Resolution 090/2011: Regulation of Incentives for the Collection of Credit Portfolio Owned by the Central Bank of Bolivia

BOARD RESOLUTION NO. 090/2011 SUBJECT: FINANCIAL ENTITIES MANAGEMENT – REGULATION OF INCENTIVES FOR THE COLLECTION OF CREDIT PORTFOLIO OWNED BY THE CENTRAL BANK OF BOLIVIA.

VIEWED: The Law No. 1670 of October 31, 1995. The Statute of the Central Bank of Bolivia of October 21, 2005. The Board Resolution No. 061/2003 dated June 6, 2003. The Board Resolution No. 072/2008 dated May 27, 2008. The Board Resolution No. 069/2009 dated June 16, 2009. The Board Resolution No. 050/2010 dated April 6, 2010. The Legal Report from the Legal Affairs Management BCB-GAL-SAJU-EXBB-INF-2011-70-32 dated July 7, 2011. The Technical Report from the Financial Entities Management BCB-GEF-SRRA-DRCA-INF-2011-99 dated July 6, 2011.

CONSIDERING: That Board Resolution No. 061/2003 of June 6, 2003, put into effect only chapters II (Credit Recovery Committee) and V (Write-off of Unrecoverable Portfolio) of the Regulation for the Collection of Old Past-Due Portfolio, until the total conclusion of the administration of the Old Past-Due Portfolio.

That Board Resolution No. 072/2008 of May 27, 2008, approved the Regulation for the Administration and Recovery of Credit Portfolio of the former Boliviano Americano Bank and the Regulation for the Write-off of Credits of the Portfolio of the former BBA, treatment of recovery and withdrawal of the financial statements of the BCB.

That Board Resolution No. 069/2009 of June 16, 2009, approved the Regulation of Incentives for the Collection and Reprogramming of Credit Portfolio owned by the Central Bank of Bolivia.

That Board Resolution No. 050/2010 of April 6, 2010, approved the modification of article 1 of Board Resolution No. 092/2004 referred to the collection of the Written-off Portfolio of the Old Past-Due Portfolio.

That in a meeting on May 31, 2011, through Act No. 030/2011, the Board instructed regarding the proposal of the Financial Entities Management to Regulate Incentives for the payment of the portfolio owned by the BCB, to evaluate the reinstatement of the validity of Board Resolution No. 069/2009 and to elaborate a proposal that includes improvements to said regulation that considers the expansion of incentives for the collection of portfolio.

That the Committee for Recovery and Realization of Assets of Direct Administration, in an ordinary meeting on July 4, 2011 and through Act 08/2011, considered the policies proposed by the Legal Affairs and Financial Entities Managements, instructing that said policies be submitted to the Board, with suggestions of modifications to the Draft Regulation of Incentives for the Collection of Credit Portfolio Owned by the Central Bank of Bolivia.

That article 54 subsection o) of Law No. 1670, and article 11 numeral 29) of the Statute of the BCB, stipulate 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 from the Financial Entities Management BCB-GEF-SRRA-DRCA-INF-2011-99 carries out the technical analysis of the application of incentives and the Report from the Legal Affairs Management BCB-GAL-SAJU-EXBB-INF-2011-70-32, states that the Board of the Central Bank of Bolivia has the authority to consider and, if appropriate, approve the draft Regulation of Incentives for the Collection of Portfolio owned by the Central Bank of Bolivia.

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

Article 1.- Approve the Regulation of Incentives for the Collection of Credit Portfolio Owned by the Central Bank of Bolivia, which forms an integral part of this Resolution, with effect from July 18, 2011, until December 31, 2012.

Article 2.- The provisions contained in the Regulation for the Administration and Recovery of Credit Portfolio of the former Boliviano Americano Bank and the Regulation for the Write-off of Credits of the Portfolio of the former BBA, treatment of recovery and withdrawal of the financial statements of the BCB, approved through Board Resolution No. 072/2008 of May 27, 2008, are applicable insofar as they pertain to the said portfolio.

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

La Paz, July 12, 2011

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Marcelo Zabalaga Estrada

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Hugo Dorado Araníbar Ernesto Yáñez Aguilar

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Rolando Marín Ibáñez Gustavo Blacutt Alcalá

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Rafael Boyán Téllez

ANNEX DRAFT OF INCENTIVES FOR THE COLLECTION OF PORTFOLIO OWNED BY THE BCB

Article 1. Object and scope of application. The present Regulation aims to facilitate debtors and guarantors the cancellation of their pending payment obligations with the BCB, allowing such cancellation to be made by a third party, without this implying automatic subrogation of the debt in their favor. The scope of application of this Regulation extends to the entire portfolio owned by the BCB in whatever state it is found: current, past-due, and under judicial execution, in the latter case until before the extension of the adjudication deed inclusive. It comprises the Portfolio of the Banks: Former BBA, Crédito Oruro, Potosí, Del Progreso Nacional, BIDESA, and Cooperativa San José Obrero. (The portfolio of BIDESA, up to the capital amount that is owned by the BCB).

Article 2. Of the benefits. The debtors of the credit portfolios indicated in the first article may avail themselves of the Benefit for total payment of their credits.

Article 3. Benefits to be granted. The persons indicated in the first article of this regulation who make the total payment of the debt, in a single payment and in cash, will benefit from the forgiveness of current interest, penal interest, and late fees according to the following scale:

CAPITAL RANGE | FORGIVENESS OF CURRENT INTEREST | FORGIVENESS OF PENAL INT., JUDICIAL EXPENSES BCB AND OTHERS Less than or equal to 500 | 95% | 100% From 501 to 1,000 | 90% | 100% From 1,001 to 5,000 | 85% | 100% From 5,001 to 15,000 | 80% | 100% From 15,001 to 50,000 | 75% | 100% From 50,001 onwards | 70% | 100%

Article 4. Requirements for the benefit Those who avail themselves of the benefits of this Regulation must pay the professional fees of lawyers; in the case of the Former BBA portfolio, judicial expenses incurred during the administration of the mandate of the former BBA or in the administration of the former BBA must also be paid. In other cases, judicial expenses incurred during the direct administration of the BCB will be forgiven. Judicial expenses not reported by lawyers by the date of liquidation will be forgiven, with the BCB assuming these amounts from management results. In the event that debtors or guarantors have more than one obligation with the BCB, the benefits will be applied per credit. Debtors who have actions against the BCB aimed at avoiding the payment of their obligations, prior to availing themselves of the benefits, must withdraw the action and the rights therein.

Article 5. Interest received in payment by the BCB. The interest from the credit portfolio of the Former BBA received and accounted for as part payment by the financial supports provided by the BCB will not be forgiven.

Article 6. Partial payments Judicial deposits pending application up to the date of approval of this Regulation, due to judicial withholdings or auctions of assets, will not be considered for the benefits provided in the regulation.

Article 7. Validity of the benefits. The benefits granted in application of this regulation will be valid from July 18, 2011, until December 31, 2012.

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