NRP-40
FOREIGN BANKS
Approval: 28/06/2023
Validity: 14/07/2023

THE COMMITTEE OF NORMS OF THE CENTRAL RESERVE BANK OF EL SALVADOR,

CONSIDERING:

I. That Article 26 of the Banks Law establishes that banks constituted in accordance with foreign laws that propose to establish branches in the country, to carry out banking operations through them, must obtain prior authorization from the Superintendency of the Financial System.

II. That Article 27 of the Banks Law establishes the requirements that foreign banks must observe when proposing to request from the Superintendency of the Financial System the authorization referred to in Article 26 of the same Law.

III. That Article 28 of the Banks Law sets out the procedure to obtain authorization so that a foreign bank can establish itself and operate in the country.

IV. That Article 29 of the Banks Law establishes that foreign banks authorized to operate in the country will be subject to inspection and supervision by the Superintendency of the Financial System under the same terms as Salvadoran banks.

V. That Article 4 letter e) of the Law on Supervision and Regulation of the Financial System establishes that the Superintendency of the Financial System will have the power to authorize institutions or entities constituted in accordance with foreign laws that propose to operate as branches in the country and to authorize their closure.

VI. That Article 7 letter b) of the Law on Supervision and Regulation of the Financial System establishes that the supervision of branches of foreign banks established in the country corresponds to the Superintendency of the Financial System.

THEREFORE,

by virtue of the regulatory powers conferred by Article 99 of the Law on Supervision and Regulation of the Financial System,

AGREES to issue the following:

TECHNICAL NORMS FOR THE ESTABLISHMENT OF BRANCHES OF FOREIGN BANKS

NRP-40
FOREIGN BANKS
Approval: 28/06/2023
Validity: 14/07/2023

CHAPTER I
OBJECT, SUBJECTS AND TERMS

Object
Art. 1.- These Norms aim to regulate the requirements and procedures that banks constituted in accordance with foreign laws must comply with, so that the Superintendency of the Financial System authorizes them to establish branches in El Salvador.

Subjects
Art. 2.- The subjects obliged to comply with the provisions established in these Norms are the foreign banks interested in establishing branches in El Salvador.

Terms
Art. 3.- For the purposes of these Norms, the terms indicated below have the following meaning:
a) Supervisory Authority: The authority responsible for the supervision of the foreign bank, in the country of origin; b) Competent Authority: The authority responsible for authorizing an entity to function as a bank in its country of origin, which may or may not be the Supervisory Authority; c) Central Bank: Central Reserve Bank of El Salvador; d) Foreign Bank: Institutions or entities constituted in accordance with foreign laws authorized to operate as banks in their country of origin; e) Identity Document: This may be the Unique Identity Document, Passport, or Residence Card, as applicable; f) Senior Executive: The President, Executive President, Executive Director, General Manager, or acting equivalent, and the executive positions reporting to them; g) Law: Banks Law; h) Branch: An office physically separate from the head office or central office, which may carry out those operations permitted and authorized by the competent authority of the country of origin, whose accounting forms part of the consolidated financial statements of the head office; and i) Superintendency: Superintendency of the Financial System.

CHAPTER II
AUTHORIZATION PROCEDURE

Submission of documents
Art. 4.- The foreign bank interested in establishing a branch in El Salvador must submit to the Superintendency the authorization request, signed by its legal representative or authorized attorney for these purposes, and it must be accompanied by the following documentation:
a) Deed of incorporation, bylaws, and any other document that proves the legal existence of the head office and the power to establish branches abroad; b) Certificate from an internationally known risk rating agency, certifying that the head office of the applicant bank is classified as first-line; c) Economic-financial feasibility study that includes financial bases for the operations to be developed and commercial plans, as well as an organizational and administrative scheme of the company. This study must be prepared by a professional with extensive experience in the formulation and evaluation of projects or by a company backed by professionals of that category. The minimum content of the study is presented in Annex No. 1 of these Norms; d) Certificate issued by the competent authority, stating that the applicant entity is authorized to operate as a bank in its country of origin; e) Agreement of the head office authorizing the establishment of the branch in El Salvador; f) Authorization issued by the competent authority of the head office for the establishment of the branch in El Salvador; g) Report issued by the supervisory authority of the head office, containing a description of the prudential regulation to which it is subject; h) Certification of the agreement of the corresponding body of the applicant institution, in which there is an express declaration that they commit to:
i. Maintain permanently in the Republic of El Salvador, at least one representative with broad and sufficient powers to carry out all acts and contracts that must be celebrated and take effect in the national territory; for which a power of attorney must be conferred on the representative in which it must be clearly and precisely expressed that the represented institution obligates itself to respond unlimitedly inside and outside the country for the acts and contracts celebrated in El Salvador, for which the formalities required by Salvadoran law and those of the country of origin of the head office must be complied with;
ii. Submit to the laws, courts, and authorities of El Salvador, regarding the acts and contracts celebrated in Salvadoran territory and which are to take effect therein; and
iii. Domicile and maintain in the country the amount of capital and capital reserves that, according to the Law, corresponds to Salvadoran banks.
i) Basic financial statements of the last five years, with the corresponding external auditor's report; j) Report from the supervisory authority of the head office, regarding the financial situation of the same, for the last five years; k) Ratings of the last five years, issued by internationally recognized rating agencies; l) For future senior executives within the branch:
i. Curriculum Vitae;
ii. Sworn declaration of not having the disqualifications indicated in Article 33 of the Law, according to the model contained in Annex No. 2 of these Norms; and
iii. When applicable, certificate issued by the General Directorate of Penal Centers, of not having criminal records or sworn declaration before a notary.
m) Name of the firm that will perform the external audit of the branch. This must be registered in the Register of External Auditors of the Superintendency; n) Sworn declaration or valid certification, indicating that the entity has a program or management of information security, business continuity plans, tests developed and test results, capacity to recover and resume service in the event of interruptions; o) Report on the compliance of information security management and business continuity; and p) Valid audit report that includes compliance with the aspects established in letters n) and o) of this article. The request and documentation may be submitted through the means made available by the Superintendency, which may be electronic. In any case, the period referred to in the first paragraph of Article 7 of these Norms will begin to run from the next business day after the request has been submitted.

Legalization of documents
Art. 5.- The documents mentioned in Article 4 of these Norms, except those contained in letters c), i), o) and p), must comply with the apostille procedure, in the case of countries legalized by the Head of the Diplomatic Mission, Consul, Vice-Consul, or Officer in Charge of Consular Affairs of El Salvador, or in their absence, by officials of the Ministry of Foreign Relations from which such documents originate. The documentation presented originating from abroad, both photocopies and signatures appearing therein, must be authenticated or certified by a notary or foreign official, as appropriate, and the respective procedure for legalization of signatures or apostille must be followed.

Art. 6.- Documentation originating from a foreign country, written in a language other than Spanish, to have legal effect in El Salvador, must be translated into this language, in accordance with the Law on the Practice of Notarization of Voluntary Jurisdiction and Other Proceedings.

Authorization procedure for establishing branches of foreign banks Art. 7.- Upon receipt of the authorization request to establish branches of foreign banks in accordance with Articles 4, 5, and 6 of these Norms, the Superintendency will proceed to verify compliance with the requirements defined in the Law and these Norms, having ninety days counted from the date of submission of the request and prior to the report from the Central Bank referred to in Article 13 of these Norms, for the authorization or denial of the authorization request to establish branches of foreign banks.

If the request is not accompanied by complete and properly formatted information, as detailed in Articles 4, 5, and 6 of these Norms, the Superintendency, due to the lack of necessary requirements, may require the applicant to present the missing documents within a period of ten business days counted from the day following the notification, a period that may be extended at the request of the applicant when there are reasons justifying such extension. The Superintendency in the same notice will indicate to the applicant that if the information is not completed within the aforementioned period, it will proceed without further procedure to archive the request, reserving the right to submit a new request, which will give rise to a new procedure.

If after the analysis of the documentation presented in accordance with Articles 4, 5, and 6 of these Norms, the Superintendency has observations or when the documentation or information presented is not sufficient to establish the facts or information intended to be accredited; the Superintendency will notify the respective applicant to remedy the deficiencies communicated or present additional documentation or information requested. The applicant will have a maximum period of ten business days counted from the day following the notification, to resolve the observations or present the additional information required by the Superintendency. The Superintendency may, through a reasoned resolution, extend by up to another ten business days, the period indicated in the previous paragraph, when the nature of the observations or deficiencies notified so requires.

Extension period
Art. 8.- The applicant may submit to the Superintendency a request for extension of the period indicated in the fifth paragraph of Article 7 of these Norms, before the expiration of said period, must express the grounds on which it is based, and propose, if applicable, the relevant proof.

The extension period may not exceed ten business days and will begin from the next business day after the expiration date of the original period.

Suspension of the period
Art. 9.- The ninety-day period indicated in the first paragraph of Article 7 of these Norms, will be suspended for the days that elapse between the notification of the request for information or documentation referred to in the second and fifth paragraphs of said article, until the observations required by the Superintendency are remedied.

Publication of future senior executives
Art. 10.- The Superintendency, prior to granting the respective authorization, and at the expense of the interested parties, must publish the list of future senior executives of the branch, with the object that any person who has knowledge that the aforementioned do not meet the requirements that the Law establishes for directors, may object to the status of these subjects for the performance of the position.

The publication referred to in the previous paragraph will be carried out only once in two printed media of national circulation or another digital publication platform with greater or equal coverage, or on its website, in accordance with the current legal framework. The publication will have the purpose that any person who has knowledge that any of the disqualifications contained in Article 33 of the Law, applies to the future senior executives who will be part of the foreign bank branch, may object to them.

Objections must be submitted in writing to the Superintendency within a period of fifteen days counted from the day following the publication, attaching the relevant proof. The information will have a confidential character. The Superintendency will notify this circumstance to the person objected to, who must appear within a period of eight business days counted from the respective notification, and must pronounce on the opposition raised, being able to attach any kind of proof tending to support their arguments. Upon conclusion of the aforementioned period, the Superintendency will resolve within ten business days on the alleged disqualifications, notifying this circumstance in the manner previously provided.

If any future senior executive is declared ineligible according to what is established in the Law to hold such status, the applicants must remit to the Superintendency within a period of thirty days a new list in which the corresponding future senior executive has been excluded, attaching all documentation concerning the person who replaces them.

Notwithstanding the above, at any time during the authorization process, the Superintendency may declare the ineligibility ex officio or at the request of a party, prior to a hearing of the person objected to within a period of eight business days counted from the day following the notification, for them to exercise their right of defense. Upon conclusion of the aforementioned period, the Superintendency will resolve within ten business days on the alleged disqualifications, notifying this circumstance in the manner previously provided.

Modifications in documentation
Art. 11.- If during the period referred to in the first paragraph of Article 7 of these Norms, any change occurs in the information or documentation presented to the Superintendency in accordance with Article 4 of these Norms, the applicants must remit to the Superintendency the updated information or documentation, within five days following the occurrence of the change.

Additionally, when a change occurs in the information published in the notice referred to in Article 10 of these Norms, the publication must be repeated under the same terms and periods established in said article.

Memorandum of cooperation
Art. 12.- Prior to granting the respective authorization, the Superintendency will sign a memorandum of cooperation with the supervisory authority of the country of the head office of the applicant bank, with the object of coordinating the exchange of information and the mechanisms that enable consolidated supervision, ensuring the confidentiality of such information.

Report from the Central Bank
Art. 13.- In addition to the information required from foreign banks, the Superintendency must have a report from the Central Bank, for which it will provide the necessary data.

The Central Bank will have a period of fifteen business days counted from the receipt of the request by the Superintendency, to remit the report referred to in the first paragraph of this article.

Resolution
Art. 14.- Upon receipt of the report from the Central Bank, the Superintendency will approve or deny the authorization request to establish branches of foreign banks.

In the event that all requirements established in the Law have been met, the Superintendency will grant the established permit and authorization to operate when, in its judgment, the projected financial bases, as well as the seriousness, solidity, and responsibility of the institution, offer protection to the interests of the public.

When the resolution is favorable, the registration in the Commercial Register of the constitutive instruments of the institution in question or a certification of the same will be authorized in the same. If the resolution is denying, the notification will contain the reasoned causes for the denial. The Superintendency will proceed to communicate the corresponding resolution to the applicant within a maximum period of three business days, from the date of its issuance.

CHAPTER III
START OF OPERATIONS

Deposit and submission of manuals
Art. 15.- Within a period of ninety calendar days counted from the date of notification of the resolution containing the authorization for registration in the Commercial Register, the applicants must deposit in the Central Bank the capital assigned to the branch; and submit the manuals of functions and operational procedures, with the requirements contained in Annex No. 3 of these Norms, and the description of the furniture and equipment to be used, the surveillance systems, and the insurance to be contracted.

Authorization of start of operations
Art. 16.- Having met all requirements, verified their internal controls and procedures, and registered the constitutive instruments in the Commercial Register, the Superintendency will issue a certificate that the branch may start operations. The certificate will be valid for one year. The Superintendency will publish, at the expense of the branch, in the Official Diary and in two newspapers of national circulation or another digital publication platform with greater or equal coverage, or on its website, only once the aforementioned resolution, in accordance with what is established in Article 20 of the Law.

Extension for start of operations
Art. 17.- If after the period indicated in the first paragraph of Article 16 of these Norms has elapsed, the entity has not started its operations, it may request from the Superintendency an extension period of up to one hundred and eighty days, for which it must present the documentation supporting such request, through the means made available by the Superintendency, which may be electronic.

Revocation of authorization
Art. 18.- If upon expiration of the period or extension referred to in Articles 16 and 17 of these Norms, the branch has not started operations, it will be considered that there is an impossibility to achieve the main purpose; therefore, the Superintendency will proceed to revoke the authorization to operate.

Start of operations
Art. 19.- The branch must inform the Superintendency, through the means made available, which may be electronic, thirty days in advance, the following:
a) The day it will open its doors to the public; b) List of executive personnel and facsimile of authorized signatures; and c) Tax Identification Number (NIT) of the branch.

CHAPTER IV
CLOSURE OF OPERATIONS

Cessation of operations
Art. 20.- In the event that the head office of the foreign branch established in El Salvador decides to suspend or terminate its operations, it must notify the Superintendency at least sixty days in advance, through the means made available, which may be electronic, attaching at least the following documentation:
a) Date when public service will cease; b) Agreement of the head office authorizing the cessation of operations of the branch in El Salvador; and c) Action plan on the liquidation of operations of the branch in the country, which must contain at least the following:
i. Schedule of the cessation of operations and responsible parties for its execution;
ii. Procedure by which the entity will make payments of obligations to its clients and creditors, especially those derived from deposits; and
iii. Process of notification to clients regarding the cessation of operations and details of the contact information designated to handle inquiries related to the communication, clearly defining the channels for receiving such inquiries.
The Superintendency will proceed to review the documentation presented and may request adjustments it deems pertinent. Likewise, it will accompany the entity in the process of cessation of operations.

Preference of depositors
Art. 21.- Depositors and creditors domiciled in El Salvador will have preference over the assets of the foreign bank branch.

NRP-40

FOREIGN BANKS

Approval: 28/06/2023
Validity: 14/07/2023

CHAPTER V

OTHER PROVISIONS AND VALIDITY

Change in the ownership control of the parent company Art. 22. In the event of a change in the ownership control of the parent company owning the branch in El Salvador, this must be reported to the Superintendency, attaching the necessary information for the identification of the new shareholders, all for the purpose of reconsidering the authorization of the branch.

Update of parent company information
Art. 23. Within 30 days following the date on which any modification occurs to the legal regime to which the parent company is subject, its bylaws, a merger or integration with other institutions, or any other relevant fact associated with the entity, this must be reported to the Superintendency.

Sanctions
Art. 24. Non-compliance with the provisions contained in these Standards shall be sanctioned in accordance with what is established in the Law on Supervision and Regulation of the Financial System.

Repeals
Art. 25. Norms for the Establishment of Foreign Bank Branches (NRP-13), approved on November 21, 2001, by the Board of Directors of the Superintendency of the Financial System, whose Organic Law was repealed by Legislative Decree No. 592 containing the Law on Supervision and Regulation of the Financial System, published in Official Diary No. 23, Volume No. 390, dated February 2, 2011.

Transitory
Art. 26. Applications presented in accordance with what is established in Norms for the Establishment of Foreign Bank Branches (NRP-13) and which were pending at the time these Norms entered into force, shall be continued and concluded in accordance with the regulations under which they began.

Unforeseen Aspects
Art. 27. Aspects not provided for in the matter of regulation in these Norms shall be resolved by the Central Bank through its Standards Committee.

Validity
Art. 28. These Norms shall enter into force as of July 14, 2023.

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Annex No. 1

NRP-40
FOREIGN BANKS
Approval: 28/06/2023
Validity: 14/07/2023

CONTENT OF THE ECONOMIC-FINANCIAL FEASIBILITY STUDY

The economic-financial feasibility study of the project must provide the necessary information that allows determining the feasibility of the project, taking into account the conditions of the Financial System and the economy; for such purposes, the study must contain at least:

a) Project Description
i. General Aspects

1. Name, age, profession, domicile, and nationality of the organizers;
2. Name and probable domicile of the institution.

ii. Project Summary
The summary must contain at least:
A brief review of the objectives, policies, strategies, source of resources, market niche, and other relevant aspects of the project; framing within this perspective the insertion of the new financial entity into the market. It must also expose how the project will contribute to the economic and social development of the country and, if it belongs to a business group, its relationships and main characteristics must be indicated, attaching information on its legal and financial situation.

b) Market Study
The market study must contain an analysis of the economic-financial environment and the pertinent aspects that have provided the basis for the viability of the project, particularly those that allow sizing the market to be served; in this sense, the market study must comprise at least the following:

i. Target Market Analysis
Determination of the market niche or target market to which the services offered by the new entity will be oriented, explaining in detail the reasons that justify the decision.

ii. Determination of Demand
In order to know if the new institution, as well as the financial products and services it will offer, will have demand that makes the project viable, a market research must be conducted that will be based on:

1. Evaluation of the financial system and social and economic variables
   This evaluation must provide elements that allow determining if the financial market admits new competitors and if the new institution will be able to gain market share to generate demand for the products and services it will offer. As part of the establishment of demand, an analysis of the macroeconomic environment must be conducted, considering variables such as income (national and family), economic growth (GDP), means of payment (M2), external sector, fiscal deficit or surplus, credit, inflation, employment, interest rates (active and passive), population savings capacity, and other relevant variables. Regarding this, the sources of information and methodologies used must be indicated. Based on the above information, the demand for the services and financial products that the new entity will offer must be projected.

2. Market Research
   Market research must be conducted based on surveys or other acceptable techniques, which allows evaluating, among other aspects, if the new institution and the services to be offered will have acceptance and demand from users of the financial system.

An annex to the market study must present: (a) the objectives of the study, (b) the forms used to carry out the surveys, including copies of the forms used, (c) the methodology employed to establish the sample to be surveyed, and (d) the process used for the statistical treatment of the collected information.

iii. Supply Analysis
The supply analysis must widely consider the conditions under which competition will take place in the financial market, taking into account the financial products and services already existing and the market niche in which it is intended to position itself. The characteristics of the main products and services offered by the financial market and those to be offered by the new entity must be indicated. The aspects, characteristics, and advantages of the services and products to be offered, in relation to what the market offers, will be highlighted; this in order to determine what aspects will make its participation in the market possible; in addition, projections on the supply of said products or services and the bases supporting the projections must be included.

c) Technical Study
It will contain what is related to the areas of organization and operation, specifying the following information:

i. Organization
The internal organization of the institution will be described, as well as the different administrative bodies, specifying the number of personnel, specialty, experience, academic level, and location within the organization; the following must be attached:

1. Organization (Organizational Charts and Job Description Manual).
2. Name, address, experience, and academic level of the main executives.
3. Number of technical and administrative personnel.
4. Operation Manuals to be used.

ii. Location and Description
Probable geographic location of the head office and agencies, as well as a technical explanation of that decision.

iii. Information Systems

1. Software and Information Systems to be used.
2. Computer equipment and its communication systems (teleprocessing, network, etc.), storage capacity.
   When authorization for the start of operations is requested, the above information must be expanded in the report required by letter (o) of Article 4 of these Norms.

d) Economic-Financial Study
Once it is determined that there is a potential market for the financial products and services to be offered and that there is no technological impediment to carrying out the project, the amount and source of economic resources available to carry out the project must be explained. In addition, the viability of the project must be supported by financial projections and other indicators. In this section, at least the following must be included:

i. Capital

1. Amount of capital to be contributed by the parent company.
2. If it belongs to a business group, information on its relationships and main characteristics must be provided, including legal and financial documentation.
3. Define the use that will be given to the amount of capital with which operations will begin, such as:
   i) Investments in fixed assets. ii) Organization and startup expenses. iii) Working capital. iv) Placements. v) Others.

ii. Policies
Based on the policies that the new institution will implement, it must be indicated how the opportunities offered by the financial market in particular and the economy in general will be exploited, explaining at least:

1. Credit policy.
2. Investment policy.
3. Deposit policy.
4. International division policies.
5. Commission collection policy.
6. Dividend distribution policy.
7. Personnel policy.
8. Interest rate (active and passive) and commission policy.
9. Equity strengthening policy.

In the case of credit policy, the following aspects must be explained at minimum: internal controls, disbursement authorization, collection procedures, supervision and follow-up of the use of credit and the financial situation of the debtor, requirement of guarantees or collateral, maximum maturities, maximum portfolio concentration (individual limits, economic sectors, guarantees), risk assessment.

iii. Financial Projections
Financial projections must comprise at least 5 years of results, presenting the following financial statements:

1. Balance sheet.
2. Income statement.
3. Statement of changes in equity.
4. Cash flow statement.
5. Break-even point.
6. Financial intermediation margin.
7. Profitability analysis.
8. Net present value, indicating the discount rate used.
9. Internal rate of return of the project.
10. Equity fund requirement, according to Article 41 of the Banks Law.

Additionally, market share must be estimated and financial sensitivities performed on the project, considering the prevailing conditions in the financial market and the economy; particularly related to variables and financial policy.

iv. Basic Assumptions Supporting Financial Projections The figures contained in the projection model and its sensitivities must be based on known facts and circumstances, as well as on coherent estimates and courses of action. For each of the assumptions used, the pertinent explanations must be attached. At minimum, the following will be presented:

1. Macroeconomic
   i) Economic growth (GDP). ii) Inflation (domestic and external). iii) Monetary liquidity (growth of means of payment (M2)). iv) Exchange rate. v) Financial policy (legal reserve, currency matching, interest rates, open market operations, others).

2. Microeconomic
   Interest rates of:
   i) Loans (Placements). ii) Foreign currencies (deposits abroad and others). iii) Investment in securities (Government, Central Bank, private). iv) Time deposits. v) Savings deposits. vi) Issuance of securities. vii) Loans from the Development Bank of the Republic of El Salvador (BANDESAL). viii) Obligations with the exterior. ix) Other liabilities.

The active and passive interest rates used for projections must take into account the level of prevailing interest rates in the market, exchange expectations, and the evolution they have had in recent years.

3. Growth Rates
   ii) Availability. iii) Loans (short, medium, and long term). iv) Foreign currencies. v) Investment in securities. vi) Movable and immovable assets. vii) Other assets. viii) Demand deposits. ix) Time deposits. x) Savings deposits. xi) Issuance of securities. xii) Loans from the Development Bank of the Republic of El Salvador (BANDESAL). xiii) Obligations with the exterior. xiv) Equity. xv) Letters of credit. xvi) Guarantees and bonds.

4. Other Variables
   i) Overdue portfolio. ii) Prudential reserves for doubtful recovery credits. iii) Deposit structure. iv) Administrative and service expenses (present the greatest detail possible). v) Tax burden. vi) Commission rate (active and passive). vii) Other income and expenses. viii) Discount rate used to determine net present value.

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Annex No. 2

NRP-40
FOREIGN BANKS
Approval: 28/06/2023
Validity: 14/07/2023

MODEL OF SWORN DECLARATION FOR SENIOR EXECUTIVES

To the Superintendency of the Financial System Present.

I, _____________________________, of _______ years of age, profession or occupation ___________________, nationality ______________, domicile of ____________________, with Identity Document No. ____________________, in view of having been proposed to be part of _______________________________________________, declare under oath that:

1. I am not a director, official, or employee of any bank, financial institution, or official credit institution not exempted by the Banks Law.
2. I am not in a situation of bankruptcy or insolvency and have never been judicially qualified as responsible for a fraudulent or negligent bankruptcy.
3. I am not a debtor of credits in the Financial System to which a prudential reserve of fifty percent (50%) or more of the balance has been constituted.

For the better analysis of my debtor situation, I detail below the credits I currently have in the Financial System:

Credit No.	Amount Granted	Bank (or financial institution)
_________	_____________	________________
_________	_____________	________________
_________	_____________	________________

I also declare that I am a shareholder in more than twenty-five percent (25%) of the social capital of the entities detailed below:

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4. During the period I was an administrator (or official, in case) of Financial System institutions, I did not participate in the original approval of credits to which, in accordance with the corresponding norms, prudential reserves equivalent to twenty-five percent (25%) or more of the capital and capital reserves of the respective entity were constituted as a whole.

For more information about that institution, I detail below the entities in which I served as administrator (or official, in case) and the period in which I served as such:

Financial Institution	Period
______________________________	____________
______________________________	____________
______________________________	____________

5. I have never been convicted of crimes against property or against the Public Treasury.
6. I was never a director or administrator of a bank, financial institution, or other entity part of the Financial System that was intervened by the supervisory authority, in which responsibility was attributed to me.
7. I have not participated directly or indirectly in the commission of serious infractions of the laws and norms governing the Financial System.

That my spouse and relatives of the first degree of consanguinity are:

Name	Class of Kinship
______________________________	_______________
______________________________	_______________
______________________________	_______________
______________________________	_______________

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Annex No. 3

NRP-40
FOREIGN BANKS
Approval: 28/06/2023
Validity: 14/07/2023

MINIMUM REQUIREMENTS OF THE JOB DESCRIPTION AND OPERATIONAL PROCEDURES MANUALS

a) Job Description Manual
It must contain the organizational chart and describe the functions of each of its components, even those of temporary units, such as credit committees, of which it must also be exposed how they are integrated.
The organization plan must contain the adequate segregation of banking operations and the functions necessary for the control and supervision of transactions. For such purposes, it is necessary to create at minimum the following units or positions:
i. Cash;
ii. Deposits;
iii. Credit processing;
iv. Loan control;
v. Loan recovery via judicial means;
vi. International operations;
vii. Custody of documents and securities;
viii. IT;
ix. Accounting;
x. Internal audit;
xi. Portfolio rating; and
xii. Loan and related credit control.

It must also include a section referring to the administration of the manual, which must have modification procedures, the subjects who can propose modifications, and those authorized to keep it in their custody.

b) Operational Procedures Manual
This Manual must describe the internal control procedures (administrative and accounting) for each of the active, passive, and complementary operations that the branch will carry out.
Internal control must be described by transaction cycles, preferably using the flowchart technique combined with narratives.
It must also include a section referring to the administration of the Manual, which must have modification procedures, the subjects who can propose modifications, and those authorized to keep it in their custody.

i. Main Transaction Cycles
The cycles considered mandatory, depending on the operations carried out by the branch, are the following:

1. Cycles for each type of deposit: Must comprise the following stages: deposit opening, withdrawals and remittances, replacement of passbooks and safeguards, and settlement of the deposit;
2. Loan Cycles: Must comprise the following stages: processing of the application and its respective controls, processing of deed preparation and its controls, granting, processing of guarantee registrations with their respective controls, and recoveries.
   In addition to the above, special recovery procedures via judicial means must be elaborated, with the description of the corresponding controls; as well as the policies to initiate this process and those related to the recognition of losses when the results of the judicial process determine the irrecoverability of the debts;
3. Guarantees and Bonds Cycles: Must include the stages described above, insofar as applicable, establishing control of the contracts granted;
4. Letters of Credit Cycles: Must comprise from the opening, taking into account its modifications, until settlement;
5. Collection Cycles: From the receipt of documents until the reimbursement of the collected sum;
6. Foreign Currency Purchase-Sale Cycle: Must include the procedures related to purchase and those of sale; and
7. Investment Portfolio Cycles: Must comprise the acquisition, sale, and redemption of securities and repo transactions.

Each of the cycles described above must comprise the following aspects:

1. Adequate segregation of functions;
2. Description of the distribution of the original and copies of accounting documents;
3. Timeliness in which transactions or accounting operations will be recorded;
4. Quantification of transactions and operations;
5. Authorization and approval systems for transactions and operations;
6. IT procedures (The activities to be carried out by means of computers must be described generally, indicating the base documents to introduce information into the system, the authorizations to access the system, and the reports that will be issued); and
7. The form of organization of document files.

ii. Accounting Systems and Procedures
In addition to the cycles described above, procedures must be designed on the following aspects:

1. The way in which accounting operations will be recorded in each of the legalized books and generally in auxiliary accounting records;
2. The manner of relating accounting vouchers to entries in the books and records mentioned above;
3. The authorization processes of accounting vouchers generated by the accounting department;
4. The calculation and accounting of interest and commissions of active operations; and
5. The calculation and accounting of interest and commissions of passive operations.

iii. Information Systems
This section of the Manual must deal with the data processing systems that will be used in the different activities of an economic nature and must deal at minimum with the applications of deposits, loan portfolio, accounting, and cash operations. In each of these programs, at least the following must be described:

1. General description of the system and main processes;
2. Relational design of files;
3. Detailed description and design of files and fields;
4. User manual for the systems of:
   i) Unique client identification number. ii) Accounting. iii) Cash. iv) Loans. v) Checking deposit account. vi) Savings deposit account. vii) Time deposit accounts.
5. List of users who will have access, indicating the user's hierarchical level and the type of access they will have to each of the options;
6. Detail of the reports generated by the system, specifying for each one the frequency with which it is generated, the number of copies, and how they are distributed; and
7. If the systems are being developed, describe the procedure to test and approve the programs, as well as the responsibilities of these activities.

It is also a requirement to add the following information:
i) Characteristics of the central and peripheral equipment; ii) Detailed characteristics of development tools; iii) Printed copy of source programs or tape backup copies; iv) Copy of the guarantee or maintenance contract of the central and peripheral equipment; v) Copy of the guarantee or maintenance contract of the programs, if these have been contracted to consultants; vi) Procedures to perform Back up; vii) Contingency plan in case of loss of information and/or failures in the computer equipment; viii) Procedure for handling access keys; ix) Hygiene norms for computer equipment and its peripherals; x) Authorized norms for the maintenance of the systems; and xi) Graphical scheme on the interrelation and data communication of the central system and its peripheral systems (Agencies).

Annex No. 3
NRP-40
FOREIGN BANKS
Approval: 28/06/2023
Validity: 14/07/2023
iv. Annexes
This section must contain the different forms that the entity will use to contract with the public, to attend to transactions with its clients, and for the recording of accounting operations, but especially those related to:
i) Application forms, contracts, securities, remittances, withdrawals, and other documents that will be used in active and passive operations; ii) Models of the legalized accounting books that will be used; and iii) Forms for accounting documents for income (credit notes, receipts, cash summaries), expenses (checks, vouchers, etc.), and journal entries.