Resolution 083/2001

BOARD RESOLUTION NO. 083/2001 SUBJECT: FINANCIAL ENTITIES MANAGEMENT – RESTRUCTURING OF PORTFOLIO WITHIN THE ADMINISTRATION MANDATE OF BANCO MERCANTIL S.A.

HAVING SEEN: Law 1670 of October 31, 1995 Law 2196 of May 4, 2001 Supreme Decrees 26195, 26204, and 26254 of May 24, June 1, and July 20, 2001, respectively. Presidential Resolution of the BCB No. 09/99 of November 5, 1999. Board Resolution No. 101/99 of November 23, 1999. The Report from the Financial Entities Management GEF-SRRA No. 292/2001 of August 17, 2001. The Internal Communication from the Legal Affairs Management SAJU No. 924/2001 of July 27, 2001.

CONSIDERING: That through Article 1 of Law 2196, the Special Fund for Economic Reactivation (FERE) is created in favor of the productive, services, commerce, and consumption sectors, whose purpose is the restructuring of their portfolio within the national financial system, aiming to achieve better conditions for economic development.

That Article 4 of the aforementioned Law establishes that the resources obtained for the FERE will be administered by Bolivian National Financial Corporation SAM (NAFIBO) and exclusively allocated to the execution of the restructuring of financial liabilities of the aforementioned sectors. NAFIBO will allocate FERE resources in favor of financial intermediation entities with a license from the Superintendence of Banks and Financial Entities (SBEF), through financing lines with a term of no less than 12 years, including a two-year grace period for principal.

That Article 5 of said Law establishes that financial entities that access the FERE must restructure the credits of their borrowers corresponding to the productive, services, commerce, and consumption sectors, which have payment capacity and whose credits are classified in any of the risk categories, according to the Regulation for the Evaluation and Classification of Credit Portfolios, for a term of no less than 8 years, including a 2-year grace period for principal for the productive, commerce, and services sectors, and a term of no more than 4 years, including a maximum of 1 year of grace for principal for the consumption sector; it may include the restructuring of accrued and unpaid current interest along with the principal.

That through Board Resolution No. 101/99, the Board of Directors of the BCB approved the Regulation for Portfolio Administration and Asset Sale to regulate the management of assets transferred under an Administration Mandate to Banco Mercantil S.A.

That through Banco Mercantil S.A., requests have been received from borrowers of the portfolio under the Administration Mandate to benefit from Law 2196, with a principal balance of $us. 9.84 million, arguing the difficult economic situation facing the Bolivian economy.

That, by not obtaining resources from the Special Fund for Economic Reactivation, the BCB does not adhere to what is established by Law 2196 regarding the restructuring of the portfolio delivered under the Administration Mandate to Banco Mercantil S.A.

That the Administration Mandate Contract and the Regulation for Portfolio Administration and Asset Sale, which forms part of it, differ from what is stipulated by Law 2196 regarding portfolio restructuring in terms of interest rates and grace periods for principal.

That in the opinion of the Financial Entities Management, maintaining the conditions of the Regulation for Portfolio Administration and Asset Sale could lead to the non-regularization of the overdue portfolio in the short term, tending toward said portfolio passing to judicial execution with the corresponding legal and operational costs.

That the Legal Affairs Management concludes that the Board of Directors of the BCB, with the authority granted by Article 54, subsection q) of Law 1670, is the only authority that can adopt the determinations that are convenient for the interests of the BCB regarding the credit portfolio it received by way of assignment from the former Bolivian American Bank S.A.

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

Article 1.- Authorize the restructuring of the portfolio received in dation in payment from the former Bolivian American Bank S.A. and transferred under an Administration Mandate to Banco Mercantil S.A., under the following conditions: • 2 years of grace for principal for the restructuring of commercial credits and one year of grace for consumer credits. • Annual interest rate of 12%. • The term of the restructuring may not exceed the average term obtained by the debtor in the restructuring of their debts with the financial system, nor may it be greater than eight years.

Article 2.- Banco Mercantil S.A., as Agent of the BCB, will restructure the portfolio under the conditions established in Article 1 of this Resolution, only at the request of the borrowers and after they have restructured or regularized all their overdue obligations with entities authorized by the Superintendence of Banks and Financial Entities, under the terms of Law 2196.

Article 3.- Authorize the President of the BCB to sign an Addendum to the Administration Mandate Contract signed between the BCB and Banco Mercantil S.A. dated December 1, 1999, which contains what is established in Articles 1 and 2 of this Resolution.

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

La Paz, August 21, 2001

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Juan Antonio Morales A.

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Armando Pinell S. Jaime Ponce G.

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Juan Medinaceli V. Armando Méndez M.