Resolution 146/2003

BOARD RESOLUTION NO. 146/2003
SUBJECT: FINANCIAL ENTITIES MANAGEMENT – APPROVES MODIFICATION OF THE TRANSITIONAL REGULATION FOR PORTFOLIO ADMINISTRATION UNDER LAW NO. 2297.

VIEWED:
The Law No. 1670 of October 31, 1995, Central Bank of Bolivia Law.
The Law No. 2297 of December 20, 2001, on Strengthening Financial Norms and Supervision.
The Statute of the Central Bank of Bolivia, approved by Board Resolution No. 128/2001 of December 13, 2001.
The Board Resolution No. 044/2002 of April 30, 2002, which approves the Transitional Regulation for Portfolio Administration under Law No. 2297.
The Financial Entities Management Report GEF-SRRA No. 354/2003 of December 15, 2003.
The Legal Affairs Department Report SAJU-967/2003 of December 12, 2003.

CONSIDERING:
That according to subsection a) of Article 54 of Law No. 1670, the Board has the authority to issue norms and adopt general decisions necessary for the BCB to fulfill the functions, competencies, and powers assigned to it by that legal provision.

That Law No. 2297 in its Article 1st, subsection i), states that the provisions registered at the date of restructuring shall be maintained until the cancellation of the restructured credit.

That Board Resolution No. 044/2003 approves the Transitional Regulation for Portfolio Administration under Law No. 2297 “Law on Strengthening Financial Norms and Supervision” and Supreme Decree No. 26575, corresponding to the Administration Mandate granted by the BCB to Banco Mercantil S.A. in its 5 chapters and 27 articles, which forms part of that Resolution as an annex.

That Article 14 of the Transitional Regulation for Portfolio Administration under Law No. 2297 states that the classification of credits and the provisions constituted at the date of restructuring shall be maintained until the cancellation of the restructured credit, unless the operation is written off as irrecoverable.

That the Financial Entities Management, through Report GEF-SRRA No. 354/2003, recommends modifying Article 14 of the Transitional Regulation for Portfolio Administration under Law No. 2297, in order to effect the reclassification of credits that were restructured under Law No. 2297.

That through Report SAJU-967/2003, the Legal Affairs Department states that the reclassification of restructured credits does not contradict what is provided in subsection i), Article 1st, Title I of Law No. 2297, and therefore recommends the modification of Article 14 of the Transitional Regulation for Portfolio Administration under Law No. 2297.

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

Article 1.- Modify Article 14 of the Transitional Regulation for Portfolio Administration under Law No. 2297, approved by Board Resolution No. 044/2003, in the following terms:

SAYS:
Article 14.- (Provision and classification regime for credit portfolio)
The classification of credits and the provisions constituted at the date of restructuring shall be maintained until the cancellation of the restructured credit, unless the operation is written off as irrecoverable.

SHOULD SAY:
“Article 14.- (Provision and classification regime for credit portfolio) The provisions constituted at the date of restructuring shall be maintained until the cancellation of the restructured credit, unless the operation is written off as irrecoverable.”

Article 2.- The Mandatary, for the reclassification of a credit at the explicit request of the borrower, must comply with the requirements determined by the Superintendence of Banks and Financial Entities. For those credits that exceed the autonomous decision margin (US$150,000), the Mandatary must follow the same administrative procedure established in the Portfolio Administration and Asset Sale Regulation for the restructuring of credits.

In order to comply with what is stated in subsection i), Article 1st of Law No. 2297, the Mandatary must constitute a generic provision in an amount such that it maintains the value of the provision constituted before the restructurings carried out under Law No. 2297.

Article 3.- The Presidency and the General Management are charged with the execution and compliance of this Resolution.

La Paz, December 16, 2003.

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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.