Resolution 085/98: Regularization of Pending National Currency Loans Without Value Maintenance Clauses

BOARD RESOLUTION NO. 085/98
SUBJECT: FINANCIAL SYSTEM - REGULARIZATION OF PENDING LOANS TO BE COLLECTED IN NATIONAL CURRENCY WITHOUT VALUE MAINTENANCE CLAUSE.

VIEWED:
Law No. 1670 of October 31, 1995.
Articles 415 of the Civil Code and 1333 of the Commercial Code, which authorize specific regulations for banking interest and interest on special credits.
Supreme Decree No. 21777 of December 1, 1987.
Supreme Decree No. 21660 of July 10, 1987.
Law No. 901 of November 28, 1986.
Supreme Decree No. 21060 of August 29, 1985.
Board Resolutions 117/84 of 06/28/84; 024/85 of 02/26/85; 236/85 of 09/27/85; 310/85 of 11/06/85; 364/85 of 11/29/85; 383/85 of 12/06/85; 172/86 of 04/03/86; 297/86 of 06/27/86 and 321/86 of 07/23/86, regarding passive interest rates for refinanced loans to the private sector. Technical circulars issued by the BCB: 22-057-85 of 09/23/85; 22-78-85 of 12/12/85; 22-12-86 of 04/21/86; 22-018-86 of 06/20/86 and 22-026-86 of 07/30/86, which set interest rates and financing structure in refinanced credits from the Central Bank of Bolivia, granted in national currency without value maintenance. Report No. 092/96 of the Financial System Management of April 14, 1998. Legal Advisory Report No. ALEG. No. 201/98 of June 3, 1998.

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CONSIDERING:
That the Balance Sheet of the BCB records credits pending recovery under the Financial System Management regarding credits granted in national currency without value maintenance between the years 1980 to 1986, originating from resources of the Development Programs of the lines: IDB 35/IC-BO, IDB 549/SF-BO, FRA I, FRA II, FRI, Supreme Decree No. 07911, IDB 712, Agroenterprises and Crafts, as well as Own Resources of the Central Bank of Bolivia.

That there are observations from both the Comptroller General of the Republic and the Internal Audit of the Central Bank of Bolivia, regarding the portfolio balances in national currency without value maintenance, which were not collected in a timely manner.

That according to the analyzed background, on different dates and years, the Boards of the Bank set interest rates for development credits and the Administration did not proceed with the coercive collection of pending loans, with balances remaining in arrears for many years that must now be regularized.

That for the aforementioned purpose, the recovery of the portfolio of credits granted during the cited period must proceed, avoiding financial losses that affect the equity of the BCB.

That it is necessary to determine the capital and interest of the portfolio of credits in national currency without value maintenance, for their reconciliation and subsequent collection from the Banks of the System that maintain these obligations with the BCB.

That the collection of the credits must be adapted and framed within the interest rates established in the Board Resolutions and Circulars, in the indicated period, as well as the legal provisions governing credit intermediation activity.

That pursuant to Supreme Decree No. 21777 of December 1, 1987, credits in national currency without value maintenance can be rescheduled according to the terms and conditions determined by the BCB Board.

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That according to the Legal Advisory Report ALEG No. 201/98, based on the provisions related to the setting of interest rates, the BCB Board is authorized to approve a decision in this matter within the current legal framework.

THEREFORE

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Instruct the General Management and the Financial System Management to carry out the collection actions corresponding to the credits that were granted in national currency without value maintenance, applicable to unpaid balances in the credit lines identified in the accounting records.

Article 2.- The application of interest will be carried out in accordance with the regulations established by the BCB in the periods identified in Report No. 092/98 of the Financial System Management, which governed credits granted in national currency without value maintenance, considering the date of disbursement or last collection of the loan and the validity dates of the interest rates according to the following relationship:

PERIOD BCB RATE ICI SUBP. INTERESTS
Before February 28, 1985

• Peasant Agricultural
• Agricultural and Industrial Enterprises
  Between March 1, 1985 and July 31, 1986
• All sectors
  From August 1, 1986 to date
• All sectors
  64% 30% 45%
  90% 20% 110%
  65% 20% 110%
  48%

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

La Paz, September 8, 1998

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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. Fernando Campero P.