Resolution 088/97 - Liquidity Loan to BHN Multibanco S.A.

BOARD RESOLUTION NO. 088/97
SUBJECT: FINANCIAL SYSTEM - LIQUIDITY LOAN TO BHN MULTIBANCO S.A. UP TO USD 15,000,000.

HAVING SEEN:
Law No. 1670 of the Central Bank of Bolivia (BCB) dated October 31, 1995.
Board Resolution No. 148/95 dated November 23, 1995.
The Regulation to Address Temporary Liquidity Needs of the Financial System, approved by Board Resolution No. 025/94 dated February 17, 1994.
The Note from BHN MULTIBANCO S.A. GG-008/97 dated February 26, 1997.
The Note from the Superintendence of Banks and Financial Entities SB/IS2 8941 dated February 27, 1997.
The Report from the Financial System Management No. GSF-054/97 dated February 27, 1997.
The Report G-AL No. 041/97 from the Legal Affairs Management dated February 28, 1997.
Act No. 08/97 of the Financial Assistance Administration Committee (CADAF) dated February 28, 1997.

CONSIDERING:
That BHN MULTIBANCO S.A. has requested a credit from the BCB, via note GG-008/97, to address temporary liquidity needs due to a decline in its deposits, and because, having exhausted all efforts within its reach, it has no other financing alternatives for the stated purpose, also manifesting that this situation could jeopardize the success of its Patrimonial Strengthening Plan currently undergoing readjustment and adjustment by FONDESIF.

That in Act No. 08/97 of February 28, 1997, the favorable opinion of the Financial Assistance Administration Committee (CADAF) for the granting of the aforementioned liquidity credit appears.

That according to the Report from the Financial System Management, the requesting entity has no pending liquidity credits to pay and meets the equity requirements established in Article 47 of the Law of Banks and Financial Entities.

That according to the Report from the Legal Affairs Management, there is no legal impediment to processing the request of BHN MULTIBANCO S.A.

That Article 36 of the Law of the Central Bank of Bolivia No. 1670 of October 31, 1995, in duly justified and qualified cases by its Board of Directors, by an absolute majority of votes, authorizes the BCB to grant liquidity credits to banks and financial intermediation entities.

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

Article 1.- Grant a liquidity credit to BHN MULTIBANCO S.A., in accordance with the requirements established in the Regulation to Address Temporary Liquidity Needs of the Financial System and the Law of the Central Bank of Bolivia No. 1670 of October 31, 1995, under the following conditions:

Amount: Up to the sum of USD 15,000,000.
Currency: United States Dollars.
Interest Rate: 15.69% annual, the average active rate of the system for 30 days, in foreign currency (United States Dollars), prevailing in the market during the week of February 17 to 21, 1997.
Term: 30 days.
Amortization: Single payment at maturity.
Guarantees: Credit portfolio with own resources of BHN MULTIBANCO S.A., prioritizing those with rating 1 (normal) following the criteria of the Superintendence of Banks and Financial Entities, which should have real guarantees if possible, and whose maturities are greater than 30 days and less than 360, computable from the date of credit disbursement. The temporary assignment of credit will be documented through a contract. The sum of the guarantees must be equivalent to twice the amount of the credit. Automatic debit in its current accounts and legal reserve that it maintains at the BCB.

Article 2.- Disbursements will be made in foreign currency and/or national currency at the selling exchange rate of the United States dollar on the date of disbursement, upon written request justifying the liquidity need of BHN MULTIBANCO S.A., through credits in the Foreign Currency and/or National Currency Current Accounts that it maintains at the BCB.

Article 3.- In accordance with what is provided in Article 8 of the Regulation to Address Temporary Liquidity Needs of the Financial System, BHN MULTIBANCO S.A. must send daily to the Central Bank of Bolivia, through the Financial System Management, the following information:
a) Current and delinquent portfolio (consolidated). b) Public deposits by class of deposits (consolidated). c) Passive rates by class of deposit. d) Daily projected liquidity flow for the next 7 days, including obligations with the public, portfolio recovery, and obligations with the exterior.

Article 4.- During the validity of the credit, BHN MULTIBANCO S.A. may not increase its loan or investment portfolio in accordance with Article 15 of the aforementioned Regulation.
The BCB will request the Superintendence of Banks to strictly monitor the preceding provisions.

Article 5.- Authorize the President of the BCB to sign the loan contracts and the temporary assignment of portfolio contract with BHN MULTIBANCO S.A.

Article 6.- The Presidency and General Management are responsible for the execution and compliance of this Resolution.

28.II.97

____________________ Juan Antonio Morales A.

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Armando Pinell S. Jaime Ponce G. Juan Medinacelli V.

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Fernando Campero P. Edgar Millares A.