Resolution 077/2000

BOARD RESOLUTION NO. 077/2000 SUBJECT: FINANCIAL ENTITIES MANAGEMENT – APPROVES MODIFICATIONS TO THE REGULATION ON PORTFOLIO ADMINISTRATION AND SALE OF ASSETS, APPROVED BY BOARD RESOLUTION NO. 101/99.

HAVING SEEN:

The Law of the Central Bank of Bolivia No. 1670 of October 31, 1995, Article 38, subsection d). The Board Resolution No. 093/99 of October 15, 1999. The Board Resolution No. 101/99 of November 23, 1999. The Administration Mandate Contract dated December 1, 1999. The Report from the Financial Entities Management GEF 237-171/00 of October 18, 2000. The Report from the Legal Affairs Management GAL No. 019/2000 of October 23, 2000.

CONSIDERING:

That the decline in the pace of economic activity in the country has had adverse effects on the payment capacity of debtors in the national financial system and has led to the expansion of restructuring measures by the Government.

That the asset recovery regulation, which forms part of the administration mandate contract signed with BME, establishes a five-year term for portfolio restructuring.

That many debtors from the portfolio owned by the BCB, received in lieu of payment from the intervened Boliviano Americano Bank S.A. for forced sale, and delivered in administration mandate to Banco Mercantil S.A., have requested restructuring of their credits for terms greater than five years.

That the Financial Entities Management, in its report GEF No. 237-171/2000, considers it reasonable to attend to the request of said borrowers regarding credit restructuring terms.

That in the opinion of the Legal Affairs Management, in accordance with subsection o) of Article 54 of the Law of the Central Bank of Bolivia No. 1670, the Board has the authority to interpret and modify its provisions and authorize amendments and/or changes to its service and administration contracts.

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

Article 1.- Modify Articles 8 and 27 of the Regulation on Portfolio Administration and Sale of Assets, approved by Board Resolution No. 101/99, in the following terms:

SAYS: Article 8.- The Mandatary is authorized, within the framework of its internal norms and regulations, to take the decisions it deems necessary regarding the collection management of all those credits whose debtor balance in capital is equal to or less than FIFTY THOUSAND 00/100 DOLLARS OF THE UNITED STATES OF AMERICA (US$ 50,000.00) or its equivalent in national currency per client.

SHOULD SAY: “Article 8.- The Mandatary is authorized, within the framework of its internal norms and regulations, to take the decisions it deems necessary regarding the collection management of the portfolio of all those credits whose debtor balance in capital is equal to or less to ONE HUNDRED FIFTY THOUSAND 00/100 DOLLARS OF THE UNITED STATES OF AMERICA (US$ 150,000.00) or its equivalent in national currency per client.”

SAYS: Article 27.- Restructuring may not agree on a maturity date for the obligation that extends beyond the five (5) year term established for the Administration Mandate Contract.

SHOULD SAY: “Article 27.- Restructuring may not agree on a maturity date for the obligation that extends beyond the ten (10) year term computable from the signing of the Administration Mandate Contract. Restructuring may consider what is provided for in Article 800 of the Commercial Code.”

Article 2.- Authorize the Presidency to sign an Addendum to the Administration Mandate Contract signed with Banco Mercantil S.A. dated December 1, 1999, which contains the modifications indicated in Article 1 of this Resolution.

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

La Paz, October 24, 2000

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Armando Pinell S.

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Jaime Ponce G. Juan Medinaceli V.

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Fernando Campero P. Armando Méndez M.