Resolution 100/2000

BOARD RESOLUTION NO. 100/2000
SUBJECT: FINANCIAL ENTITIES MANAGEMENT –
AUTHORIZATION FOR THE WRITE-OFF OF
RECEIVABLE ACCOUNTS RECEIVED IN SUBSTITUTION OF THE DIM PORTFOLIO.

SEEN:
The Law 1670 of October 31, 1995.
The Board Resolution No. 114/99 dated December 21, 1999.
The Board Minutes No. 033/2000 dated August 02, 2000.
The Report from the Financial Entities Management GEF-SRRA No. 259-184/2000 dated November 20, 2000. The note from the Legal Affairs Management GAL No. 251/2000 dated November 24, 2000.

CONSIDERING:
That according to subsection a) of Article 54 of Law 1670, the Board has the authority to issue norms and adopt general decisions that are necessary for the BCB to fulfill the functions, competencies, and powers that are assigned to it by said legal provision.

That Board Resolution No. 114/99 in its Article 1st authorizes the constitution of provisions over six years starting from the 1999 fiscal year for the portfolio purchased in 1996 by BBA with a repurchase agreement and delivered to said financial entity through an Irregular Commercial Deposit, constituting for the 1999 fiscal year a provision of $6,000,000.- according to the established schedule.

That in Board Minutes No. 033/2000, the Administration is authorized to receive other assets in substitution of portfolio in Irregular Commercial Deposit, including:

//2. B.R. No. 100/2000 i) Movable and immovable assets received by BBA in payment in kind at their adjudication value or, in its case, at the committed sale price. ii) BBA's own immovable assets at their commercial value according to appraisal. iii) BBA's own movable assets: telephone shares at their book value. iv) "Other Receivable Accounts" (suspended products from BCB portfolio I, II and III) at their face value.

That the Financial Entities Management in its report GEF-SRRA No. 259- 184/2000, recommends the write-off of the Receivable Accounts received in substitution of the DIM Portfolio charged against the provision established in the 1999 fiscal year, maintaining control of its balance in off-balance sheet accounts.

That in the opinion of the Legal Affairs Management of the BCB, the receivable accounts constitute part of the asset received in substitution of the portfolio in Irregular Commercial Deposit and, having approved the provision schedule in the 6-year term starting from the 1999 fiscal year for the portfolio in Irregular Commercial Deposit, there is no prohibition for the write-off of said account against the approved provisions.

That the write-off does not represent the forgiveness or extinction of the debt and that it also does not affect the rights of the BCB to continue the legal actions conducive to the recovery of credits.

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

Article 1.- Authorize the write-off of the "DIM Receivable Accounts" up to
the amount of $4,026,816.14 against the provision established in the 1999 fiscal year to cover losses from the Irregular Commercial Deposit Portfolio approved by Board Resolution No. 114/99.

//3. B.R. No. 100/2000
Article 2.- Instruct the Legal Affairs Management and the Financial Entities
Management to follow up on the Administration Mandate with Banco Mercantil S.A. in order to ensure that the legal actions conducive to the recovery of the debts are taken in a timely manner.

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

La Paz, December 19, 2000

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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.