Resolution 118/2010

BOARD RESOLUTION NO. 118/2010 SUBJECT: CURRENCY OPERATIONS MANAGEMENT – MODIFIES THE REGULATION ON THE ADMINISTRATION OF CURRENCY MATERIAL.

HAVING SEEN: 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 on Monetization, Exchange and Destruction of Currency Material approved by Board Resolution No. 117/2009 of October 6, 2009. The Regulation on the Administration of Currency Material, approved by Board Resolution No. 46/2009 of April 14, 2009, modified by Board Resolution No. 95/2010 of August 17, 2010. The Report from the Currency Operations Management BCB-GOM-STES INF-2010-137 of October 7, 2010. The Report from the Legal Affairs Management BCB-GAL-SANO-INF-2010-325 of October 8, 2010.

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 and attend the payment system and other operations with the BCB of the financial intermediation entities subject to authorization and control of the Institution for the Regulation of Banks and Financial Entities, being able to delegate the custody of these deposits to the same and other financial entities, according to regulation.

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.

//2. B.R. No. 118/2010 That the Regulation on Monetization, Exchange and Destruction of Currency Material establishes the obligation to exchange unfit 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, as established by Law No. 1670 in its articles 54, letters a) and o) and pursuant to what is provided by the Statute of the Issuing Entity in its article 11, paragraphs 1) and 29), is authorized to issue norms and adopt general decisions that may be 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-2010-137 recommends the modification of articles 14 (Counting of unfit banknotes) and article 17 (Counting of fit banknotes) of the Regulation on the Administration of Currency Material.

That the Legal Affairs Management, through Report BCB-GAL-SANO-INF-2010-325, states that it has no observations regarding the modification of articles 14 and 17 of the Regulation on the Administration of Currency Material, so there is no legal impediment for the Board of Directors of the Issuing Entity to consider its approval.

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

Article 1.- Approve the modification of article 14 of the Regulation on the Administration of Currency Material in the following terms:

It says: Article 14 (Counting of Unfit Banknotes) Packages of banknotes in national currency classified as unfit 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, during the counting process, the equivalent of more than 10% of fit banknotes is found in each package or batch of banknotes, the corresponding deposit will be returned.

It should say:

“Article 14 (Counting of Unfit Banknotes) Packages of banknotes in national currency classified as unfit 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, during the counting process, the equivalent of more than 10% of fit banknotes is found in each package or batch of banknotes, the total amount of the currency material counted on the date of the count will be returned.”

Article 2.- Approve the modification of article 17 of the Regulation on the Administration of Currency Material in the following terms:

It says: Article 17 (Counting of Fit Banknotes) The BCB may determine the verification and counting of packages of banknotes classified as fit deposited by Financial Entities, applying the same procedures established in article 14 of this Regulation for the counting of packages of banknotes classified as unfit.

If, during the counting process, the equivalent of more than 10% of unfit banknotes per package or batch of banknotes is found, the corresponding deposit will be returned.

It should say:

“Article 17 (Counting of Fit Banknotes) The BCB may determine the verification and counting of packages of banknotes classified as fit deposited by Financial Entities, applying the same procedures established in article 14 of this Regulation for the counting of packages of banknotes classified as unfit.

If, during the counting process, the equivalent of more than 10% of unfit banknotes in each package or batch of banknotes is found, the total amount of the currency material counted on the date of the count will be returned.”

Article 3.- The approved modifications will enter into force from the date of their approval.

//4. B.R. No. 118/2010

Article 4.- The Presidency and the General Management are charged with the execution and compliance of this Resolution.

La Paz, October 12, 2010

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Gabriel Loza Tellería

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Gustavo Blacutt Alcalá Hugo Dorado Araníbar

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Rolando Marín Ibáñez Ernesto Yáñez Aguilar

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Rafael Boyán Téllez