Resolution JPRFM-2025-021-F: Incorporation of General Provision Second Allowing Private Financial Entities to Grant Credit Operations with 100% State-Guaranteed Collateral

RESOLUTION No. JPRFM-2025-021-F
THE BOARD OF FINANCIAL AND MONETARY POLICY AND REGULATION CONSIDERING:

That, Article 226 of the Constitution of the Republic of Ecuador prescribes that public servants and persons acting by virtue of state authority shall exercise only the competencies and powers attributed to them in the Constitution and the Law;

That, Article 227 ibid states that Public Administration constitutes a service to the community governed by the principles of effectiveness, efficiency, quality, hierarchy, coordination, planning, among others;

That, the first clause of Article 303 of the constitutional norm determines that the formulation of monetary, credit, exchange, and financial policies is the exclusive faculty of the Executive Branch and will be implemented through the Central Bank of Ecuador;

That, Article 309 of the Constitution provides that the national financial system is composed of the public, private, and popular and solidary sectors, and that each of these will have specific and differentiated control norms and entities, which will be responsible for preserving their security, stability, transparency, and solidity;

That, on October 13, 2025, the Organic Reform Law of the Organic Code of the Monetary and Financial System was published in the Sixth Supplement of Official Register No. 142;

That, Article 13 of the Organic Code of the Monetary and Financial System, Book I, creates the Board of Financial and Monetary Policy and Regulation, part of the Executive Branch, as an organ with functional, technical, and institutional autonomy, and in its decisions, responsible for the formulation of monetary, credit, financial, securities, insurance, and prepaid comprehensive health care services policy and regulation. The Board of Financial and Monetary Policy and Regulation will be the highest governing body of the Central Bank of Ecuador;

That, Article 17 of the aforementioned Code, in its pertinent part, determines that:

"(...) For the fulfillment of these functions, the Board will issue norms in matters within its competence, without being able to alter legal provisions. The Board of Financial and Monetary Policy and Regulation may issue regulations by segments, economic activities, and other criteria. It may even reform or repeal regulations from the former Board of Monetary Policy and Regulation, the Board of Financial Policy and Regulation, or the Board of Monetary and Financial Policy and Regulation. All norms and policies issued by the Board of Financial and Monetary Policy and Regulation in the exercise of its functions, duties, and powers must be backed by duly substantiated technical and legal reports (...)";

That, Article 18 ibid establishes the specific functions of the Board of Financial and Monetary Policy and Regulation in the financial sphere, among which are the following: "(...) 2. Issue regulations that allow maintaining the integrity, solidity, sustainability, and stability of the national financial system (...) in accordance with what is provided in Article 309 of the Constitution of the Republic of Ecuador; (...) 10. Issue the prudential regulatory framework to which financial entities, securities entities, insurance entities, and prepaid comprehensive health care service entities must be subject, a framework that must be coherent and not give rise to regulatory arbitrage (...)";

That, Article 24 of the same Code provides that the acts of the Board of Financial and Monetary Policy and Regulation enjoy the presumption of legality and will be expressed through resolutions that will have binding force, which will govern from their publication in the Official Register, or from the date of their issuance when so determined by the Board, in accordance with the subject matter;

That, Article 25.2 ibid determines that the Technical Secretariat of the Board of Financial and Monetary Policy and Regulation is exercised by the Central Bank of Ecuador, and Article 25.3 establishes as its functions the preparation of technical and legal reports supporting regulatory proposals, providing technical and administrative support to the Board of Financial and Monetary Policy and Regulation, and those assigned to it by said Board;

That, Article 190 of the aforementioned Organic Code establishes that entities of the national financial system must maintain a level of capital sufficiency, in order to adequately support their current and future operations; to absorb losses not covered by provisions for risk assets; to sustain credit, liquidity, market, and operational risks; and for any other risk arising from macroeconomic performance;

That, Article 210 of the same Organic Code states "Public, private financial entities, and those of segment 1 of the popular and solidary financial sector may not carry out active and contingent operations with the same natural or legal person for a sum that exceeds, in total, 10% of the entity's technical equity. This limit will be raised to 20% if what exceeds the 10% corresponds to obligations secured with guarantees from national or foreign banks of recognized solvency or by adequate guarantees, under the terms dictated by the Board of Monetary and Financial Policy and Regulation. The established credit limits will be determined on the date of original approval of the operations or of each reform made. In no case may the adequate guarantee have a value lower than the total value of the excess (...)";

That, number 4 of Article 211 ibid establishes the exceptions to the limits determined in the aforementioned article, among which it states the following: "4. Active and contingent operations between financial entities, with the restrictions determined by the Board of Monetary and Financial Policy and Regulation";

That, General Provision Twenty-Nine ibid states: "In current legislation where mention is made, indistinctly, of the Board of Monetary and Financial Policy and Regulation, the Board of Monetary Policy and Regulation; or, the Board of Financial Policy and Regulation, replace and understand as 'Board of Financial and Monetary Policy and Regulation'";

That, Chapter I "Constitution, organization, and issuance of authorization for the exercise of financial activities and operating permits of entities of the public and private financial sectors", Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions regulates the regime applicable to entities of the public and private financial sectors.

That, the First Transitory Provision of the Organic Reform Law of the Organic Code of the Monetary and Financial System determines that members of the Board of Financial and Monetary Policy and Regulation, sworn in on September 16, 2025, by the National Assembly, will continue to exercise their functions for the periods for which they were designated and will maintain their labor continuity and acquired rights;

That, through Letter No. T.233-SGJ-25-098, dated September 5, 2025, signed by the Constitutional President of the Republic, addressed to the President of the National Assembly, the list of candidates for the designation of the Members of the Board of Financial and Monetary Policy and Regulation was sent; as well as, the temporality of their stay within the initial period;

That, the Plenary of the National Assembly, on September 16, 2025, designated and

RESOLUTION No. JPRFM-2025-021-F sworn in the members of the Board of Financial and Monetary Policy and Regulation, in the persons of: Gustavo Estuardo Camacho Dávila; Silvia Daniela Moya Arteta; Roberto Javier Basantes Romero; María Isabel Camacho Cárdenas; and, Jeniffer Nathaly Rubio Abril;

That, the Board of Financial and Monetary Policy and Regulation, through extraordinary session No. 009-2025, under mixed modality, on December 31, 2025, reviewed the proposal sent via Memorandum No. BCE-BCE-2025-0345-M, dated December 30, 2025, by the General Manager of the Central Bank of Ecuador to the President of the Board of Financial and Monetary Policy and Regulation; as well as, Technical Report No. BCE-GEEE-071-2025/ BCE-SEMF-100-2025, dated December 29, 2025; and, Legal Report No. BCE-GJ-076-2025, dated December 30, 2025; and,

In exercise of its functions and in accordance with Article 24 of the Organic Code of the Monetary and Financial System, the Board of Financial and Monetary Policy and Regulation, RESOLVES:

Sole Article. - Incorporate as General Provision Second of Chapter I "Constitution, organization, and issuance of authorization for the exercise of financial activities and operating permits of entities of the public and private financial sectors", Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions, the following text:

"GENERAL PROVISION SECOND. - Private financial entities may grant credit operations, which have collateral or guarantee of one hundred percent (100%) in titles issued by the Ecuadorian State and/or the Central Bank of Ecuador, to entities of the public financial sector, provided that the total of operations does not exceed fifty percent (50%) of the total technical equity of the granting entity.

Operations that meet the conditions described in this provision are exempt from the limits established in the first paragraph of Article 210 of the Organic Code of the Monetary and Financial System, Book I. This exception will also be noted in the calculation on the consolidated technical equity of the financial group, if applicable".

SINGLE GENERAL PROVISION. - The Board of Financial and Monetary Policy and Regulation will review annually the provision incorporated by the sole article of this resolution, until November 30, as well as the limit and characteristics of the operations established in the aforementioned article. For the year 2026, the Technical Secretariat, based on the information submitted by the control body, must report on the application of this provision until October 31.

FINAL PROVISION. - This resolution will enter into force from its issuance, without prejudice to its publication in the Official Register.

The publication on the institutional website and the renumbering of the General Provisions of Chapter I "Constitution, organization, and issuance of authorization for the exercise of financial activities and operating permits of entities of the public and private financial sectors", Title II "National Financial System", Book I "Monetary and Financial System" of the Codification of Monetary, Financial, Securities, and Insurance Resolutions is entrusted to the General Secretariat of the Central Bank of Ecuador.

NOTIFY AND PUBLISH. - Given in the city of Quito D.M., on December 31, 2025.

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THE PRESIDENT
Mgs. Gustavo Estuardo Camacho Dávila

The aforementioned resolution was processed and signed by Master Gustavo Estuardo Camacho Dávila - President of the Board of Financial and Monetary Policy and Regulation, in the city of Quito D.M., on December 31, 2025.- I CERTIFY.
TECHNICAL SECRETARY
Mgs. Jennifer Mishel Carrillo Rosales