Resolution 170/97

BOARD RESOLUTION NO. 170/97 SUBJECT: FINANCIAL SYSTEM - AUTHORIZES PARTIAL SUBROGATION OF DEPOSITORS' RIGHTS AT BANCO INTERNACIONAL DE DESARROLLO S.A. (BIDESA) IN LIQUIDATION.

SEEN: The Banking and Financial Entities Law No. 1488 of April 14, 1993. The Central Bank of Bolivia (BCB) Law No. 1670 of October 31, 1995. Resolution No. 036/97 of the Financial System Development Fund and Support for the Productive Sector (FONDESIF) of December 11, 1997. Resolution of the Superintendence of Banks and Financial Entities (SBEF) No. SB/143/97 of December 12, 1997. Board Resolution No. 151/97 dated September 15, 1997. Report from the Financial System Management GSF No. 194/97 of December 12, 1997. Report from the Economic Policy Advisory ARMyF No. 70/97 of December 12, 1997. Report from the Legal Advisory ALEG No. 319/97 of December 12, 1997.

CONSIDERING: That the Financial System Development Fund and Support for the Productive Sector, through Resolution No. 036/97, has decided to reject the request for financial support to BIDESA, due to non-compliance with the prior and special pronouncement conditions established by the Superintendence of Banks and Financial Entities and the requirements of FONDESIF.

That the Superintendence of Banks and Financial Entities, by Resolution No. SB/143/97 of December 12, 1997, has ordered the takeover of BIDESA in order to proceed with its forced liquidation due to having incurred the causes 2) and 3) of Article 120 of Law 1488.

That Law 1488, in its Article 128, states that the BCB may subrogate the rights of extra-judicial creditors mentioned in articles 1386, 1410, and 1611 of the Commercial Code.

That Article 38, subsection e) of Law 1670, establishes that in cases duly qualified by its Board, the BCB may subrogate the rights of depositors of financial entities, total or partial, acquiring these rights for cash or in installments.

That the Main Economic Policy Advisory in its report ARMyF No. 70/97, recommends that the subrogation of deposits be limited to US$ 5,000, in order not to affect the fulfillment of the monetary program targets for the current management period.

That according to Report GSF No. 194/97 from the Financial System Management, 93% of the total public deposit accounts in BIDESA have balances lower than or equal to US$ 5,000. That in such virtue, said Management suggests that policies be adopted oriented towards protecting small savers.

That on an extraordinary basis and in order to protect the small savers of BIDESA, it has been deemed convenient to partially subrogate their deposits, granting them a treatment similar to that of the depositors of the San José Obrero Savings and Credit Cooperative Ltd. in liquidation.

That it corresponds to the Superintendence of Banks and Financial Entities the recovery of the resources committed by the BCB in this partial subrogation.

That in the opinion of the Legal Advisory in Report ALEG No. 319/97, the Institution's Board is authorized to authorize the partial subrogation of depositors' rights.

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

Article 1.- Authorize the use of BCB financial resources for the partial subrogation of the rights of the depositors of the Banco Internacional de Desarrollo S.A. (BIDESA) in liquidation, according to the criteria established in this Resolution.

Article 2.- The maximum subrogation amount per depositor will be equivalent to US$ 5,000.00 (Five thousand 00/100 United States Dollars), which will be paid in the originally agreed currency.

Article 3.- The return of deposits with subrogation of rights to the BCB will be the responsibility of the Liquidator Superintendent, legally designated by the Superintendent of Banks and Financial Entities, who will be responsible for qualifying the claims and consolidating them, as well as verifying the identity and right of the depositors. It will be the responsibility of the Liquidator Superintendent to give public notice to the savers and depositors of BIDESA regarding the partial return of deposits.

Article 4.- The partial subrogation ordered will be limited to deposits constituted in BIDESA up to October 31, 1997. The BCB Board will expressly authorize the return of deposits constituted after that date, after a special review and confirmation by the Superintendence of Banks and Financial Entities.

Article 5.- Depositors and savers who wish to adhere to the provisions of this Resolution must present themselves before the entity in liquidation with the original documents that accredit their creditor rights, subjecting themselves to the following procedure: a) Depositors will fill out and sign the "Deposit Declaration" which appears in Annex 1 of this Resolution. b) In cases where the same depositor has several deposits, in one or different modalities, the capital will be consolidated into a single amount on the cutoff date established in Article 4, proceeding with the BCB subrogation only up to the sum defined in Article 2. c) If the consolidated deposit claim is equal to or less than the maximum subrogation amount, the probative documents of the right will be delivered to the Liquidator Superintendent, duly endorsed in favor of the BCB. d) If the consolidated deposit claim is greater than the maximum subrogation amount, the documents will be presented to the Liquidator Superintendent so that he notes the partial payments on them. e) In all cases, for the total amount received, depositors will sign the document named "Assignment of Rights for Restitution and Payment" (Annex II of this Resolution).

Article 6.- The Liquidator Superintendent will safeguard the documents indicated in the preceding article, until the respective reconciliation and accounting presentation that must be submitted to the BCB.

Article 7.- In application of Article 128 of Law 1488 and Article 38, subsection e) of Law 1670, the subrogation of the rights of the depositors of BIDESA will occur in favor of the BCB, by right of operation, in the amounts qualified and required by the Liquidator Superintendent. The rights of the BCB will enjoy preference with respect to any other creditor according to law. The Liquidator Superintendent will elaborate a Specific Plan for the recovery of BIDESA assets which will be presented to the BCB, with the approval of the Superintendent of Banks and Financial Entities, within a period not greater than one hundred eighty (180) days from the start of the liquidation process. This Plan will also be presented to the Judge of the liquidation, together with the list of approved claims.

Article 8.- The Specific Plan mentioned above will include, among other aspects, the actions and measures most advisable for the protection of creditors' rights, as well as the periodic sending of financial and accounting information to the BCB and the presentation of annual financial statements with external audit opinion.

Article 9.- For the disbursement of the resources destined for the partial subrogation, the Liquidator Superintendent will send a written request to the BCB.

Article 10.- The Presidency and General Management are charged with the compliance and execution of this Resolution.

13.XII.97

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Juan Antonio Morales A.

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Armando Pinell S. Jaime Ponce G.

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Juan Medinacelli V. Fernando Campero P. ____________________ Juan Pablo Zegarra A.