Resolution 132/2004

BOARD RESOLUTION NO. 132/2004 SUBJECT: FINANCIAL ENTITIES MANAGEMENT – APPROVES FINANCIAL SUPPORT DISBURSEMENT TO THE MUTUAL MANUTATA RESOLUTION PROCESS

VIEWED: Law No. 1670 of the Central Bank of Bolivia of October 31, 1995. Law No. 1488 on Banks and Financial Entities of April 14, 1993, Consolidated Text by Supreme Decree No. 26851 of April 3, 2002. Law No. 2297 on Strengthening Financial Regulation and Supervision of December 20, 2001. Law No. 2196 on the Special Fund for Economic Reactivation and Strengthening of Financial Entities of May 4, 2001. Law No. 2682 of May 5, 2004. Supreme Decree No. 27025 of May 6, 2003. Resolution of the Superintendency of Banks and Financial Entities SB/072/2004 of September 9, 2004, which orders the intervention of the Mutual Association of Savings and Loans for Housing Manutata, with the objective of applying resolution or forced judicial liquidation procedures. Note from the Superintendency of Banks and Financial Entities, SB/ISL/D- 57472/2004 of September 10, 2004, requesting support for the resolution process of the Mutual Association of Savings and Loans for Housing Manutata. Report from the Financial Entities Management GEF No. 263/2004 of September 10, 2004. Report from the Legal Affairs Management SANO No. 228/2004 of September 10, 2004.

CONSIDERING: That through Resolution SB No. 072/2004, the Superintendency of Banks and Financial Entities, in application of Article 120, subsection a) of Law No. 1488, has ordered the intervention of the Mutual Association of Savings and Credit for Housing Manutata, with the objective of applying the resolution procedure established in Title IX, Chapter IV of the aforementioned Law.

That Article 125, subsection b) of Law No. 1488, establishes that to successfully carry out the resolution procedure, the Financial Restructuring Fund (FRF), at the discretion of the Superintendency of Banks and Financial Entities, may support with cash contributions or bonds to the trust indicated in subsection d) of Article 124 of the aforementioned Law, in exchange for a second-order participation in the same.

That Article 125 of Law No. 1488, in its fifth paragraph, states that until January 1, 2005, the support mechanisms to be carried out by the FRF will be performed by the Central Bank of Bolivia on behalf of the General Treasury of the Nation, whose total contribution may not exceed fifty percent (50%) of the privileged obligations of the intervened financial intermediation entity.

That Article 3 of Supreme Decree No. 27025 authorizes the General Treasury of the Nation to, through the Central Bank of Bolivia, support the intervention of non-bank Financial Intermediation Entities, when they do not have sufficient liquid assets to cover intervention expenses and liquidity deficiency. The Central Bank of Bolivia on behalf of the General Treasury of the Nation will disburse the resources required by the SBEF in the requested currency, in favor of the intervened entity.

That the Superintendency of Banks and Financial Entities, through note SB/ISL/D-57472/2004 in application of Article 125 of Law No. 1488 and Article 3 of Supreme Decree No. 27025, has requested from the Central Bank of Bolivia the sum of $us. 115,484.- and Bs 200,000.- in cash, to support the resolution process of Mutual Manutata.

That the Financial Entities Management in its Report GEF No. 263/2004, states that the amounts requested by the SBEF for support in the resolution process are within the limit established in Article 125 of Law No. 1488 and the scope of Article 3 of Supreme Decree No. 27025, therefore recommending to the Board of Directors the consideration of said request.

That the Legal Affairs Management, in Report SANO No. 228/2004, states that the SBEF's request is framed within the current legal norms, therefore the Board of Directors of the Issuing Entity has competence to approve the disbursement of the resources requested by it in order to support and facilitate the resolution process of the Mutual Association of Savings and Loans for Housing Manutata, corresponding to the Board of Directors to authorize Mr. President of the BCB to sign a Contract with the TGN, for the compensation of the support granted through bonds.

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

Article 1.- Authorize, on behalf of the General Treasury of the Nation, the disbursement in favor of the Intervened Mutual Association of Savings and Loans for Housing Manutata, the sum of $239,319.55 (Two hundred thirty-nine thousand three hundred nineteen 55/100) corresponding to 50% of the privileged obligations provided for in Article 125 of Law No. 1488, to support its resolution procedure.

Article 2.- Authorize, on behalf of the General Treasury of the Nation, at the request of the Superintendency of Banks and Financial Entities, the disbursement in favor of the Intervened Mutual Association of Savings and Loans for Housing Manutata, of $115,484.- (One hundred fifteen thousand four hundred eighty-four 00/100 US dollars) Bs200,000.- (Two hundred thousand 00/100 bolivianos) to cover liquidity deficiencies and facilitate the resolution procedure contemplated in Article 3 of Supreme Decree No. 27025.

Article 3.- Authorize the Financial Entities Management to proceed with the transfer of resources from the RAL Fund of the intervened entity to its legal reserve accounts in cash.

Article 4.- Authorize the President of the BCB to sign, with the Minister of Finance, the Agreement by means of which the compensation in bonds is carried out for a term of fifteen (15) years, of the disbursements determined in Articles 1 and 2 of this Resolution, and under the terms and conditions established in Supreme Decree No. 27025.

Article 5.- The Presidency and the General Management are charged with the execution and compliance of this Resolution.

La Paz, September 10, 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.

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Jaime Apt B.