Resolution 095/2010

BOARD RESOLUTION NO. 095/2010
SUBJECT: CURRENCY OPERATIONS MANAGEMENT – MODIFIES THE REGULATION FOR THE ADMINISTRATION OF CURRENCY MATERIAL

VIEWED:
The Law No. 1670 of October 31, 1995 of the Central Bank of Bolivia The Statute of the Central Bank of Bolivia approved by Board Resolution No. 128/2005 of October 21, 2005 and its modifications.
The Regulation for the Administration of Currency Material, approved by Board Resolution No. 046/2009 of April 14, 2009.
The Report from the Currency Operations Management BCB-GOM-STES INF-2010-114 of July 23, 2010.
The Report BCB-GAL-SANO-INF-2010-240 of July 30, 2010 from the Legal Affairs Management.

CONSIDERING:
That pursuant to Article 24 of Law No. 1670, all entities of the Public Sector must deposit their funds in fiscal accounts of the Central Bank of Bolivia or in the entity delegated by it.
That as established in Article 37 of Law No. 1670, the Issuing Entity will be the custodian of the liquid reserves intended to cover the legal reserve requirement and attend the payment system and other operations with the BCB of financial intermediation entities subject to authorization and control by the Institution for the Regulation of Banks and Financial Entities, and may delegate the custody of these deposits to the same and other financial entities, in accordance with regulations.

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That as determined by Article 38, letter a) of Law No. 1670, the Central Bank of Bolivia may receive demand and time deposits in national and foreign currency from financial intermediation entities.
That the Regulation for the Monetization, Exchange, and Destruction of Currency Material establishes the obligation to exchange unusable currency material and to break down banknotes into smaller denominations or coins.
That within the framework of the aforementioned, the Board of Directors of the Central Bank of Bolivia, pursuant to Law No. 1670 in its Article 54, letters a) and o), and pursuant to what is provided by the Statute of the Issuing Entity in its Article 11 numeral 1) and 29), is empowered to issue norms and adopt general decisions that are necessary for it to fulfill the functions, competencies, and powers assigned by the Law. That the Currency Operations Management in its Report BCB-GOM-STES INF-2010-114 recommends modifying in Articles 14 (Counting of unusable banknotes) and Article 17 (Counting of usable banknotes) of R.D. 46/2009, the tolerance margins to 10% and incorporating into Article 3 (Terms and Definitions) the definition of bill batch. That the Legal Affairs Management states that it has no observations regarding the modification of Articles 3, 14, and 17 of the Regulation for the Administration of Currency Material and there is no legal impediment for the Board of Directors of the Issuing Entity to consider the approval of said modifications. That the tests performed to determine the tolerance margin in the classification of currency material show minor errors in the manual classification of usable material, while considerable errors are observed in the classification of unusable banknotes due to manual limitations in determining the level of dirtiness and the stiffness of the banknote, characteristics that are clearly established in the automatic process through the reading-sorting equipment.

THEREFORE,
THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:
Article 1.- Approve the modification to the Regulation for the Administration of Currency Material in its Articles 3, 14, and 17.
Article 2.- This Currency Material Regulation will enter into force as of October 1, 2010.

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Article 3.- The Presidency and the General Management are charged with the execution and compliance of this Resolution.
La Paz, August 17, 2010

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Gabriel Loza Tellería

_________________________ _________________________ Gustavo Blacutt Alcalá Hugo Dorado Araníbar _________________________ _________________________ Rolando Marín Ibáñez Ernesto Yáñez Aguilar _________________________ Rafael Boyán Téllez

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ANNEX
MODIFICATION OF THE REGULATION FOR THE ADMINISTRATION OF CURRENCY MATERIAL
CHAPTER I
OBJECT, TERMS AND DEFINITIONS
The following definition is incorporated:
Article 3. (Terms and Definitions). The terms and definitions of this Regulation are as follows:

• BILL BATCH: Set of banknote packages that are processed and classified in reading-sorting equipment, grouped by institution and cash dispenser

CHAPTER III
COUNTING OF DEPOSITED CURRENCY MATERIAL
Modification of Article 14 Says:
Article 14. (Counting of unusable banknotes). Banknote packages in national currency classified as unusable will be recounted and verified by the BCB, or by the company it determines, in BCB facilities and in the presence of auditors from the Financial Entity that made the deposit of the packages.
If five or more usable banknotes are found in the counting process in each package classified as unusable, the Financial Entity will be subject to a sanction, as determined in the BCB's Fine Table.
It should say:
Article 14. (Counting of unusable banknotes). Banknote packages in national currency classified as unusable will be recounted and verified by the BCB, or by the company it determines, in BCB facilities and in the presence of auditors from the Financial Entity that made the deposit of the packages.

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If the equivalent of more than 10% of usable banknotes is found in the counting process in each package or bill batch classified as unusable, the corresponding deposit will be returned.

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Modification of Article 17 Says:
Article 17. (Counting of usable banknotes). The BCB may determine the verification and counting of packages of banknotes classified as usable deposited by Financial Entities, applying the same procedures established in Article 14 of this Regulation for the counting of packages of banknotes classified as unusable.
If five or more unusable banknotes per package are found in the counting process, the financial entity will be subject to a sanction determined in the BCB's fine table.
It should say:
Article 17. (Counting of usable banknotes). The BCB may determine the verification and counting of packages of banknotes classified as usable deposited by Financial Entities, applying the same procedures established in Article 14 of this Regulation for the counting of packages of banknotes classified as unusable.
If the equivalent of more than 10% of unusable banknotes is found in the counting process per package or bill batch, the corresponding deposit will be returned.