Resolution 105/2004

RESOLUTION OF THE BOARD OF DIRECTORS NO. 105/2004 SUBJECT: GENERAL MANAGEMENT – MODIFIES THE CHECK REGULATION.

VIEWED: The Commercial Code. Law No. 1670 of October 31, 1995. Law No. 1488 of April 14, 1993. Law No. 1864 of June 15, 1998. Board of Directors Resolutions 081/2001 of August 14, 2001, 109/97 of May 8, 1997, 064/98 of July 7, 1998, 011/2002 of January 22, 2002, and 076/2003 of July 8, 2003. Board of Directors Resolution No. 128/2001 of December 13, 2001, which approves the Statute of the Central Bank of Bolivia. The Compilation of Regulations for Banks of the Superintendence of Banks and Financial Entities. The Report from the Economic Policy Advisory Office APEC-INEP No. 033/2004 of July 12, 2004. The Report from the Manager of the SIPE Payment System Project No. 021/2004 of July 21, 2004. The Report from the Legal Affairs Management SANO No. 178/2004 of July 21, 2004.

CONSIDERING: That Article 795 of the Commercial Code regulates aspects inherent to the check.

That Article 3 of Law No. 1670, modified by Law No. 1864, empowers the Central Bank of Bolivia to formulate policies of general application in monetary, exchange, and payments system matters, for the fulfillment of its object.

That by virtue of the competence and powers attributed to the Issuing Entity, its Board of Directors, within the framework of general policies relative to the payments system, through Resolution No. 081/2001 approved the Check Regulation, and through Resolutions 109/1997, 064/1998, 011/2002, and 076/2003, regulates the exchange positions of financial intermediation entities.

That Law No. 1488 establishes that banking entities are authorized to receive money deposits in current accounts.

That according to Report APEC-INEP No. 033/2004, when an entity receives a deposit in national currency, committing to return it in foreign currency, if the account holder so decides, the entity is assuming a foreign currency liquidity risk that creates a currency mismatch not reflected in the financial statements and leads to uncertainty regarding the entity's exchange position.

That financial entities assume the commitment to honor in foreign currency checks drawn in this currency against accounts in bolivianos, which creates risks for the payments system.

That for the reasons stated, it is understood necessary to complement the regulation referred to the issuance of checks from current accounts of the Check Regulation.

That according to Report SANO No. 178/2004, the BCB, through its Board of Directors, by virtue of what is established in subsections a) and o) of Article 54 of Law No. 1670 and of the Statute of the Central Bank of Bolivia, numerals 12 and 13 of Article 11, without violating current provisions, has the authority to determine the exchange regime and exchange policy and approve norms for the functioning of the payments system.

That in the opinion of the Legal Affairs Management, the BCB Board of Directors can modify the Check Regulation as a means of payment, safeguarding the compliance with its policies and object.

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

Article 1.- Approve the modification of the first paragraph of Article 5 of the BCB Check Regulation, in the following terms: //3. B.D. No. 105/2004 SAYS:

Article 5.- (Issuance on forms and content) Check forms may only be issued by financial intermediation entities authorized by the SBEF to operate with current accounts.

MUST SAY: “Article 5.- (Issuance on forms and content) Check forms may only be issued by financial intermediation entities authorized by the SBEF to operate with current accounts. These forms must be issued for their use exclusively in the currency of denomination of the respective current account. Checks may not be drawn in a currency different from the denomination of the current account.”

Article 2.- This modification will enter into force as of August 16, 2004.

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

La Paz, July 21, 2004

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Juan Antonio Morales A.

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Juan Medinaceli V. Enrique Ackermann A.

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José Luis Evia V. Fernando Paz B.