Resolution 069/2009: Regulation on Incentives for the Collection and Restructuring of Credit Portfolio Owned by the Central Bank of Bolivia

DIRECTORATE RESOLUTION NO. 069/2009 SUBJECT: FINANCIAL ENTITIES MANAGEMENT – REGULATION ON INCENTIVES FOR THE COLLECTION AND RESTRUCTURING OF CREDIT PORTFOLIO OWNED BY THE CENTRAL BANK OF BOLIVIA.

VIEWED: The Law No. 1670 of October 31, 1995. The Statute of the Central Bank of Bolivia of October 21, 2005. The Directorate Resolution No. 061/2003 of June 6, 2003. The Directorate Resolution No. 072/2008 of May 27, 2008. The technical-legal report from the Legal Affairs and Financial Entities Managerships GAL-SAJU No. 118-073/2009 GEF-SRRA No. 329-084/2009 of June 12, 2009.

CONSIDERING: That Directorate Resolution No. 061/2003 of June 6, 2003, brought into effect only Chapters II (Credit Recovery Committee) and V (Write-off of Unrecoverable Portfolio) of the Regulation on the Collection of Old Delinquent Portfolio, until the total conclusion of the administration of the Old Delinquent Portfolio.

That Directorate Resolution No. 072/2008 of May 27, 2008, approved the Regulation on the Administration and Recovery of Credit Portfolio of the former Boliviano Americano Bank and the Regulation for the Write-off of Credits of the Portfolio of the former BBA, treatment of recovery and withdrawal of the financial statements of the BCB.

That in a meeting on May 14, through Act No. 08/2009, the Committee for Recovery and Realization of Direct Administration Assets became aware of the policies that the Central Bank of Bolivia could adopt to ensure greater recovery of the former BBA portfolio. The Committee made suggestions and requested that these be incorporated into the project for presentation at the next meeting. Likewise, it suggested considering in the project the inclusion of all credit portfolios administered by the BCB.

That the Committee for Recovery and Realization of Direct Administration Assets, in an ordinary meeting on June 4, 2009, and through Act 09/2009, approved the policies proposed by the Legal Affairs and Financial Entities Managerships, instructing that these policies be submitted to the Directorate, together with the Draft Regulation on Incentives for the Collection and Restructuring of Credit Portfolio Owned by the Central Bank of Bolivia.

That in view of the aforementioned background, it is necessary to have a regulation for the administration of the credit portfolio of the Central Bank of Bolivia, which allows for recovery consistent with the current situation of the banking system and meets the needs and requirements of debtors and the Issuing Entity.

That Article 54 subsection o) of Law No. 1670, and Article 11 numeral 29) of the BCB Statute, provide that the Directorate has the authority to approve, modify, and interpret the Statute and its Regulations, by two-thirds of its total members, without the need for any additional administrative act.

That the Report SAJU No. 118-073/2009 GEF-SRRA No. 329-084/2009 of June 12, 2009, from the Legal Affairs and Financial Entities Managerships, states that the Directorate of the Central Bank of Bolivia has competence to regulate the Direct Administration of the Credit Portfolio of the Issuing Entity.

THEREFORE,

THE DIRECTORATE OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Approve the Regulation on Incentives for the Collection and Restructuring of Credit Portfolio Owned by the Central Bank of Bolivia, which forms an integral part of this Resolution, effective from July 1, 2009, until December 31, 2010.

Article 2.- The provisions contained in the Regulation on the Administration and Recovery of Credit Portfolio of the former Boliviano Americano Bank and the Regulation for the Write-off of Credits of the Portfolio of the former BBA, treatment of recovery and withdrawal of the financial statements of the BCB, approved by Directorate Resolution No. 072/2008 of May 27, 2008, are applicable insofar as they pertain to the said portfolio.

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

La Paz, June 16, 2009

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Gabriel Loza Tellería

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Gustavo Blacutt Alcalá Hugo Dorado Araníbar

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Rolando Marín Ibáñez Ernesto Yáñez Aguilar

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Rafael Boyán Téllez

//4. R.D. N° 069/2009

INCENTIVES FOR THE COLLECTION AND RESTRUCTURING OF CREDIT PORTFOLIO OWNED BY THE CENTRAL BANK OF BOLIVIA

CHAPTER I GENERALITIES

Article 1. Object and Scope of Application. The purpose of this Regulation is to regulate the benefits, granted temporarily, to debtors of the credit portfolio received in dation in payment by the Central Bank of Bolivia (Ex-BBA Portfolio and Old Delinquent, Progreso, Potosí, and Oruro Credit Banks) for the total payment and/or restructuring of their credits that are in a status of current, overdue, or in execution.

Article 2. Of the Benefits. Debtors of the credit portfolios indicated in the first article may avail themselves of: a) Benefits for total payment of their credits b) Facilities for the Restructuring of their debts

CHAPTER II BENEFITS OF TOTAL PAYMENT OF THE CREDIT

Article 3. Benefits to be granted. Debtors or guarantors of the credit portfolio indicated in the first article of this regulation who make the total payment of their debt in a single payment will benefit from the forgiveness of current, penal, and moratory interest according to the following scale:

FORGIVENESS OF INTERESTS CAPITAL BALANCE OF PORTFOLIO IN $US | % OF FORGIVENESS CURRENT INTERESTS | % OF FORGIVENESS PENAL AND MORATORY INTERESTS Less than or equal to 500 | 95 | 100 From 501 to 1,000 | 90 | 100 From 1,001 to 5,000 | 85 | 100 From 5,001 to 15,000 | 80 | 100 From 15,001 to 50,000 | 75 | 100 From 50,001 onwards | 70 | 100

Article 4. Requirements for the Benefit.

//5. R.D. N° 069/2009 When applicable, debtors or guarantors who avail themselves of this benefit must pay the professional fees of the lawyers as well as judicial expenses. Judicial expenses not reported by the lawyers by the date of settlement will be forgiven, with the BCB assuming these amounts from management results.

In the event that debtors or guarantors have more than one obligation with the BCB, the benefits will be applied per credit.

Article 5. Interests received in payment by the BCB. The interests of the credit portfolio of the Ex-BBA received and accounted for as part of payment for the financial support provided by the BCB will not be forgiven.

Article 6. Payments on Account. Pending judicial deposits up to the date of approval of this Regulation, due to judicial withholdings or auctions of assets, will not be considered for the benefits provided in the regulation.

CHAPTER III RESTRUCTURING OF CREDITS

Article 7. Facilities for Restructuring. Debtors of the credit portfolio indicated in the first article of this resolution, who have not initiated ordinary or other types of lawsuits against the BCB to avoid canceling their obligations with the said banks, as well as those who have not availed themselves of the benefits granted by Laws No. 2297 and No. 2495, may benefit from the restructuring of their credits with the following facilities:

PORTFOLIO SCALE IN $US | % OF FORGIVENESS CURRENT INTERESTS | % OF FORGIVENESS PENAL AND MORATORY INTERESTS | MINIMUM % OF PAYMENT TO CAPITAL Less than or equal to 500 | 95 | 100 | 50 From 501 to 1,000 | 90 | 100 | 40 From 1,001 to 5,000 | 85 | 100 | 30 From 5,001 to 15,000 | 80 | 100 | 20 From 15,001 to 50,000 | 75 | 100 | 10 From 50,001 onwards | 70 | 100 | 5

Article 8. Requirements for the Benefit.

//6. R.D. N° 069/2009 When applicable, debtors or guarantors who avail themselves of this benefit must pay the unforgiven current interest, the professional fees of the lawyers as well as judicial expenses. Judicial expenses not reported by the lawyers by the date of settlement will be forgiven, with the BCB assuming these amounts from management results.

In the event that debtors or guarantors have more than one obligation with the BCB, the benefits will be applied per credit.

Article 9. Terms of the restructuring. Restructurings will be subject to the following financial conditions: a) Interest Rate: TRE + 1 percentage point annually. b) Term: Maximum of 2 years for consumer credits Maximum of 10 years for commercial credits c) Currency: National Currency

Article 10. Modification of interest rates. Current credits and those restructured under Law No. 2297 may benefit from the modification of interest rates indicated in the previous article at the request of the debtor and, if applicable, after regularization of the installments pending payment at the date of rate modification, under the conditions of the restructured contract.

Article 11. Requirements for restructuring. For restructurings, the requirements and procedures provided in the Regulation on the Administration and Recovery of Credit Portfolio of the Ex Boliviano Americano Bank S.A., approved by Directorate Resolution No. 072/2008 of May 27, 2008, will apply.

For the old delinquent portfolio, the same guidelines established in the aforementioned Resolution will be used, as long as the application of the benefits of this regulation remains in effect.

Article 12. Interests received in payment by the BCB and Payments on Account The interests of the credit portfolio of the Ex-BBA received and accounted for as part of payment for the financial support provided by the BCB and the application of payments on account will have the same treatment established in Articles 5 and 6.

//7. R.D. N° 069/2009

CHAPTER IV FINAL PROVISIONS

Article 13. Reports to the Directorate. Quarterly, the Committee for Direct Administration of the Recovery and Realization of Assets of the EX BBA will report to the Directorate on the debtors availing themselves of this Regulation.

Article 14. Committee for Recovery of Old Delinquent Portfolio. Requests for restructuring of credits of the old delinquent portfolio will be approved or rejected by the Committee for Recovery of Old Delinquent Portfolio, as long as the validity of this Regulation lasts.

Article 15. Recovery of Written-off Credits. Written-off credits of the ex-BBA portfolio are not included in this Regulation, as they have a different treatment, according to the “Regulation for Write-off of Credits of the Portfolio of the ex BBA, Treatment of Recovery and Withdrawal of the Financial Statements of the BCB”.

Article 16. Validity of Benefits. The benefits granted under this regulation will remain in effect until December 31, 2010. ---ooo---