or interested third parties, considering the amount of written-off capital, in the following manner:

Alternatively, a written-off credit prior to approval by the Credit Recovery Committee of the Old Non-Performing Portfolio, may be subject to restructuring according to the following:

a) Written-off credits subject to restructuring are considered those whose borrower reasonably demonstrates the existence of positive and sufficient cash flows to honor their future financial obligations, as well as the collateral that guarantees such restructuring. b) The restructuring of credits will proceed when real guarantees are sufficient with a ratio of at least two to one of the amount to be restructured, taking as a base the Commercial Value of the guarantee. The guarantees offered must be duly regularized. c) The written-off credits to be restructured must recognize the outstanding capital balance and current interest recalculated at the TRE rate plus five points (5%) on the effective date of restructuring. The capitalization of interest, established in the Commercial Code, will also proceed. d) The written-off credits will be reincorporated into the BCB's assets with a provision of 100%.

OUTSTANDING CAPITAL PAYMENTS OF WRITTEN-OFF CREDITS TO BE MADE BY BORROWERS

Less than or equal to $us. 1,000.- In a single payment 50% of the outstanding capital balance, forgiveness of the remaining 50% of capital and 100% of current interest, penal interest, judicial expenses and attorney fees.

Greater than $us. 1,000.- and less than or equal to $us. 5,000.- In a single payment 100% of the capital balance, forgiveness of 100% of current interest, penal interest, judicial expenses and attorney fees.

Greater than $us. 5,000.- In a single payment, 100% of the capital balance and interest recalculated at the current TRE rate on the date of payment, forgiveness of penal interest, judicial expenses and attorney fees.

//4. B.D. No. 050/2010 e) Restructuring will not proceed for those written-off credits that have previously been restructured under the framework of Law 2297.”

Article 2.- The Presidency and General Management are in charge of the execution and compliance with this Resolution.

La Paz, April 6, 2010

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Rolando Marín Ibáñez

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Gustavo Blacutt Alcalá Hugo Dorado Araníbar

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Ernesto Yáñez Aguilar Rafael Boyán Téllez