Resolution 152/2003

BOARD RESOLUTION NO. 152/2003
SUBJECT: FINANCIAL ENTITIES MANAGEMENT – APPROVES PROVISIONS FOR THE PORTFOLIO RECEIVED FROM THE PREVIOUS BBA AND CLAIMS FROM BIDESA IN LIQUIDATION

VIEWED:
Law 1670 of October 31, 1995.
Board Resolution No. 114/99 of December 21, 1999.
Board Resolution No. 101/2000 of December 19, 2000.
Board Resolution No. 120/98 of December 22, 1998.
Board Resolution No. 102/2000 of December 19, 2000.
The report from the Financial Entities Management GEF – SRRA No. 337/2003 of December 2, 2003.
The Internal Communication from the Accounting Management DAF – 321 – 1285/2003 of November 12, 2003.
The report from the Legal Affairs Management SANO/242/2003 of December 9, 2003.

CONSIDERING:
That according to subsection a) of Article 54 of Law 1670, the Board has the authority to issue norms and adopt general decisions necessary for the Central Bank of Bolivia (BCB) to fulfill the functions, competencies, and powers assigned by that legal provision.

That Board Resolution No. 114/99 authorizes the establishment of provisions over six years starting from the 1999 fiscal year, for a total of $US 52,626,304, for the portfolio purchased in 1996 from the BBA with a repurchase agreement and delivered to said financial entity through an irregular commercial deposit.

That Board Resolution No. 101/2000 authorizes the establishment of provisions for the portfolio delivered under an Administration Mandate to Banco Mercantil for an accumulated amount corresponding to the portfolio in Bolivianos of Bs 5,088,981.66 for the fiscal years 2000 to 2004, and of $US 16,525,825.26, and that in case the portfolio suffers additional deterioration, the BCB will establish a provision for an amount equivalent to 100% of the mentioned deterioration, annually.

That Board Resolution No. 120/98 authorizes the establishment of the provision in the 1998 fiscal year for possible uncollectibility of extra-judicial claims claimed against BIDESA in liquidation, as follows: ALADI Bs 2,030,400.00 and by Subrogation of Deposits Bs 29,932,444.20, totaling Bs 31,962,844.20. Likewise, it authorizes the establishment of additional annual provisions, of a similar amount to the previous one, in the fiscal years 1999-2002 to cover the possible uncollectibility of claims of the BCB with BIDESA in liquidation.

That Board Resolution No. 102/2000 authorizes the establishment of additional provisions to those authorized in Board Resolution No. 120/98, for doubtful recovery credits from BIDESA in liquidation, for a total amount of $US 35,175,750.00, in the fiscal years 2000 to 2004. The additional amount to be provided in each of the five fiscal years will reach $US 7,035,150.00.

That the Internal Communication DAF-321-1285/2003 from the Accounting Management recommends revoking the deferral of provisions authorized through Board Resolutions 114/99, 101/2000, and 102/2000, so that the provisions to be established until 2004 are accounted for in the current fiscal year.

That the Financial Entities Management through Report GEF – SRRA No. 337/2003 in concordance with the Accounting Management, recommends modifying the deferral of provisions authorized through Board Resolutions 114/99, 101/2000, and 102/2000, so that the provision accounted for by the Central Bank of Bolivia for the portfolio received from the former BBA under an Administration Mandate and pending delivery to Banco Mercantil S.A., is established according to the provision regime determined by the Superintendence of Banks and Financial Entities, and that the provision for the balance of the Claims of the BIDESA Bank in Liquidation is made in the current fiscal year.

That Report SANO/242/2003 from the Legal Affairs Management states that it is the attribution of the Board to consider the approval of a resolution that determines what was proposed by the Accounting and Financial Entities Management, modifying Board Resolutions 120/98, 114/99, 101/2000, and 102/2000.

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

Article 1.- From the current fiscal year, authorize the establishment of 100% (one hundred percent) of provisions according to the norms of the Superintendence of Banks and Financial Entities, for the portfolio received in payment in kind from the former BBA.

Article 2.- The establishment of provisions for the 2003 and 2004 fiscal years, authorized by Article 1 of Board Resolution No. 114/99 of December 21, 1999, and in Article 1 of Board Resolution No. 101/2000 of December 19, 2000, will be subject to what is stated in Article 1 of this Resolution.

Article 3.- Accelerate the deadline for the establishment of provisions, authorized in Article 1 of Board Resolution No. 102/2000 of December 19, 2000, to the current fiscal year, for the balance of doubtful recovery credits from BIDESA in Liquidation.

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

La Paz, December 17, 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.