Resolution No. CD-SIBOIF-707-2-DIC14-2011
Dated 14 December 2011

STANDARD FOR THE REFORM OF ARTICLES 6, 8 AND 10 OF THE STANDARD ON LIMITS OF DEPOSITS, INVESTMENTS AND SECOND-TIER OPERATIONS OF BANCO PRODUZCAMOS

The Board of Directors of the Superintendency of Banks and Other Financial Institutions,

WHEREAS

SOLE

That article 33 of Law No. 640, Law Creating the Development Bank for Production (Produzcamos), published in La Gaceta, Official Gazette No. 223 of 20 November 2007, states that Produzcamos "shall be subject to the oversight, supervision and inspection of the Superintendency of Banks and Other Financial Institutions"; the Board of Directors of the Superintendency of Banks and Other Financial Institutions being empowered to issue special standards on "capital adequacy, classification of assets and portfolio, granting of credit, special supervision and other areas of regulation of specific application for Produzcamos …"

In exercise of its powers;

HAS ISSUED

The following:

Resolution No. CD-SIBOIF-707-2-DIC14-2011 STANDARD FOR THE REFORM OF ARTICLES 6, 8 AND 10 OF THE STANDARD ON LIMITS OF DEPOSITS, INVESTMENTS AND SECOND-TIER OPERATIONS OF BANCO PRODUZCAMOS

FIRST: Reform articles 6, 8 and 10 of the Standard on Limits of Deposits, Investments and Second-Tier Operations of Banco Produzcamos, contained in Resolution No. CD-SIBOIF-623-2-ABR14-2010 of 14 April 2010, published in La Gaceta, Official Gazette No. 130, of 09 July 2010, which shall read as follows:

Article 6. Deposits and investments in securities of financial institutions and other legal entities of the country.- The bank may maintain demand deposits (checking and savings accounts) and time deposits or invest in córdobas or foreign currency, only in securities or instruments issued by the following entities:

a) Financial institutions of the country that have a first-order local risk rating:

1. Demand deposits (checking and savings accounts) or time deposits not exceeding twelve months; and
2. Commercial paper and/or serial negotiable certificates of deposit, registered in the registry that for such
purposes is kept by the Superintendency, with terms not exceeding twelve months. b) Legal entities that issue publicly offered debt securities, registered in the registry that for such purposes is kept by the Superintendency. The acquisition of these securities shall be subject to the following restrictions:
1. Have a local rating of at least BBB or higher or the equivalent used by the respective
rating agency.
2. Issued by Nicaraguan public, private or mixed entities. In the case of mortgage
or other guarantees, these must be located in the national territory.
3. Issued by entities that operate in productive sectors, such as: agricultural, industrial,
export, port and airport administrators, electric power generation, telecommunications, tourism, infrastructure and construction.
The investments referred to in this article may be made in short-term debt securities (up to 360 days), or in other medium- or long-term debt instruments, with residual maturities not exceeding one year.
The deposits and investments indicated in this article must comply with the limits and provisions indicated in
article 8 of this standard.
Article 8. Limits per depositary, issuer or debtor.- In the operations carried out in accordance with articles 5, 6 and 7
of this standard, the bank shall adhere to the following limits:
a) Investments in serial negotiable securities issued in national currency by the Central Government or Central Bank of Nicaragua indicated in article 5 of this standard, without limit. In the event that the serial negotiable securities are issued in foreign currency, up to twenty percent (20%) of the calculation base of the investing institution, per issuer. b) Demand deposits (checking and savings accounts), time deposits not exceeding twelve months and investments in commercial paper and/or serial negotiable certificates of deposit with terms not exceeding twelve months, in córdobas or foreign currency, in financial institutions with a local risk rating referred to in literal a) of article 6 of this standard, up to thirty percent (30%) of the calculation base of the capital of the depositary or issuing institution. c) In investments in publicly offered debt securities referred to in literal b) of article 6 of this standard, up to ten percent (10%) of the calculation base of the investing institution, per issuer.

d) Second-tier operations that the bank carries out with supervised financial institutions and general deposit warehouses, referred to in article 7 of this standard, up to ten percent (10%) of the Bank's calculation base.

e) Second-tier operations that the bank carries out with entities not supervised by the Superintendency referred to in article 7 of this standard, up to ten percent (10%) of the Bank's capital calculation base.

Article 10. Financial analysis.- The bank shall be responsible for verifying that the depositary or issuing entity complies with the requirements mentioned in the preceding Chapters. For such purposes, the bank must carry out, at a minimum, before and while the deposit or investment is maintained, financial analyses of the entities receiving deposits or issuing securities in which it places or invests its resources. These analyses must demonstrate that the entity receiving funds or issuing securities enjoys a solid and solvent financial situation, and be supported by the pertinent documentation no older than twelve months (financial statements, annual reports, etc.).

No financial analysis shall be necessary in the case that the issuing institution is the Central Government or Central Bank of Nicaragua or in the case that the institution receiving funds is rated by a risk rating agency in accordance with the provisions of Article 11 of this standard. For this purpose, the bank must keep a copy of the analysis performed by the risk rating agency and other pertinent documentation no older than twelve months (financial statements, reports, etc.).

SECOND: The bank shall have a period of three months counted from the entry into force of this standard to adjust to the provisions established herein, as well as to the provisions established in the Standard on Limits of Deposits, Investments and Second-Tier Operations of Banco Produzcamos, contained in Resolution No. CD-SIBOIF-623-2-ABR14-2010 dated 14 April 2010, published in La Gaceta, Diario Oficial No. 130, of 09 July 2010. The Superintendent is authorized to extend the aforementioned period upon a justified request by the Bank, and the Superintendent must inform the Board of Directors of such extension.

THIRD: This standard shall enter into force upon its notification, without prejudice to its subsequent publication in La Gaceta, Diario Oficial. (f) A. Rosales B. (f) V. Urcuyo V. (f) Gabriel Pasos Lacayo (f) Fausto Reyes B. (f) illegible (Silvio Moisés Casco Marenco) (f) U. Cerna B. Secretary.

URIEL CERNA BARQUERO
Secretary Board of Directors SIBOIF