Resolution 072/2008 Approving Regulations for Administration, Recovery, Write-off, and Financial Statement Treatment of the Former BBA Credit Portfolio

BOARD RESOLUTION NO. 072/2008
SUBJECT: FINANCIAL ENTITIES MANAGEMENT – REGULATIONS FOR THE ADMINISTRATION AND RECOVERY OF THE CREDIT PORTFOLIO OF THE FORMER BBA AND REGULATIONS FOR THE WRITE-OFF OF CREDITS FROM THE FORMER BBA PORTFOLIO, TREATMENT OF RECOVERY AND REMOVAL FROM THE FINANCIAL STATEMENTS OF THE BCB.

HAVING SEEN:
Law No. 1670 of October 31, 1995.
The Statute of the Central Bank of Bolivia of October 21, 2005.
Board Resolution No. 045/2007 dated April 9, 2007.
The technical-legal report from the Legal Affairs and Financial Entities Management Departments GEF-GAL No. 316-005/2008 dated May 9, 2008.

CONSIDERING:
That Board Resolution No. 045/2007 of April 9, 2007, approved the Regulations for the Administration and Recovery of the Credit Portfolio of the former Banco Boliviano Americano.

That Article 94 of the aforementioned Regulations for the Administration and Recovery of the Credit Portfolio of the former Banco Boliviano Americano S.A., establishes that any modification to said Regulations must be approved by the Board of Directors of the BCB.

That through Act No. 05/2008, the Direct Administration Asset Recovery and Realization Committee approved the Draft Regulations for the Write-off of Credits from the Former BBA Portfolio, Accounting Treatment and Removal from the Financial Statements of the BCB, instructing that it be sent to the Legal Committee for its consideration and subsequent treatment in the Board.

That the Legal Affairs Committee, through Internal Communication, states that in an ordinary meeting held on March 13, 2008, it reviewed the draft Regulations for the Write-off of Credits from the Former BBA Portfolio, and having made some formal modifications, expresses its approval of the aforementioned draft.

That the Direct Administration Asset Recovery and Realization Committee, in an ordinary meeting held on May 7, 2008 and through Act 09/2008, approved the Draft

//2. B.D. No. 72/2008) modifications to the Regulations for the Administration and Recovery of the Credit Portfolio of the former BBA, instructing that said document be submitted for consideration by the Board, together with the draft Regulations for the Write-off of Credits from the Former BBA Portfolio.

That through the internal control report of External Audit as of December 31, 2007, regarding the Regulations for the Administration and Recovery of the Credit Portfolio of the former BBA, the auditing firm states that said Regulations are not applicable to the BCB, because the administered assets have particular characteristics, suggesting reviewing the guidelines established in the Regulations and making the modifications that prioritize the recovery of the portfolio.

That in light of the aforementioned background, it is necessary to have a regulation for the administration of the credit portfolio of the former Banco Boliviano Americano, in accordance with the needs and requirements that it entails.

That Article 54 subsection o) of Law No. 1670, and Article 11 numeral 29) of the Statute of the BCB, provide that the Board 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 GEF-GAL No. 316-005/2008 dated May 9, 2008, from the Legal Affairs and Financial Entities Management Departments, states that the Board of Directors of the Central Bank of Bolivia has competence to regulate the Direct Administration of the Credit Portfolio of the former BBA.

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

Article 1.- Approve the Regulations for the Administration and Recovery of the Credit Portfolio of the former Banco Boliviano Americano S.A. which appears in "Annex 1" to this Resolution, effective from June 2, 2008.

Article 2.- Approve the Regulations for the Write-off of Credits from the Portfolio of the former Banco Boliviano Americano, Treatment of Recovery and Removal from the Financial Statements of the Central Bank of Bolivia which appear in "Annex 2" to this Resolution, effective from June 2, 2008.

Article 3.- Repeal the Regulations for the Administration and Recovery of the Credit Portfolio of the former BBA, approved by Board Resolution No. 045/2007 dated April 9, 2007, from the effective date of this Resolution.

//3. B.D. No. 72/2008)
Repeal all provisions contrary to the Regulations approved by this Resolution.

Article 4.- The Presidency and the General Management are charged with the execution and compliance of this Resolution.

La Paz, May 27, 2008

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Raúl Garrón Claure

_________________________ _________________________ Gustavo Blacutt Alcalá Hugo Dorado Araníbar

_________________________ _________________________ Osvaldo Nina Baltazar Ernesto Yáñez Aguilar

//4. B.D. No. 72/2008)

REGULATIONS FOR THE ADMINISTRATION AND RECOVERY OF THE CREDIT PORTFOLIO OF THE FORMER BANCO BOLIVIANO AMERICANO S.A.

CHAPTER I
GENERALITIES

Article 1.- Object and Scope of Application.-
The present Regulations aim to regulate the procedures for administration management, which includes collection management, rescheduling, forgiveness of penalty and late interest, portfolio write-off, substitution and release of guarantees, transmission of obligations, supervision and evaluation of credits, insurance, and payment in kind.

Article 2.- Administration and Recovery of Credit Portfolio.
The direct administration and recovery management of the credit portfolio received in dación en pago (transfer of assets in satisfaction of debt) from the former BBA and risk management shall be governed by the provisions of these Regulations, the internal provisions of the BCB, and, where applicable, the provisions of the Law of Banks and Financial Entities, regulatory provisions issued by the Superintendence of Banks and Financial Entities (SBEF), the Commercial Code, and other related legal provisions.

CHAPTER II
ORGANIZATIONAL STRUCTURE IN THE MANAGEMENT OF ADMINISTRATION AND RECOVERY OF THE CREDIT PORTFOLIO

Article 3.- Direct Administration Asset Recovery and Realization Committee
The Direct Administration Asset Recovery and Realization Committee (Committee) is the highest instance designated by the Board of Directors of the Central Bank of Bolivia for the management of the credit portfolio received in dación en pago from the former BBA, under the terms set forth in these Regulations.

Likewise, it is the designated responsible instance by the Central Bank of Bolivia (BCB) for the supervision and control of the administration and recovery of the credit portfolio received in dación en pago from the former BBA, and of all assets resulting from judicial adjudications.

The Committee shall be composed of:

• Two Directors, one of whom shall preside over the meetings
• General Manager,
• Financial Entities Manager,

//5. B.D. No. 72/2008)

• Legal Affairs Manager,
• Deputy Manager of Legal Affairs, and
• Deputy Manager of Recovery and Realization of Assets, who shall act as Secretary of the Committee.

The decisions of the Committee shall be recorded in Minutes and in Express Resolutions when applicable.

The meetings of the Committee shall necessarily be presided over by a Director.

The Committee shall hold ordinary meetings every fifteen days and extraordinary meetings when necessary, at the request of the President or Secretary of the Committee.

The Board of Directors shall designate the President and Vice President of the Committee.

Committee members may not abstain from voting. In case of dissent, they must justify their position, which shall be recorded in the Minutes.

Article 4.- Financial Entities Management.
The Financial Entities Management (GEF) is the liaison with the Committee. All information and requirements that the Committee has shall be channeled through said Management.

The Financial Entities Management is the executive unit for the administration and recovery of the credit portfolio received in dación en pago from the former BBA.

Likewise, when for any circumstance the BCB holds shares, bonds, participation certificates or any other titles that grant it the right to participate in assemblies, the Financial Entities Management shall exercise the rights derived from such titles by delegation of the General Management, according to the power to be conferred.

Article 5.- Sub-Management of Recovery and Realization of Assets.
Unit dependent on the Financial Entities Management. It is the direct operational level of the administration and recovery management of the credit portfolio received in dación en pago from the former BBA, which has broad powers to carry out such tasks during the time that the administration of the aforementioned credit portfolio lasts.

Article 6.- Legal Affairs Management.
The Legal Affairs Management is the legal support unit for the Financial Entities Management.

It is responsible for the control, follow-up and recovery of the credit portfolio in judicial execution.

//6. B.D. No. 72/2008)

Article 7.- Administration Management.
The Administration Management is responsible for carrying out the hiring and payment of services requested by the Financial Entities Management and Legal Affairs Management.

CHAPTER III
FUNCTIONS AND RESPONSIBILITIES

Article 8.- Functions and Responsibilities of the Direct Administration Asset Recovery and Realization Committee.
The functions and responsibilities of the Committee are:

1. Approve, reject or request expansions or complements to the different management reports presented by the Financial Entities Management and Legal Affairs Management.

2. Request the internal and external audits it deems necessary.

3. Authorize credit reschedulings, daciones en pago, release and substitution of guarantees, acceptance of other forms of transmission of obligations for credits without judicial execution, according to the policies established in these Regulations.

4. Authorize the reclassification of commercial credits according to the norms established in these Regulations and of the SBEF where applicable.

5. Authorize the write-off of credits according to the Regulations for the Write-off of Credits and subsequent Recovery Treatment.

6. Report semi-annually and when the Board of Directors requests, on the administration of the assets received in dación en pago from the former BBA and adjudicated in the recovery of credits from that former entity.

7. Authorize the judicial adjudication of assets in the second auction, in case of risk of loss of the assets to be auctioned and consider the request for a third auction when the value of the asset to be auctioned is higher than the value of the debt.

8. Establish, approve, review and carry out the follow-up and monitoring of strategies and policies regarding the administration and collection management of the credit portfolio.

9. Authorize, when appropriate, and always provided there is no judicial execution, the publication of the list of delinquent debtors in oral or written press media of national and local circulation through the General Secretariat of the BCB.

//7. B.D. No. 72/2008)

10. Approve the budgets for mortgage insurance, all-risk insurance and any other budget of expenses arising from the administration and recovery of the credit portfolio received in dación en pago from the former BBA.

11. Any others derived from these Regulations for the efficient fulfillment of the administration and recovery of the credit portfolio.

12. Upon the request of a borrower, and with the technical and legal reports prepared by the Financial Entities Management and Legal Affairs Management, authorize the return of money paid in excess with respect to the amount owed by the borrower with a credit to the corresponding bank account.

Article 9.- Functions and Responsibilities of the Financial Entities Management.
The functions and responsibilities of the Financial Entities Management, by itself and through the Sub-Management of Recovery and Realization of Assets, are:

1. Analyze the behavior of the current portfolio and issue technical criteria.

2. Carry out the respective follow-up of the obligations of each borrower.

3. Carry out the collection of the obligations of each borrower.

4. Receive daily the credit recovery information from the correspondent banks of the BCB and register it.

5. Account for the credit reschedulings approved by the Committee.

6. Carry out the forgiveness of penalty and late interest under the terms established in these Regulations and present quarterly reports to the Committee.

7. Account for the write-off of credits according to the Regulations for the Write-off of Credits and subsequent Recovery Treatment, approved by the Board of Directors of the BCB.

8. Record in the BCB accounting system all transactions carried out, following internal norms of the BCB.

9. Register in the Portfolio Administrator System all transactions carried out.

10. Carry out monthly reconciliations of capital, interest and provisions between the movements of the systems indicated in points 8 and 9.

11. Prepare payment intimations to the debtors of the credit portfolio.

12. Register in the credit portfolio administrator system the contractual modifications and new contracts signed with borrowers.

//8. B.D. No. 72/2008)

13. Carry out technical evaluations and analysis for decision-making by the Committee related to the management and administration of the credit portfolio of the former BBA and the financial evaluation of borrowers through a report, having to also fill out the form for this effect (Annex A).

14. Report the credit portfolio to the Central Credit Risk Information Center (CIRC) of the SBEF according to current norms.

15. Keep in archive and with due custody and security the documents organized by each credit operation.

16. Prepare reports and information on the credit portfolio according to the following detail:
    a) Daily report of collections and the corresponding credits in the BCB accounts. b) Monthly report of reschedulings carried out. c) Monthly report of upcoming maturities. d) Monthly comparative report of the status of the current, overdue and in-execution portfolio. e) Monthly report of the write-offs of the credit portfolio according to the specific form for this effect (Annex B). f) Monthly detailed report of consolidated portfolio balances by client. g) Quarterly report on the adjudication of movable and immovable assets. h) Reports required by the Board of Directors of the BCB and others by the SBEF.

Article 10.- Functions and Responsibilities of the Legal Affairs Management.
The functions and responsibilities of the Legal Affairs Management, by itself and through the Sub-Management of Legal Affairs, are:

1. Control, follow-up and recovery of the credit portfolio in judicial execution managed by external and internal lawyers.

2. Request complementary reports from the sponsoring lawyers of the credit portfolio in case there are observations on the information sent to the BCB.

3. Inform the Financial Entities Management in the first fifteen (15) business days of each month on the current status of the judicial processes of the portfolio in the specific form for this effect (Annex C).

4. Submit to the Committee quarterly reports on the status of the judicial processes and special reports when the case warrants.

//9. B.D. No. 72/2008)

5. Send to the Financial Entities Management the detail of adjudications of movable and immovable assets in the judicial recovery of the credit portfolio with the adjudication minute or equivalent document.

6. Prepare legal reports for decision-making by the Committee in the cases referred to in numeral seven of Article Eight of these Regulations.

7. At the request of the Financial Entities Management, prepare legal reports on credit payment proposals for their presentation to the Committee, within the framework of these Regulations.

8. Prepare reports on the write-off of credit portfolios greater than US$1,000 or its equivalent in national currency, rescheduling contracts, transmission of obligations, release or substitution of guarantees and others related.

9. At the request of the Financial Entities Management, prepare reports on the write-off of credit portfolios less than or equal to US$1,000 or its equivalent in national currency, rescheduling contracts, transmission of obligations, release or substitution of guarantees, and others related.

CHAPTER IV
DEFINITIONS

Article 11.- Of the Definitions
For the purposes of these Regulations, the following definitions will be used:

Credit: It is an asset regardless of the modality of its instrumentality for its recovery under the terms of these Regulations.

Commercial Credit: Credit granted by the former BBA regardless of its particular objective, with the exception of housing mortgage credits, consumer credits and microcredits.

Consumer Credit: Credit granted by the former BBA to a natural person, intended to finance the acquisition of consumer goods or the payment of services. This definition includes operations with credit cards of natural persons.

Rescheduling: It is the contract under which the main conditions of the credit are modified, either by establishing a different amount or a new payment plan for the balance of a credit. The rescheduling must be instrumented through a new contract or an addendum to the original contract, regardless of whether it is covered under a credit line. The rescheduling will produce its legal effects only when the corresponding contract is duly signed by the parties and registered in the corresponding records.

Credit Portfolio: It corresponds to the set of credits granted by the former BBA. According to the payment behavior of the borrowers based on the payment plan stipulated in each contract, it is classified into:
Current Portfolio.- Credits that have their capital and interest amortizations up to date according to the payment plan established in the credit contract.
Overdue Portfolio.- Credits whose capital, amortization installments or interest have not been fully cancelled by the maturity date according to the payment plan established in the credit contract. In-Execution Portfolio.- Credits for which judicial actions have been initiated for collection or whose capital, amortization installments or interest have a delay of more than 90 days according to the payment plan established in the credit contract.

Delinquency: It is the delay of the borrower in fulfilling the agreed payment plan, whether of capital and/or interest. In the case of credits payable in installments, delinquency is counted from the day of maturity of the oldest overdue installment according to the original payment schedule and the total balance of the operation is considered overdue until the date when it is regularized, both in the payment of capital and interest.

Write-off: It is the removal of the asset with application to the provisions constituted for these effects.

Guarantees: Guarantees constitute an alternative source of repayment of obligations in case of default by the borrower. The types of guarantees are:
Mortgage Guarantee.- Immovable assets, such as urban and rural land, buildings, constructions in industrial plants, houses and apartments, parking lots, warehouses, offices in horizontal or non-horizontal property. Pledge Guarantees subject to registration.- Pledges on industrial machinery with or without displacement. In contracts with pledge guarantee, the depositary will be obliged to keep the pledge in their possession, being responsible for deterioration, decrease in value or loss, except for loss of value due to obsolescence.

//10. B.D. No. 72/2008)
(i) Pledge Bonds.- In contracts with pledge guarantee, the depositary will be obliged to keep the pledge in their possession, being responsible for deterioration, decrease in value or loss, except for loss of value due to obsolescence. Securities.- Valid are those securities issued or guaranteed by the General Treasury of the Nation, the BCB Deposit Certificates, the time deposit certificates issued by banks and financial entities of the country and other securities contemplated in the Commercial Code. Personal Guarantee.- Personal, joint and several, commutative and indivisible guarantee of natural persons of proven solvency. Types of Credit Amortization:
Credit amortizations may be carried out in the following forms:

• Equal installments including capital and interest or
• Equal capital installments and interest on balances.

CHAPTER V
ADMINISTRATION OF THE CREDIT PORTFOLIO

Article 12.- Of the administration of the credit portfolio
The administration of the credit portfolio according to the aspects detailed in Article One of these Regulations comprises:
The collection management of the portfolio according to its status: current, overdue and in execution.

• The collection management of the portfolio according to its current, overdue and in execution status
• The evaluation and classification of this portfolio.
• The determination of specific and generic provisions for uncollectibility.

Article 13.- Of the classification of the credit portfolio
The administration of the credit portfolio will be carried out in accordance with these Regulations and the provisions established by the SBEF where applicable. For this purpose, the portfolio must be classified into:

• Commercial credits.
• Consumer credits.

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//12. R D. N° 72/2008)
Section 1
Collection Management
Article 14.- Decisions on collection management.
The Committee is authorized to take the decisions it deems necessary regarding the collection management of the credit portfolio, within the framework of the norms of this Regulation. When its decisions are not based on the Regulation, it will ensure the best interest of the BCB, aspects that must be reported to the Board of Directors.

Article 15.- Responsibility.
Collection management will be in charge of the Asset Recovery Department, supervised by the Sub-Management of Recovery and Realization of Assets and the Financial Entities Management.

Article 16.- Collection management of the credit portfolio.
Collection will be divided into three levels:

• Collection management for the active credit portfolio.
• Extrajudicial collection management for overdue credit portfolio and in execution without the initiation of judicial actions.
• Judicial collection management for the credit portfolio in execution.

Collection Management for the Active Credit Portfolio
Article 17.- Credit portfolio maturities.
The Asset Recovery Department will issue monthly a list of credit maturities for the following thirty (30) days, for the start of the collection process. Based on this information, pre-notice letters will be issued and sent to the borrower by express mail (courier).

Article 18.- Information survey.
Regardless of the pre-notice lists, the Asset Recovery Department will conduct an information survey two weeks in advance of the end of the month. This will allow identifying the credits for which judicial actions must be initiated regardless of whether they are in default or not.

Article 19.- Communication with borrowers.
As reinforcement to the collection management, the Asset Recovery Department will communicate with borrowers whose credits mature on that day, so as to ensure the recovery of installments at maturity.

//13. R D. N° 72/2008)
Extrajudicial Collection Management of Overdue Credit Portfolio and in Execution without Initiation of Judicial Actions

Article 20.- On extrajudicial collection.
Extrajudicial collection may be carried out on overdue credits and in execution without the initiation of judicial actions.

Article 21.- List of overdue credits.
The Asset Recovery Department will issue monthly a list of overdue credits for the respective collection.

Article 22.- Daily collection of overdue credit portfolio.
The Asset Recovery Department will manage the daily collection of overdue credits through telephone calls or written communications. From the fifth (5th) business day of entry into the overdue portfolio, pre-notice letters for transfer to execution will be sent to debtors to regularize the operation, or payment summons, as appropriate.

Article 23.- Term for extrajudicial collection of overdue credits.
Extrajudicial collection will be carried out by the Financial Entities Management, which may request advice from the Legal Affairs Management; it will also determine the initiation or not of legal actions before ninety (90) days of a specific operation being overdue.

Article 24.- Extrajudicial collection of credits in execution without initiation of judicial actions.
Extrajudicial collection of credits in execution without initiation of judicial actions will be carried out by the Financial Entities Management, which must be oriented towards the recovery of the portfolio and avoiding legal prescription.

Article 25.- Credit reported to the CIRC of the SBEF.
The BCB may receive partial payments while maintaining the report in the CIRC of the SBEF until the payment of the total of the overdue installment corresponding to the credit, without modifying its initial conditions.

Article 26.- Extrajudicial collection by third parties.
The BCB may hire third parties or companies for extrajudicial collection (partial or total of the credit portfolio).

Judicial Collection Management of the Credit Portfolio in Execution

//14. R D. N° 72/2008)
Article 27.- Entry into execution.
The Financial Entities Management will request the Legal Affairs Management to initiate judicial collection actions for those credits that have a delay of more than 90 days in the payment of capital, amortization installments, or interest according to the payment plan established in the credit contract, attaching the credit settlement, the loan contract to be executed, proof of disbursement, documentation related to the guarantees constituted, and all documents related to the same. The Legal Affairs Management will initiate the legal processes, prior to analysis and relevance of the documentation.

Article 28.- Information on credit portfolio in execution.
The credit portfolio in execution form (Annex C) records the status of the portfolio in judicial execution for the control and follow-up of the Legal Affairs Management and for the control of the Financial Entities Management.

Section 2
Credit Portfolio Restructuring

Article 29.- Credit portfolio restructuring.
Credit restructuring involves the modification of the amount, term, and/or payment method and/or interest rate, ratifying all other clauses including the guarantees constituted, unless they are replaced by better ones.

Article 30.- Credit subject to restructuring.
A credit subject to restructuring is considered any active credit, in default or in judicial execution, and whose borrower reasonably demonstrates the existence of positive and sufficient cash flows to honor its future financial obligations.

Article 31.- Approval by the Committee.
Restructuring requests that fall within the requirements for credit restructuring detailed in this Regulation will be considered for approval or rejection by the Committee.

Analysis prior to restructuring
Article 32.- Borrower's payment capacity.
The risk analysis must be carried out prior to the restructuring of the credit, fundamentally analyzing the payment capacity of the borrower and the guarantor, that is, the study of the repayment source that will generate the resources to pay the credit. Therefore, the assets, liabilities, and cash flow of the socio-economic unit of the debtor and guarantor must be analyzed.

//15. R D. N° 72/2008)
The financial situation is also important in the analysis of payment capacity, as equity constitutes a safety fund for contingencies. Guarantees that enable the effective recovery of the credit in the short term must be taken into account preferentially.

Article 33.- Indebtedness with the rest of the financial system.
Section 33.01 The Financial Entities Management will verify the payment behavior of both the debtor and the guarantors in the rest of the financial system, for which it must conduct the relevant consultation with the CIRC of the SBEF.

Appraisals and Updates
Article 34.- Appraisals of guarantees and updates.
When the update of guarantee appraisals is required in the credit restructuring process, they will be carried out by professionals authorized by the BCB, complying with the requirements demanded by the SBEF.

Article 35.- Cost of update.
The cost of updating guarantee appraisals will be covered by the client.

Article 36.- Analysis of credits subject to restructuring.
For the consideration and analysis of credits subject to restructuring, the Financial Entities Management will issue a technical report attaching the Financial Evaluation form (Annex A).

Required Documentation
Article 37.- On the documentation required for natural persons - debtor and/or guarantors.
For the restructuring of credits, the information and documentation required for natural persons will be the following:

1. Restructuring request.
2. Copy of the identity card of the borrower and spouse, if applicable.
3. Sworn declaration of assets, income, and expenses, of the borrower and spouse with the following information:
   a) List of assets, direct and indirect debts assumed with financial entities or other companies and persons. In the case of declaring assets, they must be backed by copies of some document that proves ownership of the asset.

//16. R D. N° 72/2008) b) Detail of income and expenses, attaching copies of pay slips for the case of dependents, and supported cash flow for independents.

Article 38.- On the documentation required for legal persons - debtor and/or guarantors
The information and documentation required for legal persons will be the following:

1. Restructuring request.
2. Sworn declaration of assets, income, and expenses, with the following information:
   a) Name or Trade Name. b) Tax Identification Number (NIT). c) Registration with FUNDEMPRESA d) Address of the main office. e) Updated list of partners or shareholders who have a participation greater than or equal to 5% of the capital, directors, trustees, and executives. f) Financial Statements at the close of the last three fiscal years. For companies with income equal to or greater than Bs1,200,000.-, the projected cash flow for the period of the restructuring must also be presented, indicating the assumptions adopted for its preparation.

Article 39.- On guarantees.
The documentation required according to the guarantee(s) presented by the borrower will be the following:

1. Personal Guarantee:
   a) Copy of the guarantor's identity card, and of the spouse if applicable. b) Original of the sworn declaration of assets, income, and expenses of the guarantor and spouse, with the following information:
   i) Full name, identity card, marital status, home address, work address. ii) List of assets, direct and indirect debts assumed with financial entities or other companies and persons. In the case of declaring assets, they must be backed by copies of some document that proves ownership of the asset. iii) Detail of income and expenses, attaching copies of pay slips for the case of dependents, and supported cash flow for independents.

//17. R D. N° 72/2008)
2. Mortgage Guarantee of Real Estate:
a) Original of the appraisal prepared by an expert authorized by the BCB. b) Original of the public deed of ownership of the real estate offered as guarantee. c) Original of the real folio of Real Rights (RR.RR.) with an age not greater than fifteen (15) days from the submission of the request. d) Original of the payment of annual property taxes for the last five (5) fiscal years. e) Original of plans approved by the Honorable Municipal Mayor's Office (HAM). f) Original Unique Form of Cadastral Registration and certificate of line and level, in places where this registry exists. g) Original of approved subdivision plans, in horizontal property, when applicable. h) Original of the current all-risk insurance policy once the restructuring is approved, which must be subrogated in favor of the BCB.
3. Pledge Guarantee:
a) Original of the import policy, purchase invoice, or title of ownership. b) Original of the appraisal prepared by an expert authorized by the BCB. c) Original of the total coverage insurance policy current once the restructuring is approved, which must be subrogated in favor of the BCB.
4. Vehicle Guarantee:
a) Original of the ownership card. b) Original of the payment of taxes for the last five fiscal years. c) Original of the updated land certificate issued by the General Directorate of Transit. d) Original of the appraisal prepared by the expert authorized by the BCB. e) Original of the current insurance policy (total coverage), subrogated in favor of the BCB. f) Copy of the Mandatory Traffic Accident Insurance (SOAT). g) Original of the current all-risk insurance policy, subrogated in favor of the BCB.

//18. R D. N° 72/2008)
5. Guarantee of pledge bonds and securities:
a) Original of the security title once the restructuring is approved, which must be duly endorsed in favor of the BCB, and when applicable, registration in the shareholders' book. b) Original of the pledge bond once the restructuring is approved, which must be duly endorsed in favor of the BCB, and when applicable, registration in the shareholders' book.

Article 40.- Background of the restructuring contract.
In the background of the restructuring contracts, reference will be made to the original contract, indicating in detail its terms and conditions, as well as the settlement of the obligation (capital, current interest, penalties, and moratory interest) as of the date of the restructuring.

Conditions
Article 41.- Conditions.
Credit restructuring will be considered when:

1. The real guarantees are sufficient with a ratio of at least one to one, taking as a base 64% of the commercial value of the guarantee. For example:
   Credit Balance = $100
   Commercial Value of Real Guarantee = $157
   Minimum liquidable value = $100
2. In no case will the originally constituted guarantees be released. Nevertheless, the substitution of guarantees may be allowed, prior to evaluation and reports from the Financial Entities Management, the Legal Affairs Management, approval by the Committee by Minute, and that the value of the offered guarantee complies with point 1 of this article.
3. Personal guarantors must prove their solvency through asset declarations, demonstrating that they have sufficient movable and immovable assets to cover the total indebtedness with the financial entity and with the system.
4. The borrower must demonstrate having sufficient cash flow to meet its obligations with the financial entity and with the system. The borrower must present the relevant supporting documentation for said cash flows.
5. Restructuring will not be considered when the offered real guarantee presents or registers annotations or encumbrances in favor of third parties.

//19. R D. N° 72/2008)
Article 42.- Preparation of the restructuring document.
Once the restructuring is approved through the signing of the resolution issued by the Committee, the Financial Entities Management will request the Legal Affairs Management to prepare the respective restructuring contract in the terms and conditions approved by the Committee.

Article 43.- On the registration and accreditation of guarantees.
The constituted guarantees must be registered, and/or encumbered, and/or subrogated, and/or endorsed, as appropriate to their nature, by the borrower.
The borrower has the obligation to present to the Financial Entities Management the document that accredits the registration and/or encumbrance and/or endorsement and/or subrogation of the guarantees in favor of the BCB.

Article 44.- On the registration and enablement of restructured credits.
The Financial Entities Management will send to the Legal Affairs Management the documentation of the guarantees constituted and registered by the borrower, for its review and expression of conformity. With the conformity issued by the Legal Affairs Management, the Financial Entities Management will proceed to register and enable the restructured credit in the portfolio management system, where the new payment plan will be generated.

Article 45.- Validity of the Restructuring Contract.
The approved restructuring will take effect only from the registration and enablement of the restructured credit. The simple settlement of the restructured credit will not take effect by itself.

Article 46.- Term of the restructuring.
The term of a restructured credit may not exceed ten (10) years computable from the date of signing of the Contract duly registered and inscribed in the corresponding registries and offices; said restructuring may consider what is provided for in Art. 800 of the Code of Commerce.

Article 47.- Amortizations.
Restructurings will establish monthly, bimonthly, quarterly, or semi-annual amortizations. In no case will the amortizations be annual. Every amortization will be imputed first to the payment of interest and then to the payment of capital.

Article 48.- Other conditions.
The restructuring of the portfolio will also comply with the following conditions:

//20. R D. N° 72/2008)

1. The annual interest rate will be equal to the Reference Interest Rate (TRe) current in the currency of the credit, plus five percentage points.
2. Installments: Debtors may choose:
   a) Fixed installments, with variable amortization to capital and payment of interest on balances based on 360 commercial days. b) Variable installments, with fixed amortization to capital and payment of interest on balances based on 360 commercial days.

Article 49.- Expenses.
All expenses required for the restructuring of the credit will be at the expense of the borrower.

Article 50.- Attorney fees and judicial expenses.
Prior to the signing of the Restructuring Contract and in case the credit is in judicial execution, the fees corresponding to the external sponsoring lawyer and the judicial collection expenses must be paid in full by the borrower.

Restructuring of credit portfolio in the interior of the Republic
Article 51.- On the restructuring of credit portfolio in the interior of the Republic.
The process of credit restructuring that were originally granted in the branches of the former BBA in the interior of the Republic will be subject to the following:

1. The receipt of documentation for the restructuring of credits in the interior of the republic will be carried out in each district.
2. The approval of the restructuring will be carried out in the city of La Paz.
3. The procedure will be subject to the procedure established in this regulation.
4. The appraisal must be carried out by an expert authorized by the BCB.
5. All expenses required for the restructuring will be at the expense of the borrower.
6. Once the contractual restructuring is carried out, the borrower will make payments in the correspondent banks of the BCB, according to the payment plan that will be provided by the Financial Entities Management.

Follow-up on active credits
Article 52.- On follow-up.

//21. R D. N° 72/2008)
The Asset Recovery Department must carry out adequate follow-up on active credits, periodically evaluating the following:

1. Compliance with the payment schedule,
2. The economic and financial situation of the borrower
3. The situation of the guarantees.

Article 53.- On compliance with the payment schedule.
The Asset Recovery Department will periodically carry out an analysis of the borrower's compliance with the agreed payment schedule, leaving a record of it in the borrower's individual folder.

Article 54.- On the economic and financial situation of the borrower.
The financial information of the borrower will be kept updated, leaving a record of having verified that the cash flows presented before the restructuring adjust to the agreed payment plan.

Article 55.- On the situation of the guarantees.
The Asset Recovery Department must maintain reports of periodic visits on the conditions in which the real guarantees are found, including the control of the validity of insurance policies and the update of appraisals within a period not greater than twenty-four (24) months.

Article 56.- On non-compliance with the payment schedule.
In case of non-compliance with any of the installments of the restructured credits, the BCB is authorized to:

1. Initiate judicial collection, at 90 days of the restructured credit being overdue.
2. Receive in payment movable and immovable assets of easy realization, complying with what is established in Chapter IX of this Regulation.
3. Waive penal and moratory interest, only when the active borrower or pays the total of its credit.

CHAPTER VI
WAIVERS, WRITE-OFF, AND RELEASE OF GUARANTEES

Section 1
Criteria for the Waiver of Penal and Moratory Interest

//22. R D. N° 72/2008)
Article 57.- On the waiver of penal and moratory interest in Restructured Credits.
The Committee will authorize the waiver of penal and moratory interest for restructured credits.

Article 58.- Waiver of penal and moratory interest.
The Financial Entities Management will carry out the waiver of penal and moratory interest when the debtor pays the total of its credit or regularizes the payment of pending installments.

Section 2
Portfolio Write-off

Article 59.- Portfolio write-off.
The write-off of credits will be subject to what is established in the specific regulation for credit write-off approved by the Board of Directors of the BCB and will be reported to the Committee in the specific form for this effect (Annex B).

Section 3
Substitution and Release of Guarantees

Article 60.- Substitution and release of guarantees.
The substitutions or releases of guarantees will be carried out under the principle of maintaining or improving the security of the credit. They will apply to all categories of credits and whose capital balance is covered with real guarantees in a one-to-one proportion, taking as a base 64% of the commercial value of the guarantee. Regarding personal guarantees, these may only be substituted with mortgage or pledge guarantees.

Article 61.- Administrative procedure.
For the substitution or release of guarantees, the same administrative procedure established in article 41 of this Regulation will be followed.

Article 62.- Update of information of debtors and guarantors.
In the forms of Annexes I, II, III, IV, and V, debtors and guarantors will update their personal data which will have the value of sworn declaration and will be subject to verification by the BCB, which refer to:
I. Restructuring, release or substitution of guarantees and dation in payment.
II. Employment verification, for dependents
III. Address verification
IV. Sworn declaration of assets, income, and expenses

//23. R D. N° 72/2008)
V. Sworn Health Declaration
Section 4
Transmission of Obligations
Article 63 - Approval of the transmission of obligations
The Committee may consider and approve applications from debtors, guarantors, or third parties regarding the transmission of obligations as defined in the Civil Code and Commercial Code. These modalities will be accepted provided that the legal requirements established for each of the modalities in the cited norms are met, and, where applicable, the requirements established for the restructuring of credits set forth in this Regulation.

CHAPTER VII
SUPERVISION AND EVALUATION OF CREDIT PORTFOLIO
Article 64.- Supervision and evaluation of portfolio.
Credits will be supervised and evaluated by the Financial Entities Management, in accordance with what is established in this regulation and the Circulars of the SBEF.

Article 65.- On the classification of reprogrammed credits.
For the classification of credits, the parameters established by Circulars of the SBEF will be adopted as valid.

1. The classification of the consumer credit portfolio will be performed automatically by the Credit Portfolio Management System under the Financial Entities Management.
2. The classification of the commercial credit portfolio will be performed manually, which must be approved by the Committee, based on the technical-legal reports to be presented by the Financial Entities Management and Legal Affairs, attaching the respective background and financial evaluation form (Annex A).
3. Reprogrammed credits will maintain the risk category corresponding to the moment of their reprogramming. For credits reprogrammed under Law 2297, at the express request of the borrower, a reclassification may be carried out, which must be approved by the Committee.

Article 66.- Follow-up on compliance with the payment plan of the current credit portfolio.

//24. R D. N° 72/2008)
The Asset Recovery Department will follow up on compliance with the payment plan of current credits. To this end, it will prepare a monthly report on the behavior of said portfolio.

CHAPTER VIII
Insurance
Article 67.- On all-risk insurance.
Mortgage, pledge, or warrant guarantees must have all-risk or specific risk insurance policies in accordance with the contract. The Committee will define the pertinence of the insurance to be contracted in the restructuring of credits. All policies will be endorsed in favor of the BCB, and their cost of validity and renewal will be borne by the borrower. The control of the validity of the policies will be the responsibility of the Sub-Management of Recovery and Realization of Assets. In those cases where the insurance policies of the guarantees were being paid by the former BBA and the former Mandatario Banco Mercantil Santa Cruz S.A., regardless of the state of the credit, the Issuing Entity will continue to pay said policies considering the outstanding balance to capital until the auction of the guarantee, proceeding to the adjudication thereof either by the BCB or a third party.

Article 68.- Mortgage Insurance. (Modified in accordance with Article 1 of Chapter X "Final Provisions" of this Regulation and within the framework of the decision of "Point Two" of Act No. 07/2009 of the Recovery and Realization of Assets Committee of Direct Administration dated April 24, 2009)
Credits must maintain the valid mortgage insurance policy in accordance with the contract, and its cost of validity will be borne by the borrower. For those borrowers whose credits are in a current or overdue state up to 90 days and whose mortgage insurance coverages were being paid by the former BBA and/or the former Mandatario Banco Mercantil Santa Cruz S.A., the Issuing Entity will continue to pay said policies while they remain in this state. The control of the validity of the mortgage insurance policies will be the responsibility of the Sub-Management of Recovery and Realization of Assets.

Article 69.- On the valuation of guarantees.
Due to the fact that the value of the guarantees must be established considering the amount that would be obtained in their execution, the following will be taken into account:

1. When a mortgage or pledge is of first degree, it must be computed at its net realization value. In addition, the percentage of technical depreciation from the date of the last appraisal must be deducted.
2. To establish the estimated sale value and the schedule of expected technical depreciation of the asset during the validity of the credit or reprogramming, appraisers will be consulted.
3. When valuing goods received as collateral, the prices at which transactions of goods with similar characteristics and conditions are effectively carried out at the time of the credit reprogramming or release of guarantees, as applicable, must be taken into account.

CHAPTER IX
PAYMENT IN KIND
Article 70.- On payment with a performance other than that due.
In the event of non-payment of the credit, the Committee may accept or reject proposals for total payment with a performance other than that due for capital and interest, with movable and immovable goods granted as collateral or others, with the exception of perishable goods or those of difficult realization. Goods offered as payment must have legal documentation in order and taxes paid up to date, if applicable. Likewise, they must be free of liens or debts, settlements, and possession by third parties, meaning the cleaning process must be concluded. In all cases, the borrower will grant the guarantee of eviction and legal cleaning. Rural goods must comply with the specific current regulations.

Article 71.- On the appraisal of goods.
The goods offered in dation in payment will be subject to appraisal, carried out by an expert authorized by the BCB. The fees of the experts will be paid by the borrower.
The General Manager, as the highest administrative authority of the BCB, will inform the SBEF about those appraisers whose expert appraisal presents irregularities, in order for them to be incorporated into the register of disqualified appraisers for performing expert reports in financial entities.

Article 72.- On the value accepted in payment.
The value accepted by the BCB in payment for goods offered will be equivalent to 60% of the commercial value of the appraisal performed.
In the signing of the document of payment with a performance other than that due, the acceptance of the intervening parties to the appraisal practiced and to the value accepted in payment must be recorded. In no case will the BCB recognize price differences.

Article 73.- On the taxes and expenses of the transfer.
The expenses and taxes arising from the document or contract of payment with a performance other than that due, notarization, and those resulting from the transfer of the goods in favor of the BCB, will be entirely borne by the borrower, which must be expressly established within the dation in payment document. If the dation in payment were to be carried out on credits that are under judicial execution, prior to its formalization, the borrower must pay the professional fees, as well as reimburse all judicial and notarial expenses incurred during the judicial execution.

CHAPTER X
FINAL PROVISIONS
Article 1.- On modifications
Future modifications to this Regulation and its Annexes must be approved by the Recovery and Realization of Assets Committee of Direct Administration, by express resolution, without the need for any other requirement.

Article 2.- On preferential application
The provisions contained in this regulation will be of preferential application to the norms issued by the SBEF.

Article 3.- Validity
This regulation will enter into force from the date of approval by the Board of Directors of the BCB and will replace the Regulation for the Administration and Recovery of Credits of the former BBA S.A. approved by R.D. 045/2007.

//27. R D. N° 72/2008)
BANCO CENTRAL DE BOLIVIA ANNEX A
FINANCIAL ENTITIES MANAGEMENT
SUB-DEPARTMENT OF RECOVERY AND ASSET REALIZATION DIRECT ADMINISTRATION OF ASSETS RECEIVED IN DATION IN PAYMENT EX BBA BACKGROUND AND FINANCIAL EVALUATION EXCHANGE RATE:
APPLICANT NAME: DATE BRANCH
OPERATION NO. DESCRIPTION OF OPERATION Amount of Restructured Credit BS. $US

OPERATION TYPE OBJECT:
TOTAL REQUESTED TO RESTRUCTURE
CODE GUARANTEE GUARANTEES ORIGINALLY CONSTITUTED COM. VALUE LIQUIDABLE VALUE BS. $US.
Credit Balance:
IPN Real Commercial Value of Guarantee:
Minimum Liquidable Value
TOTAL VALUES OF GUARANTEES
CARRYOVER BALANCES OF GUARANTEES FOR THIS OPERATION PERSONAL GUARANTEES ID CARD: TELEPHONES:
ADDRESS: WEALTH DECLARATIONS:
APPLICANT DATA CLIENT CODE
ID CARD: TELEPHONES:
ADDRESS: SUFFICIENT FLOW:
RESTRUCTURING SUMMARY
Maturity Date:
Amortizations: monthly bimonthly quarterly semi-annual Interest Cancellation:
Capital Cancellation:
Interest Rate:
CIRC Data:
Approval Follow-up:
Restructuring Conditions:
APPRAISALS AND UPDATE OF GUARANTEES
TOTAL VALUES OF GUARANTEES:
TOTAL VALUES OF NEW GUARANTEES:
CARRYOVER BALANCE OF OLD GUARANTEES:
COVERAGE OF GUARANTEES FOR THIS
OPERATION:
PREPARED BY: APPROVAL:
Recovery and Realization of Assets Committee of Direct Administration

//28. R D. N° 72/2008)
BANCO CENTRAL DE BOLIVIA ANNEX B
FINANCIAL ENTITIES MANAGEMENT Form for Portfolio Write-off SUB-DEPARTMENT OF RECOVERY AND ASSET REALIZATION DIRECT ADMINISTRATION OF ASSETS RECEIVED IN DATION IN PAYMENT EX BBA WRITE-OFF OF CREDIT PORTFOLIO ALL FIGURES ARE EXPRESSED IN US DOLLARS DETAILED DESCRIPTION OF THE OBJECT PURPOSE OF THE OPERATION Pre-Liquidation to Date: Capital $us Accrued Interest $us Penalty Interest $us Judicial Expenses $us Fees $us TOTAL $us TOTAL OBLIGATIONS IN THE FINANCIAL SYSTEM OF THE APPLICANT AT:

BANKS:
TOTAL
BACKGROUND AND FINANCIAL POSITION
ACTIVITY
Client seniority in the sector:
Main Shareholders or Partners:
Main Executives and Experience:
Seniority as Bank Client:
Maximum Risk Reached
ESTIMATES AT: TOTAL ASSETS TOTAL LIABILITIES TOTAL EQUITY ADJUSTED EQUITY TOTAL COMMENTS:
BORROWER INDICES
Liquidity:
Leverage: (Liability/Equity)
Profitability: (Net Profit/Equity)
Gross Sales
Cost of Sales + Admin Costs
Net Profit or Loss
NET FLOW:
ACCUMULATED FLOW:
Notes:
COMMENT ON THE REMAINING GUARANTEES FOR THE BALANCE OF THE OPERATION

Notes:
COMMENT ON THE REMAINING GUARANTEES FOR THE BALANCE OF THE OPERATION

RECOMMENDATIONS:
NAME AND SIGNATURE OF RESPONSIBLE OFFICER: APPROVAL:
Recovery and Realization of Assets Committee of Direct Administration

//29. R D. N° 72/2008)
BANCO CENTRAL DE
BOLIVIA ANNEX C
LEGAL AFFAIRS MANAGEMENT
SUB-DEPARTMENT OF LEGAL AFFAIRS

DIRECT ADMINISTRATION OF ASSETS RECEIVED IN DATION IN PAYMENT EX BBA BACKGROUND AND FINANCIAL EVALUATION
DISTRICT ..........................
DETAIL OF CREDITS WITH LEGAL ACTIONS
(expressed in dollars)
No. TYPE OF TYPE OF AMOUNT AMOUNT
O DATE MONTHLY REPORT
MONTHLY REPORT
No. OPERATION
LAWYER
CREDIT
TYPE OF
GUARANTEE PROCESS
DEBTOR
ORIGINAL DEFENDANT
START
LAWSUIT
Mm(prev)/y to mm(curr)/ y
COURT/ NO.
OF
FILE

//30. R D. N° 72/2008)
INSTRUCTIVE - ANNEX D
GUIDELINES FOR THE EXECUTION OF CREDITS EQUAL TO OR LESS THAN $US1,000.- For credits with outstanding capital balance equal to or less than $US1,000.-, the Financial Entities Management must financially evaluate the initiation of judicial actions, considering the recoverability of expenses to be incurred in said actions, and the benefit obtained in the recovery of the delinquent credit, elevating to the consideration of the Recovery and Realization of Assets Committee of Direct Administration, as a general rule, a report that considers the alternatives of write-off or initiation of judicial actions that represent the greatest benefit or the lowest cost, according to the following:

• The present value of the net cost of judicial recovery over three years must be estimated with respect to the capital amount at the date of analysis.
• The annual discount rate to be used will be 5.35%, corresponding to the LIBID rate on 11/20/2006 (One-year LIBOR rate minus 0.125 percentage points).
  Example:
  If to write off a loan today with an outstanding capital balance of $US1,000.-, the alternative is to execute the credit with a net cost of capital of $US1,300.- after three years, it is established that the first option is less costly because the present value of the second alternative is $US1,092.-, using an annual discount rate of 6%.
• ° -

//31. R D. N° 72/2008)
ANNEX 2
REGULATION FOR WRITE-OFF OF CREDITS FROM THE PORTFOLIO OF THE FORMER BBA, RECOVERY TREATMENT AND REMOVAL FROM THE FINANCIAL STATEMENTS OF THE BCB
CHAPTER I
GENERALITIES
Article 1. Object and scope of application.-
This Regulation aims to regulate the write-off of credits received in dation in payment from the former Banco Boliviano Americano S.A. (ex BBA), under direct administration of the Central Bank of Bolivia (BCB), as well as the recovery and removal of said credits from the financial statements of the Issuing Entity.

Article 2. Write-off of Credits, its Registration and Right to Collection.-
The write-off of a credit is an accounting transaction, consisting of giving the treatment of loss to an amount originally registered as an asset. To this effect, every written-off credit must be registered in off-balance sheet accounts of the BCB's financial statements. The write-off of a credit does not extinguish nor affect the rights of the BCB to exercise extrajudicial and judicial collection, except in those cases in which the entity has lost the right to collect due to legal prescription declared by a judicial authority.

CHAPTER II
WRITE-OFF OF CREDITS
Article 3. Requirements for the write-off of Credits.-
For the write-off of credits, the fulfillment of the following requirements is required:
a) Delinquency of the credit for more than 365 calendar days. b) Provision of 100% of the credit c) The verification of any of the causes for write-off, described in the following article.

Article 4. Causes for Write-off of Credits.
The write-off of credits will proceed when any of the following causes is verified:
a) Credit that is not backed by any type of specific guarantee constituted or is only backed by personal guarantees.

//32. R D. N° 72/2008) b) Existence of documents evidencing that seizures of goods or retention of funds or values have not been achieved, or that those obtained have proven insufficient to fully recover the credit. c) When the realizable value of the goods registered in the name of the debtor or guarantors is lower than the judicial expenses and costs to be incurred for their recovery. d) Existence of credits with outstanding capital balance less than or equal to $US1,000.- or its equivalent in bolivianos. e) Existence of uncollectable balances within civil executive and coercive processes that due to legal limitations and/or the non-existence of other guarantees make the continuation of collection unviable. f) Non-existence of credit document, deficient or damaged documents that prevent judicial collection through executive or coercive channels, or when the right to collect has been extinguished by prescription. g) Credits with legal actions initiated in which movable and immovable goods are annotated preventively or mortgaged judicially and that cannot be physically obtained.

Article 5. Approval of Write-offs.-
The write-off of a credit will be approved by the Recovery and Realization of Assets Committee of Direct Administration, prior to verification of the fulfillment of the requirements established in Article 3 of this Regulation, based on the consideration of the following information:
a) For the write-off of credits whose outstanding amount or uncollectable capital balance of a borrower is less than or equal to $US1,000.- or its equivalent in bolivianos at the date of preparation of the technical report, the Financial Entities Management will present to the Committee a technical report containing the general data of the credit, the situation of the debtor in the financial system, the outstanding capital and interest balances, specific provision constituted, and the state of the guarantees. b) For the write-off of credits whose outstanding amount by borrower or uncollectable capital balance is greater than $US1,000.- or its equivalent in bolivianos, the following will be presented to the Committee:
i. Technical report prepared by the Financial Entities Management, in accordance with what is provided in the preceding letter a).
ii. Legal report prepared by the Legal Affairs Management, which must contemplate the analysis of the following documents:

//33. R D. N° 72/2008)

• Report from the lawyer in charge of the case recommending the write-off identifying the cause, attaching as applicable copies, testimonies, edicts, rulings, resolutions, judgments, and any other documents from the proceedings that evidence that the trial has a final judgment.
• Certificate from the respective Court evidencing that seizures of goods or retention of funds or values have not been achieved.
• Transit Certificates, Real Rights, Telephone Cooperatives, Fundampresa, accrediting that they do not register goods or shares in the name of the debtors or guarantors.

Article 6.- Post-write-off procedure of credits.-
Once the write-off of credits is approved, it corresponds to the Financial Entities Management to carry out the following tasks:
a) Register the write-off of the credit against the provisions constituted, removing it from the assets of the BCB and registering it in the respective off-balance sheet accounts. b) Report the written-off credits to the Information and Credit Risk Central (CIRC) of the Superintendence of Banks and Financial Entities, in accordance with the current regulations to that effect. c) Semi-annual report of the Recovery and Realization of Assets Committee of Direct Administration to the Board of Directors of the BCB, regarding the write-offs of credits carried out.

Article 7.- Obligation to Interrupt the Prescription of Credits.
Considering that the write-off does not extinguish nor affect the right to collect of the BCB, the Financial Entities Management will annually publish in written media of national circulation the written-off credits.

Article 8.- Payment of professional fees for lawyers.
Once the write-off of credit is approved, the payment of professional fees to the lawyer will be made in accordance with what is established in the respective Professional Fee Scale. In case the Fee Scale does not stipulate the amount of professional fees for write-off, the Legal Affairs Management will make an Addendum to the professional fee scale considering the following scale:

//34. R D. N° 72/2008)
WRITTEN-OFF CAPITAL PER CREDIT AMOUNT
Up to $US10,000 $US50.-
From $US10,001 to 100,000 $US100.-
From $US100,001 onwards $US200.-
Once the professional fees are paid, the Legal Affairs Management will request the professional transfer, as well as the return of the judicial case file for its transmission to the Financial Entities Management and its subsequent archiving.

CHAPTER III
RECOVERY OF WRITTEN-OFF CREDITS
Article 9.- Reprogramming of Written-off Credits.
Under favorable conditions for the BCB and prior approval of the Recovery and Realization of Assets Committee of Direct Administration, a written-off credit may be subject to reprogramming.

Article 10.- Considerations for the reprogramming of written-off credits.
The reprogramming of written-off credits, where pertinent, will be subject to the provisions for the restructuring of credits provided in the Regulation for the Administration and Recovery of Credit Portfolio of the Ex. Banco Boliviano Americano S.A., considering the following:
a) Written-off credits subject to reprogramming 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 said reprogramming. b) The reprogramming of credits will proceed when the real guarantees are sufficient with a ratio of at least two to one of the amount to be reprogrammed, based on the Commercial Value of the guarantee. The offered guarantees must be properly cleaned. c) The written-off credits to be reprogrammed must recognize the outstanding capital balance and current interest recalculated at the TRE rate plus five points (5%) at the effective date of reprogramming. Likewise, the capitalization of interest will proceed, as established. d) Written-off credits will be reincorporated into the assets of the BCB with a provision of 100%.

//35. R D. N° 72/2008) e) The reprogramming of written-off credits that have previously been reprogrammed under Law 2297 will not proceed.

Article 11.- Payment of Written-off Credits.
Any written-off credit may be paid by the debtor, guarantor, or interested third parties, considering the amount of written-off capital. Payments may be as follows:

OUTSTANDING CAPITAL BALANCE WRITTEN-OFF CREDIT PAYMENTS TO BE MADE BY BORROWERS, GUARANTORS OR INTERESTED THIRD PARTIES Less than or equal to $US1,000 In a single payment 50% of the outstanding capital balance, forgiveness of 50% of capital and 100% of current interest, penalties, judicial expenses, and lawyer fees. Greater than $US1,000 and less than or equal to $US 5,000 In a single payment 100% of the outstanding capital balance, forgiveness of 100% of current interest, penalties, judicial expenses, and lawyer fees. Greater than $US5,000 In a single payment, 100% of the outstanding capital balance and interest recalculated at the current TRE rate at the date of payment, forgiveness of penalty interest, judicial expenses, and lawyer fees.

Article 12.- Recovery of Written-off Credits.
Sums recovered after the write-off of a credit must be considered as income of the BCB at the moment they are received.

CHAPTER IV
REMOVAL OF CREDITS FROM FINANCIAL STATEMENTS
Article 13.- Removal of Credits from Financial Statements.
The removal of a written-off credit will proceed when it is declared prescribed, declared by a judicial authority.
In these cases, the Legal Affairs Management must present to the Recovery and Realization of Assets Committee of Direct Administration, a report from the lawyer in charge that accredits the prescription declared by a judicial authority, which will accompany the corresponding judicial resolution.

Art. 14. Operational Procedure:
The removal of a credit from the financial statements of the Central Bank of Chile (BCB) and its subsequent treatment will follow the following procedure:
a) The Legal Affairs Department will send to the Financial Entities Department the judge's sentence declaring the credit prescribed. b) The Financial Entities Department will record the removal of the credit from the financial statements of the BCB. c) The Financial Entities Department will remove the credit from the records in the Credit Information and Risk Central (CIRC) of the Superintendence of Banks and Financial Entities, in accordance with current regulations. d) The Financial Entities Department will proceed with the respective archiving of the credit.