Resolution 154/2004

RESOLUTION OF THE BOARD OF DIRECTORS NO. 154/2004 SUBJECT: MANAGEMENT OF FINANCIAL ENTITIES – APPROVES DISBURSEMENT OF FINANCIAL SUPPORT FOR THE SOLUTION PROCESS OF MUTUAL TARIJA.

HAVING 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 Norms 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/092/2004 of October 7, 2004, which orders the intervention of the Association Mutual Savings and Loan for Housing Tarija, with the objective of applying the solution procedures or forced judicial liquidation.

Note from the Superintendency of Banks and Financial Entities, SB/ISL/D 63399/2004 of October 8, 2004, requesting support for the solution process of the Association Mutual Savings and Loan for Housing Tarija.

Report from the Management of Financial Entities GEF No. 297/2004 of October 8, 2004.

Report from the Legal Affairs Management SANO No. 267/2004 of October 8, 2004.

CONSIDERING:

That through Resolution SB No. 092/2004, the Superintendency of Banks and Financial Entities, in application of Article 120, paragraph a) of Law No. 1488, has ordered the intervention of the Association Mutual Savings and Credit for Housing Tarija, with the objective of applying the solution procedure established in Title IX, Chapter IV of the aforementioned Law.

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

That Article 125 of Law No. 1488, in its fifth paragraph, states that until January 1, 2005, the support mechanisms under the FRF will be carried out 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 intermediary entity.

That Article 3 of Supreme Decree No. 27025 authorizes the General Treasury of the Nation to support, through the Central Bank of Bolivia, the intervention of non-bank Financial Intermediation Entities when they do not have sufficient liquid assets to cover intervention expenses and liquidity deficiencies to enable the solution process. Likewise, that at the request of the Superintendency of Banks and Financial Entities, the Central Bank of Bolivia on behalf of the General Treasury of the Nation, will disburse said resources in the currency requested, in favor of the intervened entity.

That the Superintendency of Banks and Financial Entities, through note SB/ISL/D-63399/2004 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. 461,635.11 corresponding to 50% of the privileged obligations and additionally $us 213,908.62 and Bs100,000.- in cash, for the support of the solution process of the Mutual Savings and Loan for Housing Mutual Tarija.

That the Management of Financial Entities in its Report GEF No. 297/2004, states that the amounts requested by the SBEF for support of the solution 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 the mentioned request.

That the Legal Affairs Management, in Report SANO No. 267/2004, states that the SBEF 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 enable the solution process of the Association Mutual Savings and Loan for Housing Tarija, 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 Association Mutual Savings and Loan for Housing Tarija Intervened, the sum of $us.461,635.11 (Four hundred sixty-one thousand six hundred thirty-five 11/100 American dollars) corresponding to 50% of the privileged obligations provided for in Article 125 of Law No. 1488, for the support of its solution 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 Tarija Association, of Bs100,000.- (One hundred thousand 00/100 bolivianos) and $us.213,908.62 (Two hundred thirteen thousand nine hundred eight 62/100 American dollars) to cover liquidity deficiencies and enable the solution procedure, contemplated in Article 3 of Supreme Decree No. 27025.

Article 3.- Authorize the Management of Financial Entities 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, October 8, 2004.

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Juan Medinaceli V.

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Enrique Ackermann A. José Luis Evia V.

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Jaime Apt B.