With a view to implementing the 10 measures announced by the Government to mitigate Bolivian exchange difficulties, the Financial System Supervision Authority (ASFI) approved changes to the Regulations on Interest Rates, Commissions and Fees (the Regulations) and the Reporting Regulations. The amendments were announced in ASFI Circular No. 808/2024 of February 20, 2024, published in the Financial Regulation Electronic Gazette (GERF).

  1. Changes to Regulations on Interest Rates, Commissions and Fees

Purpose: According to ASFI, the purpose of the changes to the Regulations is to establish mechanisms to step up transparency in the financial market, by furnishing information to the public and authorities on interest rates, commissions and fees offered by and agreed to with financial entities on their different transactions and services, and to set maximum rates for provision of financial services, in accordance with Bolivia’s Financial Services Law (LSF).

Application: As regards the sphere of application, the changes to the Regulations will be binding upon all Financial Intermediation Entities (EIFs) and Complementary Financial Services Companies (ESFCs) that are duly registered and licensed by ASFI. Basically, this means all banking entities and other financial services companies.

Inclusions and changes: the specific relevant changes included are as follows:

  1. Commissions on transfers abroad: Commissions applied by supervised entities on foreign transfer transactions shall be governed by Annex 1 of the Regulations. Such services shall be free of charge, for transactions made during each half month, for amounts equal to or less than USD 1,000 per customer. For customer transactions exceeding USD 1,000, the commission applicable shall be in line with a band ranging from 5% to 10%.
  2. Commissions on drafts abroad: Commissions applied by supervised entities on foreign draft services shall be governed by Annex 1 of the Regulations. In the case of drafts for amounts equal to or less than USD 1,000, only the cost attributable to the international correspondent shall be applied. For drafts exceeding USD 1,000, the commission shall be in line with a band ranging from 5% to 10%.3.

Deadline: Finally, with regard to implementation of the foreign transfer and draft rates, ASFI established that supervised entities shall have until February 23, 2024 to adjust their rate schedules.

2. Changes to Reporting Regulations.

As for the changes in Reporting Regulations, ASFI, in point 15 of the Regulations, established that the first M030 “Monthly Rates” report must be submitted by the tenth business day of the month of March 2024, with information for the month of February 2024.

Final comment

With the above actions, the measures agreed to by the Government and business organizations to mitigate Bolivia’s US dollar shortage have begun to take shape. These measures are programmatic and, as such, require agility by the Government for their materialization in concrete rules and administrative acts. This ASFI resolution is a good signal to the market and to the entire population of the will to fulfill that.
Yet, while the measure could have a positive impact in the immediate term, it remains to be seen whether a price control (in this case on bank commissions) will lead to damage in the future, as tends to occur in cases of artificial interference between supply and demand.