Regulatory Alerts1997-06-10 | Resolución 116/97Added · Updated
Resolution 116/97 - Minimum Legal Capital for Banks, Second-Tier Financial Entities, and Financial Service Companies
Resolution 116/97 establishes minimum legal capital requirements of 5,500,000 Special Drawing Rights (SDRs) for banks, 4,400,000 SDRs for second-tier financial entities, and 550,000 SDRs for specific financial service companies. Existing banking entities must comply by December 31, 1998, while second-tier entities and financial service companies have until December 31, 1999. New financial entities are required to deposit the full minimum capital in cash into a special account at the Central Bank of Bolivia prior to obtaining their operating license. The resolution became effective on July 1, 1997.
RESOLUTION OF THE BOARD OF DIRECTORS NO. 116/97 SUBJECT: FINANCIAL SYSTEM - MINIMUM LEGAL CAPITAL FOR BANKS, SECOND-TIER FINANCIAL ENTITIES, AND FINANCIAL SERVICE COMPANIES.
HAVING VIEWED:
The Law of Banks and Financial Entities No. 1488 of April 14, 1993. The Law of the Central Bank of Bolivia No. 1670 of October 31, 1995. The Report from the Legal Affairs Management Department S-JIN No. 017/97 of January 6, 1997. The reports from the Financial System Management Department S-RYC 022/96 and S-RYC 023/96 of June 4, 1997. The Report from the Economic Policy Advisory Office ANSF No. 117/97 of June 4, 1997.
CONSIDERING:
That according to Article 31, paragraph d) of Law No. 1670, the Central Bank of Bolivia may increase but not decrease the amounts of minimum capital of general compliance, as well as establish the other characteristics of the minimum capitals necessary for the creation and operation of entities within the financial intermediation system.
Therefore,
THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:
//2. R.D. No. 116/97 Article 1.- Approve the Minimum Legal Capital for Banks, Second-Tier Financial Entities, and Financial Service Companies, according to the following detail:
The minimum capital for banks shall be the equivalent, in national currency, of five million five hundred thousand Special Drawing Rights (5,500,000 SDRs).
The minimum capital for second-tier financial entities shall be 80% (eighty percent) of that established for banks, that is, the equivalent in national currency of four million four hundred thousand Special Drawing Rights (4,400,000 SDRs).
The minimum capital for financial leasing and factoring companies linked to financial entities, and for general warehouses linked or not linked to financial entities, shall be 10% (ten percent) of the minimum capital of a bank, that is, the equivalent in national currency of five hundred fifty thousand Special Drawing Rights (550,000 SDRs).
Article 2.- Existing banking financial entities have until December 31, 1998, to comply with the aforementioned provisions, while second-tier financial entities and financial service companies may do so until December 31, 1999.
Article 3.- It is a requirement for obtaining the respective operating license that any new financial entity establish the minimum capital in cash, in the amounts established above, by deposit into a special account opened for this purpose at the Central Bank of Bolivia.
//3. R.D. No. 116/97 Article 4.- This Resolution shall enter into force on July 1, 1997, with the Presidency and General Management being responsible for its dissemination, execution, and compliance.
10.VI.97 ____________________ Juan Antonio Morales A.
Armando Pinell S. Jaime Ponce G. Juan Medinacelli V.
Fernando Campero P. Edgar Millares A.