Bank Finance and Regulation Survey. Bolivia

Transcription

1 Bank Finance and Regulation Survey Bolivia I. Banks and Financial Institutions Supervision 1. Applicable laws and regulations: Laws: Law No dated Jul. 20, 1990: Law No dated Apr. 14, 1993: Law No dated Oct. 31, 1995: Creates Banking Regulator Regulates Banks and Financial Entities Regulates Central Bank of Bolivia Regulation: Supreme Decree dated April 3, 2002: Updates Law Entities authorities in charge of the control and supervision of banks and financial institutions. Central Bank of Bolivia: The Central Bank of Bolivia is an autarchic public entity. The Central Bank of Bolivia is the only monetary and exchange control authority in Bolivia whose purpose is to procure stability of the internal purchasing power of local currency. Relationship between the Central Bank and the government is through the Ministry of Economy. Banking Regulator: The Banking Regulator is a public entity whose purpose is to control the activities of financial entities and to maintain a healthy and efficient financial system. 3. Financial activities under supervision and respective license The following financial services require a license from the Banking Regulator: Financial Intermediation And Auxiliary Services: Financial Services Non-Banking Financial Intermediary Services 4. Non-regulated financial and banking activities. Not applicable 5. Non-permitted financial and banking activities. 1

2 - It is illegal to provide financial services on a regular basis without a license granted by the Banking Regulator. II. Banking Activities 6. Activities under each license. License for Financial Intermediation And Auxiliary Services: - Activities Permitted: i. Receive money from individuals and entities in the form of deposits, loans, or any other modality for the combined placing with the financial entity s capital in credits or permitted investments. ii. Emit, discount, or negotiate securities and other documents representing obligations. iii. Provide deposit services iv. Issue travelers checks and credit cards v. Operate and administer credit information bureaus vi. Carry out trusts and financial intermediary mandates, manage third person funds, operate compensation chambers, provide bank guarantees. vii. Financial leasing and factoring viii. Appraise other financial institutions - Activities prohibited i. Invest more than 40% of its net worth in branches or subsidiaries abroad ii. Maintain credits that are over 20% of its net worth with a single debtor iii. Give credits that are above a debtor s net worth iv. Hire external auditors that are related to a director or officer v. Chattels and property obtained as result of a debt must be sold within one year of adjudication. License for Financial Services: - Activities Permitted: i. Financial leasing ii. Factoring iii. Warehouse deposits iv. Compensation chambers and credit information bureaus 2

3 License for non-banking financial intermediary services - The following entities that provide non-banking financial intermediary services may petition for a license: Cooperatives, Mutuals, Private Pension Funds 7. Procedures to be followed and met to obtain the different licenses granted by the Banking Regulator: - License for Financial Intermediation and Auxiliary Services i. Filing of petition for license before Banking Regulator. The following documents must be submitted a license petition: 1. Draft bylaws and incorporation deed for a partnership with at least 5 partners. 2. Police and solvency certificates of founders in case they are individuals. 3. Incorporation documents and audited financial balance sheet in case partners are entities. 4. Certificate indicating that at least 10% of the minimum required paid in capital has been deposited in a bank. 5. Foreign banks must incorporate as branches. Incorporation documents of branch must be submitted. ii. Publication of license petition (3 publications within 15 days) iii. Granting of license (60 days after last publication) iv. Incorporation of partnership and payment of 100% of paid in capital (must be completed within 180 days after license has been granted) - License for Financial Services: i. Procedure for the obtainment of a License for Financial Services is the same as for a License Of Financial Intermediation And Auxiliary Services. - License For Non-Banking Financial Intermediation And Auxiliary Services: 8. Legal Structure i. Procedure for the obtainment of a License for Non-Banking Financial Intermediation and Auxiliary Services is the same as for a License Of Financial Intermediation And Auxiliary Services. Entities, however, who provide the mentioned services must incorporate in accordance with what is mandated by the Commerce Code or other applicable laws. - Entities of Financial Intermediation and Auxiliary Services i. Type of legal structure 1. Partnership 3

4 ii. Capital Requirements and own funds 1. 10% of paid in capital iii. Transfer and control of ownership 1. Endorsement of shares iv. Personal requirements and restrictions 1. The following individuals may not own or work for a Entities of Financial Intermediation and Auxiliary Services a. Those who are legally incapacitated b. Those who have been sentenced with the commission of common crimes c. Those who have been charged guilty of economic crimes d. Those who have been responsible of bankruptcy e. Those who have personal checking accounts with the bank in question f. Government officers g. Public officers of state owned financial entities. h. Provided there is no authorization, officers and directors of other financial licensed entities. - Entities of Financial Services (Same as Entities Of Financial Intermediation And Auxiliary Services) - Entities Of Non-Banking Financial Intermediary Services i. Cooperatives: 1. Type of Legal Structure: a. Limited Liability 2. Capital Requirements and own funds: a. Primary capital may not be less than DEG s. 3. Personal requirements and restrictions a. Same as for Entities of Financial Intermediation and Auxiliary Service 4. Transfer and control of ownership a. Quota purchase agreement ii. Mutuals: 1. Type of Legal Structure: a. Non-profit organization 2. Capital Requirements and own funds: a. Primary capital may not be less than DEG s. 3. Personal requirements and restrictions a. Same as for Entities of Financial Intermediation and Auxiliary Service 4. Transfer and control of ownership a. Quota purchase agreement 4

5 iii. Private Pension Funds: 1. Type of Legal Structure: a. Partnership 2. Capital Requirements and own funds: a. Primary capital may not be less than DEG s. 3. Personal requirements and restrictions a. Same as for Entities Of Financial Intermediation And Auxiliary Service 4. Transfer and control of ownership a. Endorsement of shares 9. Deposit Insurance - The Central Bank of Bolivia is the depository of insurance deposits from licensed financial entities. 10. Interest Rate 11. Sanctions - Not fixed. - The following sanctions apply for violations of legal and regulatory dispositions: i. Administrative ii. Civil iii. Criminal 1. Warning 2. Fine 3. Temporary prohibition to operate 4. Revocation of authorization to operate 5. Fines 6. Suspension of powers granted to director and officers III. Bank Secrecy Laws 12. Is client s information protected - A client s information is protected by bank secrecy laws. 5

6 13. Legal framework 14. Sanctions - The lifting of bank secrecy obligations requires any of the following: A court order, a request from the Tax Authorities, or a request from the Banking Regulator. - Destitution and applicable civil and criminal penalties. * * * * * The Lex Mundi member in this jurisdiction is C.R. &F. Rojas Abogados Bank Finance and Regulation Practice Group 6