Resolution 126/2004

BOARD RESOLUTION NO. 126/2004 SUBJECT: FINANCIAL ENTITIES MANAGEMENT – EXTENSION OF DEBT AMORTIZATION PERIOD, CHANGE OF DEBT SERVICE, AND FORGIVENESS OF PENAL INTEREST ON THE REPROGRAMMED CREDIT OF COOPERATIVA MULTIACTIVA DE GREMIALES 19 DE NOVIEMBRE LTDA.

SEEN: Law No. 1670 of October 31, 1995. Board Resolution No. 048/2002 of May 14, 2002. The note from the Multi-activity Cooperative of Gremiales 19 de Noviembre Ltda. from the Department of Santa Cruz dated August 23, 2004. The Report from the Financial Entities Management GEF SRRA No. 252/2004 of August 30, 2004. The Report from the Legal Affairs Management SAJU No. 106/2004 of August 30, 2004.

CONSIDERING: That Article 54, subsection j) of Law No. 1670 grants the Board of Directors of the Central Bank of Bolivia the authority to set and modify interest rates on credits granted by the BCB, taking into account market rates for similar operations and establishing their other terms and conditions.

That Board Resolution No. 048/2002 approves the Transitional Regulation for Portfolio Administration within the framework of Law No. 2297 on Strengthening Financial Norms and Supervision and Supreme Decree No. 26575, corresponding to the BCB portfolio received in payment in kind from financial entities in liquidation and the portfolio administered by the former Inalpre, in six chapters and 29 articles.

That by note dated August 23, 2004, Cooperative 19 de Noviembre Ltda. requested a deadline to bring the credit into effect and offered payment of approximately $US 100,000.00 by mid-September 2004, a change in payment modality from bimonthly to semiannual, as well as the forgiveness of penal interest.

That the Financial Entities Management, through Report GEF-SRRA No. 252/2004, recommends favorably considering the request of the Multi-activity Cooperative of Gremiales 19 de Noviembre Ltda., given that deposits in the BCB transitional account rose to $US 52,091.54 as of August 30, 2004, showing the members' predisposition to regularize the obligation with the BCB, and since, if the request were not accepted, the initiation of judicial actions and the eviction of sales stalls for credit recovery could harm extrajudicial recovery, with eviction constituting a potential social conflict.

That the Report from the Legal Affairs Management SAJU No. 106/2004 concludes that, in accordance with Article 2 of Law 2297, in case of default on installments by the debtor in its obligations, the BCB may forgive penal interest. Considering that the debtor formally expresses its intention to pay, the BCB is not prevented from attending to the request, especially since its offer to bring the operation up to date is short-term and falls under analogy within Article 2 of Law 2297.

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

Article 1.- Accept the payment of the overdue installments dated September 21, 2003, November 20, 2003, January 19, 2004, March 19, 2004, May 18, 2004, and July 17, 2004, of the reprogrammed credit of the Multi-activity Cooperative of Gremiales 19 de Noviembre Ltda. up to 09/15/04.

Article 2.- Approve the modification of the debt service modality, from bimonthly to semiannual effective July 17, 2004, without modifying the final maturity date and other financial conditions of the reprogrammed credit through the Debt Recognition, Reprogrammation of Outstanding Balances, and Ratification of Guarantees Contract dated April 10, 2003.

Article 3.- Approve the forgiveness of penal interest that is registered in the BCB as of September 15, 2004.

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

La Paz, August 31, 2004

---

Juan Antonio Morales A.

---

Juan Medinaceli V. José Luis Evia V.

---

Fernando Paz B. Jaime Apt B.