Resolution 110/98

BOARD RESOLUTION NO. 110/98

SUBJECT: AUTHORIZES THE SIGNING OF A DEED OF GIFT IN PAYMENT AGREEMENT WITH THE LIQUIDATING INTENDANCY OF BANCO DEL PROGRESO NACIONAL S.A.M. IN LIQUIDATION.

HAVING REVIEWED: The General Banking Law of July 11, 1928. Law 1670 of October 31, 1995, and the Statute of the BCB of February 20, 1997. Resolution No. 205/98 of Degrees and Preferences issued by the First Civil Court on September 8, 1989. Note CITE: INT. 599/12/98 of December 3, 1998, from the Liquidating Intendancy of Banco del Progreso Nacional SAM. Reports from the Financial System Management SEL-DEL 253/98 and SEL-DEL 287/98 of October 15, 1998, and December 11, 1998, respectively. Note from the Legal Advisory Office ALEG. No. 417/98 of December 15, 1998. Report from the Internal Audit Unit No. 033/98 of December 17, 1998.

CONSIDERING: That the General Banking Law of 1928 confers powers on the Liquidating Intendants, legally designated by the Superintendent of Banks, to sell or dispose of the assets of entities in liquidation, with prior judicial authorization. Likewise, it empowers the Liquidating Intendants to pay the claims approved in the order of precedence of the Sentence of Degrees and Preferences issued by the Judge of the Liquidation.

That Law 1670 in its Article 54 subsection p) and the Statute of the BCB in its Article 14 subsection p), confer powers on the Board of Directors to approve the acquisition of movable and immovable goods, as well as to authorize the signing of inter-institutional agreements.

That it is necessary to expedite the closure process of Banco del Progreso Nacional S.A.M. in Liquidation, otherwise, the administrative costs of the liquidation will continue to erode the recoverable assets of this entity to the detriment of the BCB.

That since the Sentence of Degrees and Preferences was issued in 1989, the BCB no longer has expedited legal avenues for the total recognition of its claims.

That more than 11 years have passed since the start of the liquidation procedure, and Banco del Progreso Nacional S.A.M. does not have sufficient assets to cancel even the claims recognized in the Sentence of Degrees and Preferences.

That according to Internal Audit recommendations, it is necessary to regularize the amounts of the claims claimed by the BCB based on the amounts stated in the Sentence of Degrees and Preferences, and likewise, to elevate to the consideration of the Board of Directors the corresponding payment offers.

That through note 599/12/98 of December 3, 1998, the Liquidating Intendancy of Banco del Progreso Nacional S.A.M. formalized its payment offer, accepting the result of the negotiation sustained with the Financial System Management of the BCB.

That in its report SEL-DEL No. 253/98, the Financial System Management informed the Board of Directors of the current financial situation of Banco del Progreso Nacional S.A.M., as well as the status of the claims that this entity has with the BCB, suggesting negotiation policies that allow expediting its closure. Likewise, through Report SEL-DEL 287/98, said Management, in addition to requesting the write-off of unrecognized items, states that the negotiation with the Liquidating Intendancy has concluded, recommending to the Board of Directors to accept the negotiated deed of gift in payment offer, as it represents the best alternative for the BCB to at least recover part of its claims.

That in the opinion of the Legal Advisory (Note ALEG. No. 417/98), agreements are legal means of recovering credits granted to Banks in Liquidation, pronouncing favorably on the results of the negotiations carried out with the Liquidating Intendancy.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Accept the negotiated deed of gift in payment offer between the Financial System Management and the Liquidating Intendancy of Banco del Progreso Nacional S.A.M., according to which the entity in liquidation will transfer all its remaining assets to the BCB, according to the following table:

OFFER OF ASSETS FOR DEED OF GIFT IN PAYMENT (Expressed in Dollars)

Entity in Liquidation | Asset | Offered Deed of Gift Banco del Progreso Nacional S.A.M. | Cash | 1,337,617.02 | Portfolio | 1.00 | Immovable Goods | 250,741.42 | Other Goods for Use | 854.02 | Total | 1,589,213.46

Article 2.- Authorize, charged to provisions made, the write-off of the items not recognized in the Sentence of Degrees and Preferences issued by the Judge of the Liquidation, according to the following detail:

Article 3.- Authorize the write-off of the unpaid balances of the accounts receivable charged to the provisions made, as well as the reversal of the remaining provisions, once the price of the deed of gift in payment is registered.

Article 4.- Authorize the corresponding accounting withdrawal of the unrecognized claims, the unpaid balances, and the Accrued Interest Accounts Receivable from the Group Accounts of Registration.

Article 5.- Authorize the President of the BCB to sign the Deed of Gift in Payment Agreement with the Liquidating Intendancy of Banco del Progreso Nacional S.A.M., with powers to adjust the amounts and the composition of the assets based on the date of signing the Agreement, having to inform the Board of Directors on the matter.

Article 6.- The Unit of Legal Affairs must present the Agreement before the Judge of the Liquidation. Likewise, it will manage before the Superintendence of Banks and Financial Entities the application of Article 131 of the General Banking Law of July 11, 1928 against the presumed responsible for the administration of Banco del Progreso Nacional S.A.M., in order for the BCB to recover the unpaid balance to date.

Article 7.- The Presidency and the General Management are tasked with executing this Resolution.

La Paz, December 17, 1998

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Juan Antonio Morales A.

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Armando Pinell S. Jaime Ponce G. Fernando Campero