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ByLaws

BYLAWS *

BANCO DO ESTADO DO RIO GRANDE DO SUL S.A.

TAXPAYER’S ID n° 92.702.067/0001-96

NIRE 43300001083

Chapter I

Nature, Duration and Head Office

Section I

Nature

Article 1 - BANCO DO ESTADO DO RIO GRANDE DO SUL S/A, in short ‘BANRISUL’, is a mixed-capital company constituted as a Corporation (Sociedade Anônima) on September 12, 1928, according to State Law 459 of June 18, 1928, regulated by State Decrees 4079, 4100, 4102 and 4139 of June 22, July 21, July 26, and September 6, 1928, respectively.

Paragraph 1 - As per State Law 6223 of June 22, 1971, the interest held by the state of Rio Grande do Sul in the Bank´s capital should in no case be lower than 51% (fifty-one percent) of the total voting shares.

Paragraph 2 - The Company has undergone restructuring according to these Bylaws, by which it has adopted the provisions of Federal Law 6404 of December 15, 1976.

Paragraph 3 - With the admission of the Company in the special listing segment named Level 1 of Differentiated Corporate Governance of the Brazilian Securities and Derivatives Stock Exchange - BM&F BOVESPA, the Company, its Shareholders, Administrators and members of the Fiscal Council are subject to the provisions of the Listing Rules of the Level 1 of Differentiated Corporate Governance of BM&F BOVESPA.

Section II

Duration

Article 2 - The duration of the company is indefinite, only depending on the validity of the operating license.

Section III

Head Office and Jurisdiction

Article 3 - The capital city of the state of Rio Grande do Sul is the domicile of the Company for all legal purposes, and the place of the Company´s head office.

Sole paragraph - The Company may, based on the Board of Executive Officers’ initiatives, open or close branches or representative offices in any place in Brazil or abroad, after obtaining authorization from financial authorities.

Chapter II

Capital and Shares

Section I

Capital

Article 4 - The capital stock is R$ 4,396,719,070.54 (four billion, three hundred ninety-six million, seven hundred nineteen thousand and seventy reais and fifty-four cents)[1].

Paragraph 1 - The Annual General Meeting that deliberates on capital increase, through payment, will fix the respective price and payment terms.

Paragraph 2 - The subscriber in arrears with regard to payment of capital will be subject to an adjustment of his debt based on the IGP-DI (General Price Index - Internal Availability) or any other index in its place, for the period in arrears, plus interest at 12% (twelve percent) per annum and a fine of 10% (ten percent). The adjustment will be made within the legal limits applicable to the case.

Paragraph 3 - The capital stock may be increased, as laid down by Article 168 of Law 6404/76, up to the limit of 600 million shares, within the limit for each class of shares established by legislation and regulations, through a decision of the Board of Directors and independent of any amendment to the Bylaws. The Board of Directors will fix the price and the number of shares to be issued, the period and the conditions for payment.

Paragraph 4 - The issue of shares in order to increase the capital, through sale in the stock exchange or through public offering, may exclude the preemptive rights, or reduce the period for exercising them, under Article 171 of Law 6404/76.

Section II

Shares

Article 5 - The capital is divided into 408,974,477 (four hundred and eight million, nine hundred seventy four thousand, four hundred and seventy seven) shares with no par value, of which 205,059,182 (two hundred and five million, fifty-nine thousand, one hundred and eighty-two) common shares, 1,542,559 (one million, five hundred forty-two thousand, five hundred and fifty-nine) class A preferred shares and 202,372,736 (two hundred and two million, three hundred seventy-two thousand and seven hundred thirty-six) class B preferred shares, being the class A preferred shares convertible into common or preferred shares class B.

Paragraph 1 - Both the common shares and the preferred shares will always be registered shares.

Paragraph 2 - Each common share, without restriction, will correspond to one vote at the general meetings of the shareholders.

Paragraph 3 - The registered common shares and registered preferred shares will be maintained as book entry shares without issue of certificates, in depository accounts in the name of their holders in the Company itself, which shall bear the legal depository charges.

Paragraph 4 - The class A preferred shares will be convertible into common or class B preferred shares as established by Article 8 (eight) below. The common shares and class B preferred shares are not convertible.

Paragraph 5 - The state of Rio Grande do Sul, the controlling shareholder is prohibited from selling the class A preferred shares owned by it. However, it can convert them according to Paragraph 4 of this article.

Article 6 - Upon authorization from the Board of Directors, the Bank may buy back its shares, for cancellation or to hold them in treasury in order to sell them at a future date.

Paragraph 1 - The acquisitions mentioned in this article will not reduce the capital and will be made using funds that shall not exceed the available profit balances or reserves in the last balance sheet.

Paragraph 2 - The acquisitions cannot be of the shares owned by the controlling shareholder or shares not yet paid up.

Paragraph 3 - The Bank cannot hold in treasury more than 5% (five percent) of each class of outstanding shares issued by it.

Paragraph 4 - Acquisitions authorized by this article shall strictly comply with the norms laid down by the Brazilian Securities and Exchange Commission in this regard.

Article 7 - Preferred shares, except under the provisions of Paragraph 2 of Article 21 (twenty-one) and Article 40 (fourty) of these Bylaws, shall not have voting rights.

Article 8 - The class A preferred shares shall confer on their holders the following rights:

(i) priority in the receipt of fixed non-cumulative preferential dividend at 6% (six percent) per year, calculated on the result of dividing the capital amount by the number of shares comprised in it;

(ii) the right to a share, after the common and class B preferred shares are paid, in the dividend equal to that paid to such shares, in any other dividends or bonuses in cash distributed by the Company, under the same conditions as the common and class B preferred shares, with an increment of 10% (ten percent) on the amount paid to such shares;

(iii) share in the capital increases resulting from capitalization of reserves under the same conditions as common and class B preferred shares;

(iv) priority in the repayment of capital, without premium;

(v) the right guaranteed by Article 85 (eighty-five) of these Bylaws;

(vi) convertibility into common or class B shares at any time, at the discretion of the shareholder, through a notification to the Company.

Article 9 - The class B preferred shares confer upon their holders the following rights: (i) share in the capital increases resulting from capitalization of reserves under the same conditions as common and class A preferred shares; (ii) priority in the repayment of capital, without premium; and (iii) the right guaranteed by Article 85 (eighty) of these Bylaws. Class B preferred shares are not convertible.

Chapter III

Corporate Purpose, Operations and Organization

Section I

Corporate Purpose

Article 10 - The purpose of the Company is to carry out borrowing, lending and other ancillary operations inherent to the respective authorized portfolios (commercial, real estate lending - 2nd to 8th Regions, and credit, financing and investment, leasing and development and investment portfolios), including exchange operations, in accordance with legal provisions and regulations.

Sole Paragraph - Within the norms established by the Central Bank of Brazil and these Bylaws, the Bank may own interest in other companies.

Section II

Operations

Article 11 - The Company´s operations will cover all the banking activities compatible with the nature of a multiple-service bank, which are or will be granted to it by the monetary authorities and may be or should be implicit or understood within the corporate objectives.

Article 12 - The Company may acquire the property necessary for its installations or those for its expansion, within the appropriate technical limits and, exceptionally, those that are suitable to safeguard its interests.

Sole Paragraph - Assets acquired from those responsible for loans with difficult or doubtful settlement, when not of use to the Company, shall be sold at the moment and manner established by the Board of Executive Officers in compliance with the pertinent legal and normative provisions.

Section III

Organization

Article 13 - To carry out its operations, the Bank shall have as many Advisory Services and Departments necessary for carrying out its corporate objectives.

Paragraph 1 - The Company shall have a Department dedicated to rural lending, which will centralize all types of rural lending operations.

Paragraph 2 - Rural lending operations with funds allocated or granted by the shareholder, the state of Rio Grande do Sul, are restricted to persons domiciled in the same state.

Article 14 -Long-term operations use funds from BNDES (the Brazilian development bank) on lending and are limited to 80% (eighty percent) of the Company´s net equity.

Chapter IV

Management of the Company

Article 15 - The management of the Company, in the manner envisaged in these Bylaws, rests with the Board of Directors and the Board of Executive Officers.

Paragraph 1 - It is a condition to the election to a position in the of Board of Directors or Board of Executive Officers the compliance with the requirements established by legislation and regulations, and that the member, resident in Brazil, has the technical qualification required for the duties of the position, which must be demonstrated upon academic or professional experience or other deemed relevant, by means of documents.

Paragraph 2 - Names of the nominees for the Board of Executive Officers should first be approved by the Legislative Assembly of the state of Rio Grande do Sul.

Paragraph 3 - Members of the Board of Directors and the Board of Executive Officers shall take office after signing the terms of consent in the Company´s records, with the waiver of guarantee of management, and only after signing the Statement of Consent From Senior Managers according to the regulations governing Level 1 corporate governance practices of the São Paulo stock exchange, and the regulation relating to the Market Arbitration Panel.

Article 16 - Members of the Board of Directors or the Board of Executive Officers cannot exercise any identical function in financial institutions in which the Bank or the state do not own direct or indirect shareholding control.

Article 17 - The following cannot jointly exercise the functions of the member of the Board of Directors or the Board of Executive Officers: a) parents or children, adoptee or adopted, collateral relatives and others up to the second degree by civil law; b) persons belonging to the same Company, except if it is a Sociedade Anônima; c) two or more executive officers, managers or equivalent positions of the same Company.

Paragraph 1 - In case of impediments and incompatibilities above, those with the highest number of votes will assume office.

Paragraph 2 - If voting is tied, the oldest nominee will be considered elected and, if the age is the same, decision will be by draw of lots.

Article 18 - For each session they take part, members of the Board of Directors shall receive remuneration approved for them, in each fiscal year, by the Annual General Meeting convened for the purpose of Article 132 (one hundred thirty-two) of Law 6404 of December 15, 1976.

Article 19 - The Annual General Meeting convened for the purpose of Article 132 (one hundred thirty-two) of Law 6404 of December 15, 1976 will set the total monthly or annual remuneration of the Board of Executive Officers members.

Paragraph 1 - The General Shareholders’ Meeting, in the fiscal years during which mandatory dividend and employees’ profit sharing are paid, may grant bonuses to members of the Bank‘s Board of Executive Officers, provided that the sum does not exceed 50% (fifty percent) of the Board members’ annual salary, nor five thousandths of the profits (Article 190 of Law No. 6404/76), whichever limit is lower.

Paragraph 2 - Members of the Board of Executive Officers who are also members of the Board of Administration shall not accumulate the remuneration of each of the functions and shall be entitled only to the remuneration of the Executive Officer.

Chapter V

Board of Directors

Section I

Composition

Article 20 - The Board of Directors will be composed of at least 7 (seven) and at most 9 (nine) members, elected at the General Meeting of the Company and feasible at any time, with a unified term of 2 (two) years, allowed, at the maximum, 3 (three) consecutive reinstatement.

Paragraph 1 - The members of the Board of Directors shall be elected without specific designation, being the controlling shareholder, the State of Rio Grande do Sul, responsible to designate, among them, the Chairman and the Vice Chairman.

Paragraph 2 - The Regional Councils of Economy, Accounting and Administration are assured to the right of the appointment of a representative to compose the Board of Directors, respecting the conditions imposed by paragraph 1 of article 15 of these Bylaws. The indication will be made through a triple list presented to the controlling shareholder, being empowered to each Board to indicate a name. Among the indicated, the controlling shareholder may choose one of them.

Paragraph 3 - The term of office of the members of the Board of Directors will extend until the inauguration of their substitutes.

Article 21 - The following rules will be observed at the Board of Directors member’s election process by the Shareholders’ General Meeting: I - It is assured to the minority shareholders holding ordinary shares the right to elect 1 (one) member of the Board of Directors, and II - It is assured to the minority shareholders holding preferences shares who represent, together, at least, 10% (ten percent) of the share capital of the Company, excluding the controlling shareholder, the right to elect and destitute 1 (one) member of the Board of Directors in separated voting at the General Meeting.

Article 22 - At least 25% (twenty-five percent) of the Board of Directors should be Independent Members, as laid down by Paragraph 2 below.

Paragraph 1 - When, as a result of compliance with the percentage referred to in the caput of this article, a fractional number of directors results, rounding up to the whole number: (i) immediately above, when the fraction is equal or higher than 0.5, or (ii) immediately below, when the fraction is lower than 0.5.

Paragraph 2 - For the purpose of these Bylaws, an "Independent Director" is one who: (i) has no relation with the Company, except interest in the capital; (ii) is not the controlling shareholder, spouse or related up to the second degree, or is not or has not been, in the past 3 (three) years, related to the Company or any entity related to the controlling shareholders (persons related to public educational and/or research institutions are excluded from this restriction); (iii) has not been in the past 3 (three) years, employed or was an Executive Officer of the company, the controlling shareholders or the holding company of the company; (iv) is not the supplier or buyer, directly or indirectly, of the Company´s products and/or services at a volume that implies loss of autonomy; (v) is not the employee or manager of the company or entity offering or requiring the Company´s services and/or products; (vi) is not the spouse or relative up to the second degree of any manager of the Company; and (vii) does not receive any other remuneration from Company than as the board member (cash earnings from interest in the capital are excluded from this restriction).

§ 3° - Will also be considered Independent Members those elected by minority shareholders holding ordinary or preferences shares, and or indicated by the controlling shareholder according to paragraph 2 of article 20 of these Bylaws, who answer the requisites on the paragraph 2 of this article.

Section II

Replacement

Article 23 - In case of vacancy on the Board of Directors, the Board, after consulting the controlling shareholder, the state of Rio Grande do Sul, shall designate the replacement to exercise the function until the next Annual General Meeting. The vacancy shall be filled with voting of the minority shareholders at the first annual general meeting.

Paragraph 1 - Resignation with the permission of the Board of Directors will not result in a vacancy.

Article 24 - The Chairman of the Board of Directors, in case of vacancy, absence or temporary impediments, shall be replaced by the Vice Chairman.

Sole Paragraph - The vacancy, absence or temporary impediment referred to by this article does not depend on notice or notification to third parties and can be done merely by the replacement signing the actions that the officer being replaced is authorized to carry out.

Section III

Meetings

Article 25 - The Board of Directors shall meet ordinarily at least once per month and extraordinarily, when required. Decisions shall be valid when at least five of its members, one of them the Chairman or his/her statutory replacement, are present.

Article 26 - The decisions of the Board of Directors shall be taken by majority vote of those present at the meeting.

Sole Paragraph - If a decision is tied, the Chairman of the Board of Directors or his/her statutory replacement, besides the personal vote, shall have the casting vote.

Article 27 - The work and decisions of the Board of Directors shall be recorded in the Company´s books by means of minutes, which may be summarized, registering the events, matters discussed, decisions taken, disagreement, protests, declaration of vote and other necessary items, signed by the Chairman and other board members present.

Paragraph 1 - For the minutes to be valid, it is enough if the number of members of the Board of Directors present needed to constitute the majority required for decision-making, sign them.

Paragraph 2 - The documents or proposals submitted at the meeting and the declarations of vote, protest and other papers recorded in the minutes shall be numbered and filed at the Company within six months after the term of office of the Board of Directors.

Paragraph 3 - The Board of Directors, through two or more of its members present at the meeting, may, at the interested member request, authenticate a specimen or copy of the proposals, declarations of vote, disagreement or protest made.

Paragraph 4 - From the minutes of the Board of Directors’ meetings, which contain decisions affecting third parties, certificates are extracted with a summary of the facts and the transcription of the decisions taken, which will be filed with the Board of Trade and published according to legislation. These certificates can be validated merely by the signature of the Chairman of the Board of Directors or his/her statutory replacement.

Section IV

Powers

Article 28 - The Board of Directors is empowered to:

1. Appoint the Company´s executive officers and confer on them their respective duties in accordance with the provisions of these Bylaws,

2. Remove the Company´s executive officers in consultation with the controlling shareholder, the state of Rio Grande do Sul,

3. Lay down the general business guidelines of the Company, in compliance with the governmental strategy of the controlling shareholder, as well as review and approve the long-term strategic and annual business plans submitted by the Executive Officers,

4. Monitor the activities of the Executive Officers, examine at any time the Company’s books and documents, request information about contracts signed or are about to be signed, and any other acts,

5. Decide on convening the general meeting of the shareholders when they deem appropriate or in the case of Article 132 (one hundred thirty-two) of the Lei de Sociedades por Ações (Corporate Law),

6. Manifest itself on the management report and accounts of The Board of Executive Officers, approving the allocation of the profit,

7. Previously manifest itself on the provision of bail or guarantee by society, when more than 5% (five percent) of the net equity of the company determined by the last semiannual balance sheet,

8. Fix, annually, the sum of subsidies and grants to be distributed by the Board of Executive Officers, in compliance with the provisions of these Bylaws,

9. Approve the plans and promotional budgets of the Company and its subsidiaries,

10. Appoint and remove the independent auditors, in compliance with these Bylaws,

11. Organize and amend the Bylaws of the Board of Directors,

12. Set the maximum debt limit per client, including business group, as a percentage of the Bank´s net equity, while the Board of Executive Officers may approve credit and risk limit operations up to the limit of 3% (three percent) of aforementioned net equity,

13. Authorize the Company to buy back its shares under the terms of Article 6 (six) of these Bylaws, for cancellation or to be held in treasury, objecting, in this last, its posterior alienation,

14. Establish, annually, the marketing budget based on technical criteria for market monitoring and control, and focused on marketing and institutional strategy, on building and in strengthening customers and community relationship,

15. Elect and dismiss the members of the Audit Committee, Eligibility and Compensation Committee and the Risk Committee,

16. Approve the operational rules of the Audit Committee, Eligibility and Remuneration Committees and Risk Committee as amended, and to have knowledge of the activities of the committees for their reports.

17. Establish Management compensation.

Article 29 - The Chairman of the Board of Directors is empowered to:

1. Convene and chair the meetings of the Board of Directors and coordinating their activities,

2. Convene the Bank´s Annual General meetings and establish their respective agenda,

3. Comply with and ensure that the provisions of these Bylaws, the decisions of the Board of Directors and the General Meetings are complied with,

4. Use the casting vote in case of tied votes at the Board of Directors’ meeting,

5. Authenticate copies or certificates of minutes and other documents of the Board of Directors,

6. Name relaters, where applicable, to study and forward the matters under the power of the Board of Directors for voting,

Sole Paragraph -In the hypotheses mentioned by Article 23 (twenty-three) of these Bylaws, the Vice Chairman of the Board of Directors is empowered to replace the Chairman and validly exercise the actions mentioned in the first paragraph of this article.

Chapter VI

Board of Executive Officers

Section I

Composition

Article 30 - The Company shall have a Board of Executive Officers, with executive functions, composed of a Chief Executive Officer, a Deputy Chief Executive Officer and up to seven executive officers, whether shareholders or not, resident in Brazil, who meet the requirements of Article 15 (fifteen) of these Bylaws.

Paragraph 1 - One of the Executive Officers shall exclusively be in charge of the Asset Management Department under the regulations of the National Monetary Council and the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários - CVM), and will not be accountable for other activities affecting the Department.

Paragraph 2 - One of the Executive Officers shall mandatorily be appointed as Investor Relations Officer, position that can be combined with other functions of the Board, pursuant to regulations issued by the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários - CVM).

Article 31 - The Chief Executive Officer, Deputy Chief Executive Officer and other members of the Board of Executive Officers shall be elected or reelected for a term of three years, by the Board of Directors, subject to the following conditions:

a) The Chief Executive Officer and the Deputy Chief Executive Officer will necessarily be chosen from the Board of Directors,

b) One of the members of the Board of Executive Officers must compulsorily be selected from among employees with more than ten years of service provided directly to the Bank and who meet the requirements of Article 15 (fifteen) of these Bylaws,

c) The positions of Chairman of the Board and Chief Executive Officer or CEO of the Company must not be exercised by the same person,

d) The positions of Deputy Chief Executive Officer and member of the Board of Directors may be accumulated with the functions of the Board of Executive Officers.

e) The mandate of the Board of Executive Officers will extend until the inauguration of their substitutes.

Article 32 - The Board of Directors shall assign special designations to the Executive officers, according to the functions it assigns them.

Section II

Replacement

Article 33 - In case of any vacancy on the Board of Executive Officers, the Board of Directors shall name the replacement to exercise the function until the end of the term subject to item "b" of Article 30 (thirty) mentioned above, where applicable.

Sole Paragraph - Any absence with the permission of the Board of Executive Officers shall not constitute a vacancy.

Section III

Meetings

Article 34 - The Board of Executive Officers shall ordinarily meet at least once a week and, extraordinarily, when required. Decisions are valid if at least four of its members are present.

Article 35 - Provisions of Section III of Chapter V of these Bylaws, with the adaptations specific to this organ, are applicable to the Board of Executive Officers meetings.

Section IV

Powers

Article 36 - The powers and duties of the Board of Executive Officers are:

1. To comply with and ensure that the basic laws of the Bank, the decisions of the Annual General Meeting and the Board of Directors´ meetings are complied with;

2. To propose to the Board of Directors, until the last ordinary general meeting of the Board of Directors of the previous year, business and operations plan of the Bank for the following annual financial year,

3. To organize the internal service regulations of the Bank and amend them when required,

4. To authorize the provision of guarantees, sale of assets and the transfer or renunciation of rights, subject to the pertinent provisions in these Bylaws,

5. To establish general and uniform norms for appointment, promotion, punishment, dismissal, leave, absence, salaries, bonuses and other benefits for employees not in positions of trust, delegating authority for execution of these norms,

6. To create, modify and remove positions or functions of trust, setting for them the respective commissions and benefit amounts, appoint, punish, dismiss, grant leave to the holders of such positions or functions,

7. To distribute and invest the profits while respecting, within the limits of the earnings of each half-year, the compulsory requirement of distribution of fixed and minimum dividends laid down by these Bylaws and other legal norms and regulations about dividends in kind,

8. To set up and close down branches and representative offices in any place in Brazil or abroad,

9. to prepare, review and propose annually, to the Board of Directors, until the last Board of Directors’ ordinary general meeting of the previous year, the long term strategic plan with risk and opportunity analysis for, at least, the next 5 (five) following years, indicating the principal guidelines about management policy, human resources, investments and technology, products and services,

Article 37 - The Chief Executive Officer is empowered:

1. To coordinate the Board of Executive Officers meetings, exercising, in addition to his vote, the casting vote in case of a tie in decisions,

2. To ensure that the decisions taken at the Shareholder’s General Meeting, the Board of Directors and the Board of Executive Officers are carried out, and ensure that the Bank´s basic principles are complied with,

3. To represent the Bank, actively and passively, in court or in its relations with third parties, to contract loans, sell assets and properties, waive and renounce rights,

4. To constitute the Bank´s attorneys-in-fact, specifying in the instrument the actions or operations they can practice and the duration of such power of attorney which, in case of judicial power of attorney, may be for an indefinite period,

5. To designate the Bank´s representatives in court,

6. To present the annual report on the Bank´s operations and those of the Board of Executive Officers, illustrated with the respective financial statements, to the Annual General Meeting, after consulting the Board of Directors on such documents,

7. To exercise other functions conferred on him by the Board of Directors, and

8. Appoint and remove the Ombudsman.

Article 38 - In case of vacancy, absence or temporary impediment of the Chief Executive Officer, the Deputy Chief Executive Officer is empowered to replace him and validly exercise, under the following hypotheses, the actions laid down in the previous article.

Paragraph 1 - When the Deputy Chief Executive Officer, under the hypotheses envisaged by this article, is unable to replace the Chief Executive Officer, any of the Executive Officers, who have or do not have any specific designation assigned, temporarily or permanently, can replace the Chief Executive Officer, validly carrying out the actions authorized for the Chief Executive Officer, on such occasions.

Paragraph 2 - The vacancy, absence or temporary impediment referred to by this article does not depend on notice or notification to third parties and can be done merely by the replacement signing the actions that the officer being replaced is authorized to carry out.

Chapter VII

Fiscal Council

Section I

Composition

Article 39 - The Company shall have a permanent Fiscal Council composed of five members and an equal number of alternate members elected annually by the Annual General Meeting. Members to be elected to the Fiscal Council must be natural persons resident in Brazil, who have university level education and senior management experience in financial institutions of the National Financial System or other companies

Sole Paragraph - Cannot be elected members to the Fiscal Council, beyond those mentioned in the second paragraph of article 162 of Law 6404 of December 15 of 1976, those who are themselves Executive Officers and Board of Director’s members, or related to those, in the conditions previewed in article 17 of these Bylaws.

Article 40 - Owners of preferred shares without voting rights may, in separate voting, elect one member and his alternate to the Fiscal Council; minority shareholders shall have equal rights. The Regional Economic, Accounting and Administration Councils are assured of the right to indicate a representative, through a list provided in triplicate, for one of the vacancies in the Fiscal Council reserved for the majority shareholder. The controlling shareholder may select one among the nominees.

Paragraph 1 - The members of the Fiscal Council elected by the minority shareholders and by holders of preferred shares, in case of absence or impediment, may be replaced only by their respective alternate members.

Paragraph 2 - Other members of the Fiscal Council, in case of absence or impediment, shall be replaced by any alternate member.

Paragraph 3 - Members of the Fiscal Council should sign the Statement of Consent laid down by the Regulations of the Market Arbitration Panel.

Section II

Functioning

Article 41 - The Fiscal Council shall ordinarily meet once a month and extraordinarily when required. Decisions are valid if taken by at least three of its members present.

Article 42 - With the specific adaptations to its functioning, the meetings of the Fiscal Council are also governed by Section III Chapter V of these Bylaws.

Section III

Powers

Article 43 - The Fiscal Council, in addition to the duties and powers given by it by the Lei de Sociedades por Ações, must meet when convened by the Board of Directors or the Board of Executive Officers and submit a report on the matters assigned to it.

Section IV

Remuneration

Article 44 - The monthly remuneration of members of the Fiscal Council shall be fixed by the Annual General Meeting and cannot be lower, for each member, than one tenth of the average remuneration of each Executive Officer.

Sole Paragraph - The alternate member of the Fiscal Council is entitled to the remuneration of the sitting member replaced, in proportion to the number of meetings he participated in the month.

Chapter VIII

Audit Committee

Section I

Composition

Article 45 - The company will have a permanent Audit Committee, in compliance with the requirement of the National Monetary Council (CMN - Conselho Monetário Nacional) and applicable legislation, which can be shared with societies controlled by the Company, composed by three (03) members who comply to requisites for the function exercise according to the rules and legislation in force, elected by the Board of Directors at the first meeting following the Ordinary General Meeting, with two-year mandate, dismissible at any time and may be reappointed to the maximum legally permitted.

Paragraph 1 - In the Committee members’ election act, the Coordinator will be appointed.

Paragraph 2 - Most of the Audit Committee’s member should be independent and at least one member of the Board of Directors that is not part of the Board of Executive Officers should include the Committee.

Paragraph 3 - The Committee’s members will take possession after the homologation, by the Central Bank of Brazil, and the respective election acts.

Article 46 - The Audit Committee should directly report to the Board of Directors.

Article 47 - Committee members must be natural persons resident in the country who have professional formation in higher education and technical training that qualify them for this function, in addition to meeting the conditions for the exercise of positions in statutory bodies of institutions authorized to operate by the Central Bank of Brazil, which at least one of them must have a background in accounting and financial institutions auditing.

Article 48 - In addition to the previous Article, the following are the basic conditions for a member of the Audit Committee:

I - is not or should not have been, in the twelve months before being nominated: a) an executive officer of the institution or its associated companies; b) employee of the institution or its associated companies; c) technical person responsible, executive officer, manager, supervisor or any other member with managerial function, of the unit involved in audit work for the institution; d) member of the Fiscal Council of the institution or its associated companies;

II - should not be the spouse, or direct, collateral or affinity relatives, up to second degree of persons mentioned in items "a" and "c" of clause I;

III - not receive any other type of remuneration from the institution or its associated companies, not related to his function as a member of the Audit Committee;

IV - should not hold any licensed position at the state government level;

V - is not or should not have been, in the five months before appointment, in any office or function at the state government level.

Article 49 - The Audit Committee member can return to such organ in the company only at least three years after the end of his earlier term.

Section II

Replacement

Article 50 - In case of any vacancy in the Audit Committee, the Board of Directors shall designate the replacement to exercise the function until the end of the term of the person replaced.

Paragraph 1 - Absence with the permission of the Board of Directors shall not result in a vacancy.

Paragraph 2 - The function of member of the Audit Committee cannot be delegated.

Section III

Remuneration

Article 51 - The Audit Committee members’ monthly remuneration shall be set by the Board of Directors that nominates them, according to their professional qualifications, rules and applicable legislation.

Section IV

Functioning

Article 52 - The Audit Committee shall hold ordinary meetings, in accordance with the operational rules of its functioning, and extraordinary, when necessary, acting validly whenever all of its members are present.

Sole Paragraph - It is allowed the participation of members of the Committee in meetings via teleconferencing or videoconferencing, with the subsequent signing of the respective minutes.

Section V

Powers

Article 53 - Constitutes the Audit Committee assignments:

I - establish its own operating rules, which must be approved by the Board of Directors, formalized in writing and made available to shareholders;

II - prepare an annual work plan, containing the description of activities, defining the nature and extent of the information needed to conduct its task and performance of activities;

III - issue technical advice to the Management of the Bank upon the audit company to be hired to provide independent audit services, and recommend the replacement of the provider of such services, if deemed necessary, observing the legal procurement rules governing the Bank;

IV - review, prior to publication, quarterly and half-yearly financial statements, including notes to the financial statements, management reports and independent auditor’s review report;

V - Evaluate the effectiveness of independent and internal audits regarding the verification of compliance with legal and regulatory provisions applicable to the Bank, in addition to internal regulations and codes;

VI - evaluate the implementation by the Management of the recommendations made by the independent and internal auditors;

VII - establish and disclose procedures for receiving and processing noncompliance information with legal provisions and regulations applicable to the Bank, in addition to internal regulations and codes, including specific procedures for service protection and confidentiality of information;

VIII - recommend, to the Board of Executive Officers of the Bank, the correction and improvement of policies, practices and procedures identified within the scope of its duties;

IX - meet at least quarterly with the Board of Executive Officers of the Bank, with the independent auditors and with the Internal Audit to verify compliance with their recommendations or inquiries, including those with regard to the planning of the respective audit work, formalizing the contents of such meetings in minutes;

X - meet with the Fiscal Committee and Administration, upon request, to discuss policies, practices and procedures identified within their respective competences,

XI - invite, to attend its meetings, members of Management, employees, service providers or other collaborators who hold relevant information or whose constant topics on the agenda are relevant to their area of expertise,

XII - annually evaluate the performance and the overall effectiveness of the Committee through self-evaluation reports, forwarding the result of this work to the Board of Directors,

XIII - other assignments determined by the Central Bank of Brazil and by the applicable legislation, and

XIV - elaborate, at the end of the half year in June 30 and 31 December, a document named Audit Committee’s report, containing: (i) activities exercised at the scope of theirs attributions, in the period (ii) institutional intern control system effectivity evaluation, with emphasis in compliance with Central Bank of Brazil’s provisions issued and with evidences of detected disabilities, (iii) description of recommendations presented to the Executive Officers, with evidence of those non-obeyed and respective justification, (iv) effectivity evaluation of independent and intern audit, including about verifying compliance of legal provisions and norms applicable to the institution, beyond regulations and intern codes, with evidence of detected disabilities, (v) quality evaluation of accounting statements relative to the respective period, with emphasis on the application of accounting practices adopted in Brazil and in the compliance of rules edited by Central Bank of Brazil, with evidence of detected disabilities.

Paragraph 1 - The Audit Committee should maintain the Audit Committee Report at the disposal of the Brazilian Central Bank and the Board of Directors for at least five years after it is prepared.

Paragraph 2 - The Audit Committee should publish, together with the half-yearly financial statements, the summary of the Audit Committee Report, providing the main information contained in the document.

Chapter IX

Ombudsman’s Office

Article 54 - The Ombudsman will be permanent, will have the assignment to provide final instance answer to the demands of customers and users of products and services that have not been resolved through the Bank’s primary service channels; act as a communication channel between the Company and clients and users of its products and services, including the mediation of conflicts; and to report the ombudsman activities to the Board of Directors or, in its absence, to the Board of Executive Officers of the institution.

Paragraph 1 - The Ombudsman will act in behalf of the Company and other companies controlled by this.

Article 55 - The Ombudsman‘s assignments include the following activities:

a) attend, register, instruct, analyze and provide formal and proper treatment to complaints of clients and users of products and services;

b) provide information to the applicants about the status of the complaints, advising on the ten-day reply period;

c) forward the final response to the demand observing the established deadline;

d) keep the Board of Directors or, in its absence, the Board of Executive Officers of the institution, informed about problems and deficiencies detected in the fulfillment of their duties and on the outcome of the measures adopted by the institution‘s management to address them, and

e) prepare and forward to the Internal Audit, the Audit Committee, when existent, and to the Board of Directors or, in its absence, the Board of Executive Officers of the institution, at the end of each semester, a quantitative and qualitative report on the activities undertaken by the Ombudsman in fulfillment of their duties.

Article 56 - The Ombudsman’s Office will be administered by the Ombudsman, selected from the Bank’s employees for a term of 1 (one) year, and may be extended, who shall be appointed and removed by the Chief Executive Officer.

Paragraph 1 - May be designed Ombudsman the Company’s permanent staff employee who possess: (i) large understanding of the Company’s activities and its products, services, processes and systems, and (ii) technical condition to perform the functions attribute to the office, including assimilate the questions submitted to the Ombudsman’s Office, make administrative consults to the sectors whose activities were questioned and direct the obtained replies.

Paragraph 2 - The Ombudsman may be destitute by the Executive Officers at any time, during the validity of his term, in case of non-compliance with the obligations inherent to the office or in case he comes to present performance below to what is expected by the Company.

Article 57 - The Ombudsman’s Office shall be provided with adequate working conditions and its functioning will be guided by transparency, independence, impartiality and exemption.

Article 58 - The Ombudsman will have access to the necessary information to prepare an adequate response to complaints received, with full administrative support, and may request information and documents for the exercise of their assignments.

Chapter X

Eligibility and Compensation Committee

Section I

Composition

Article 59 - The company will have an organizational component named Eligibility and Compensation Committee, which will act in the Company’s behalf and its controlled, elected by the Bank’s Board of Directors, will be composed by three (3) members, individuals residing in the country with professional compatible to college degree and technical training compatible with the duties of the position, in addition to meeting the conditions for the exercise of positions in statutory bodies and other financial institutions authorized to operate by the Central Bank of Brazil, with a term of three (3) years, dismissible at any time and that may be renewed up to the maximum period permitted by law.

Paragraph 1 - Among the members selected to integrate the Eligibility and Compensation Committee, one must not be Administrator.

Paragraph 2 - Among the members chosen to integrate the Eligibility and Compensation Committee, one of them will be nominated by the Board of Directors to hold the Coordinator’s position.

Paragraph 3 - The members of the Eligibility and Compensation Committee will take office at the first meeting held after the election.

Article 60 - In the event that a position on the Eligibility and Compensation Committee becomes vacant due to replacement, removal, resignation, death, proven impediment, invalidity, loss of mandate or any other hypothesis set forth in law, the Board of Directors will appoint a substitute to the vacant position until the end of the replaced member’s term of office

Paragraph 1 - The temporary absence of any member with the permission of the Board of Directors shall not constitute a vacancy.

Paragraph 2 - The functions of a member of the Eligibility and Compensation Committee are non-transferable.

Section II

Remuneration

Article 61 - The members of the Eligibility and Compensation Committee shall be remunerated, as established by the Board of Directors.

Section III

Functioning

Article 62 - The Eligibility and Compensation Committee will meet, ordinarily, once a month, according to their functioning operational rules, and extraordinarily, when needed.

Section IV

Powers

Article 63 - The duties of the Eligibility and Compensation Committee are:

Help the controlling shareholder in the requisites analysis and nomination’s veto and Management, Fiscal Council members and Statutory Committee’s evaluation.

To prepare the compensation policy for the Bank’s Management and its subsidiaries, proposing the various forms of fixed and variable compensation to the Bank’s Board of Directors and its subsidiaries, as well as the benefits and specific recruitment and severance packages;

To supervise the implementation and operation of the compensation policy for the Administrators of the Bank and its subsidiaries;

To review, annually, the compensation policy of the Bank’s Management and its subsidiaries on an annual basis, recommending any relevant corrections or improvements to the respective Boards of Directors;

To propose to the Bank’s Board of Directors and its subsidiaries the total compensation of the Administrators to be submitted to the respective Annual Shareholders’ Meetings, pursuant to Article 152 of Brazilian Corporation Law 6404 of 1976;

To evaluate future scenarios, both internal and external, and their possible impacts on the compensation policy of the Bank’s Management and its subsidiaries;

To analyze the compensation policy of the Bank’s Management and its subsidiaries in relation to market practices, with a view to identifying any significant discrepancies and proposing any necessary adjustments;

To ensure that Bank’s Management’s compensation policy and its subsidiaries is permanently compatible with the institutions’ risk management policy, targets and current and expected financial situation;

To request clarification from the Bank’s Executive Officers Board and its subsidiaries or any of their members;

To invite employees with proven knowledge of their field to provide additional clarifications; and

Follow any other attributions determined by the Central Bank of Brazil.

Article 64 - The Eligibility and Compensation Committee shall prepare, on an annual basis, the Compensation Committee Report within ninety days as from December 31, named: "Eligibility and Compensation Committee Report", which will be presented to the Board of Directors, in the first meeting after the Shareholder’s General Meeting.

Paragraph 1 - The Eligibility and Compensation Committee shall present the information for each Banrisul Group subsidiary.

Chapter XI

Risk Committee

Section I

Composition

Article 65 - The Company will have a Risk Committee, which will be permanent functioning, composed by at least 03 (three) and at most 5 (five) member with a two year term, nominated and destitute by the Company’s Board of Directors at any time, in the terms predicted in the National Monetary Council (Conselho Monetário Nacional - CMN) legislation.

Sole Paragraph - The participation function on the Risk Committee is not delegable.

Section II

Functioning

Article 66 - The Committee shall meet, ordinary, once a month, according to the operational rules of its functioning, and extraordinary when needed.

Section III

Powers

Article 67 - The Risk Committee must coordinate its activities with the Audit Committee and will have the powers to:

a) propose, with at least an annual periodicity, recommendations to the Board of Directors about the subjects referenced on the article 48, paragraph 2 of the 4.557 Resolution of the National Monetary Council (Conselho Monetário Nacional - CMN).

b) evaluate the appetite levels for risks fixed on the Company’s Appetite for Risks Declaration and the strategies for its managing, considering individual and integrated risks.

c) supervise the risk executive officer (CRO) acting and performance, who is nominated by the Company to manage risks.

d) supervise the compliance, by the Executive Office, on the Company’s Appetite for Risks Declaration terms.

e) evaluate the adhesion level to the structure process of risk management to the established politics, and

f) keep records of its deliberations and decisions.

Chapter XII

General Meeting

Section I

General Provision

Article 68 - The General Meeting’s convocation, holding and deliberations shall be according to the legal provisions and, subordinately, to these Bylaws.

Article 69 - Before starting a meeting, shareholders shall sign the "Attendance Record", indicating their name, nationality, residence, and the number and type of shares held by them.

Article 70 - The business of the General Meeting shall be opened by the Chairman of the Board of Directors or his statutory replacement, who will immediately request the shareholders to elect the presiding board, composed of the Chairman and Secretary.

Section II

Annual General Meeting

Article 71 - Annualy, in the first four months following the end of the fiscal year, there will be an Annual General Meeting to examine the material referred to in Article 132 (one hundred thirty-two) of the Lei de Sociedades por Ações.

Section III

Extraordinary General Meeting

Article 72 - The Extraordinary General Meeting shall be convened whenever the Company´s business demands it.

Chapter XIII

Committees

Section I

Composition

Article 73 - The Company will have 15 (fifteen) organs to assist the Board of Executive Officers, named:

a) Banking Management Committee;

b) Economic Management Committee;

c) Business Management Committee;

d) Administrative Management Committee,

e) Internal Controls Management Committee,

f) Information Technology Management Committee,

g) Credit Committee,

h) Personnel Management Committee,

i) Marketing Management Committee,

j) Third Party Resources Committee Level I,

k) Third Party Resources Committee Level II,

l) Corporate Risk Committee,

m) Treasury Committee,

n) Recovering and Loan Restructuring Management Committee,

o) TI Demands Prioritization Committee.

Sole Paragraph - Each Committee shall have at least 4 (four) and at most 12 (twelve) members.

Article 74 - Members of the Committees will be the Unit Superintendents, Superintendent of Advisory Boards and the Controller, named by the Board of Executive Officers, and, by appointment of the Board of Executive Officers, administrators of companies in which Banrisul participates with 50% (fifty percent) or more of the capital stock.

Sole Paragraph - The Banking Management Committee shall be composed of Executive Officers and Coordinators of other Committees.

Article 75 - The Committees may be subdivided into groups based on the service needs and interests of the Board of Executive Officers.

Paragraph 1 - Each Committee or group shall have a permanent Coordinator who, in case of impediment, can be replaced by a coordinator to be nominated by members of the Committee in writing.

Paragraph 2 - The Committee or Group Coordination is entrusted with convening and presiding over the respective organ meetings.

Section II

Organization, duties and powers

Article 76 - Subject to the regulations of the Board of Executive Officers, each Committee envisaged in these Bylaws shall opine on matters pertaining to its respective area, after being submitting them to the Board of Executive Officers for discussion.

Paragraph 1 - The Board of Executive Officers shall determine the scope of the Committees, within which they shall have decision-making power.

Paragraph 2 - The Committees and Group Coordinators, if any, shall be nominated by the Board of Executive Officers and shall be represented at the monthly meetings of the Board of Executive Officers.

Chapter XIV

Fiscal Year, Financial Statements, Profits and their allocations

Section I

Fiscal Year

Article 77 - The Fiscal Year shall have duration of one year, ending on December 31.

Section II

Financial Statements

Article 78 - At the end of each half-year, in compliance with legal provisions, the Financial Statements shall be prepared, clearly explaining the Company´s financial standing, the changes in the period and the respective cash flow statements.

Article 79 - Before any profit sharing is made, accumulated losses and provision for income tax shall be deducted from the earnings, in compliance with Article 189 (one hundred eighty-nine) of Law 6404 of December 15, 1976.

Article 80 - In compliance with the previous Article, at the discretion of the Board of Executive Officers, the employees’ profit sharing shall be earmarked for distribution as performance award, up to 10% (ten percent) of the operating results of the half-year.

Section III

Profits and their allocations

Article 81 - Shareholders shall have the right to receive as mandatory dividend, every year, a percentage equivalent to 25% (twenty percent) of the year´s net income, adjusted according to the following norms:

I. The year´s net income shall be reduced or increased with the following amounts:

(a) 5% (five percent) for constitution of the Legal Reserve up to the limit established by the Lei das Sociedades Anônimas. The Company is exempted from constituting this Reserve in the year in which its balance, after adding the amount of Capital Reserve mentioned by Paragraph 1 of Article 182 (one hundred eighty-two) of Law 6404/76, exceeds 30% (thirty percent) of the capital; and

(b) the amount allocated to constituting the contingency reserve, as proposed by the Board of Executive Officers, and the reversal of this reserve formed in previous years;

II. From the amount allocated for dividend payment mentioned by this Article, subject to the deductions envisaged in item I above, the following shall be excluded: first, the amount necessary for payment of a fixed dividend of 6% (six percent) per annum to class A preferred shares, calculated by dividing the capital by the number of shares making it (Article 8);

III. Subject to the previous items, if there is any balance, dividend shall be paid to common shares and class B preferred shares, not greater than that allocated to class A preferred shares;

IV. After payment of the dividend mentioned in previous items, any balance in the amount allocated for dividend shall be distributed among all the shareholders. In such a hypothesis, common shares and preferred shares shall enjoy the same conditions, in compliance with item "ii" of Article 8 (eight) of these Bylaws.

Article 82 - The Company shall maintain an Investment Reserve for investments in information technology. To constitute such reserve, the Board of Directors may propose up to 25% (twenty-five percent) of the adjusted net income of each fiscal year, up to 70% (seventy percent) of the paid-up capital.

Article 83 - Without prejudice to Articles 78 to 82 of these Bylaws, the Board of Directors may determine preparation of the balance sheet and payment of dividend in periods shorter than 6 (six) months, provided the total of dividend paid in each half-year does not exceed the capital reserve amount.

Sole Paragraph - Moreover, the Board of Executive Officers, with the approval of the Board of Directors and the Fiscal Council, may at its discretion, and whenever the company´s interests recommend it, declare interim dividend for periods shorter than six months, on account of accumulated profits or profit reserves in the last half-yearly balance sheet, subject to other statutory and legal norms concerning payment of dividends.

Article 84 -The amount of interest, paid or credited, as remuneration on equity, under the terms of Article 9 (nine) Paragraph 7 of Law 9249, of 12/26/95 and pertinent legislation and regulations, may be imputed to the mandatory dividend, with that amount being added to the dividend amount distributed by the Company, for all legal purposes. .

Chapter XV

Sole Section

Company’s Control Preservation by the State of Rio Grande do Sul and Minority Shareholders Rights

Article 85 - The fundamental and basic rule of the Company is that it shall necessarily be controlled by the state of Rio Grande do Sul. Under Article 22 of the Rio Grande do Sul State Constitution, any amendment to this rule is the state population’s prerogative. Thus, only through a plebiscite can there be a transfer of shareholding control in the Company, subject to public interest. If such sale is approved following this procedure required by the State Constitution, either through a single operation or through successive operations, it should be based on a suspensive or resolutory condition that the party acquiring the control undertakes to place, within 90 (ninety) days, a public tender offer for acquiring the shares owned by other shareholders, guaranteeing them a price of at least 100% (one hundred percent) of the amount paid per share with voting rights in the controlling block, in order to assure them equal treatment on par with the seller.

Article 86 - The public tender offer referred to in the previous Article should also be held, subject to the constitutional norms and the plebiscite requirement mentioned in Article 85 above: (a) in cases of encumbered assignment of subscription rights of shares and other bonds or rights related to securities convertible into shares that may result in the disposal of the Company Control; and (b) in the case of indirect sale, that is sale of the control in the company by the Company´s controlling shareholder(s), in which case the selling controlling shareholder(s) shall be obliged to inform the São Paulo Stock Exchange (BOVESPA) the amount to be attributed to the Company in such sale and attach documentary evidence.

Article 87 - Those already holding the Company´s shares and, subject to the constitutional norms and the plebiscite requirement mentioned in Article 85 above, acquiring the shareholding control through a private instrument of share purchase agreement entered into with the controlling shareholder(s) involving any amount of shares, shall be bound to: (a) make the public offer referred to in Article 42 hereof; and (b) refund the shareholders from whom they purchased shares in the stock exchange in the (6) six-month period before date of transfer of the shares representing control in the Company, and shall pay them any difference in the price paid to such controlling shareholder(s) and also the amount paid in the stock exchange for shares of the Company in this same period, duly adjusted according to the Extended Consumer Price Index - IPCA ("IPCA") up to the actual payment.

Article 88 - In the public tender offer for the shares to be made by the controlling shareholder for cancellation of the Bank´s registration as an open capital Company, the minimum price to be offered should correspond to the economic value calculated in the valuation report.

Article 89 - If the shareholders at the Extraordinary General Meeting decide to discontinue the Level 1 Corporate Governance Practices, the controlling shareholder or group of shareholders (as defined in Article 116 of Law 6404/76) should make a public tender offer for acquisition of shares owned by other shareholders, for the economic value of the shares according to the valuation report: (i) within 90 (ninety) days, if the discontinuance of Level 1 Corporate Governance Practices is for the shares to be traded outside the Level 1 of Corporate Governance Practices, or (ii) within 120 (one hundred twenty) days from the date of the Annual General Meeting that approved the corporate restructuring in which the Bank´s shares resulting from such reorganization are not admitted for trading in Level 1.

Article 90 - The valuation report referred to in Articles 88 and 89 should be prepared by a specialist company with proven experience, which is independent of the Bank, its managers or controllers. The report should also satisfy the requirements of Paragraph 1 of Article 8 of Law 6404/76 and contain the responsibility envisaged in Paragraph 6 of the same Article of said Law.

Paragraph 1 - The choice of the specialist company responsible to determine the economic value of the Company is entrusted with the Annual General Meeting, based on the presentation of the Board of Directors, from a list provided in triplicate. The decision must be taken by the majority of the shareholders representing the outstanding shares, present at the Annual General Meeting to decide on the matter. Null votes, shares owned by the controlling shareholder, spouse, companion and dependents included in the annual income tax return, shares held in treasury and shares owned by the Company´s subsidiaries and associate companies, and other companies belonging to the same group by fact or by law shall not be included.

Paragraph 2 - The cost of preparing the valuation report should be fully borne by the controlling shareholder.

Article 91 - In compliance with the hypotheses of Article 85 and subsequent articles, the Company shall not carry out any transfer of shares to shareholder(s) acquiring control if such shareholder(s) do not sign the Statement of Consent to the Regulations of Differentiated Practices of Level 1 Corporate Governance and the Statement of Consent to the Regulations of the Market Arbitration Panel.

Sole Paragraph - Similarly, no Shareholders´ Agreement that provides for exercise of control can be registered at the Company´s head office without its signatories signing the Statements of Consent referred to in the first paragraph of this Article.

Chapter XVI

Sole Section

Arbitration

Article 92 - Disputes related to Regulations of Level 1 Corporate Governance Practices, these Bylaws, any shareholders´ agreements filed at the Company´s head office, provisions of Law 6404/76, norms of the National Monetary Council (Conselho Monetário Nacional - CMN), Central Bank of Brazil, the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários - CVM) and the BOVESPA regulations and other norms relating to the functioning of the capital markets in general, or arising from such norms, shall be resolved by means of arbitration held according to the Regulation of the Market Arbitration Panel instituted by the BOVESPA.

Chapter XVII

Sole Section

General Dispositions

Article 93 - The Bank, in compliance with its corporate objectives, business nature and operational characteristics, following the methods used by the private sector, shall:

a) adopt the principle of tenders for purchase of assets, works and services contracted;

b) observe the principles instituted by the controlling shareholder for granting subsidies and grants;

c) without prejudice to other norms governing the inspection of its activities as a financial institution, provide conditions essential for efficient internal control, the position of Controller and Auditor General of the controlling shareholder and external control, as laid down by the State Constitution of Rio Grande do Sul and pertinent legislation;

d) implement the code of ethics governing the relations with external clients and among the employees;

e) guarantee to its past and present managers and board members, in cases when there is no incompatibility of interests with those of the Company and in the manner defined by the Board of Directors and proposed by the Board of Executive Officers, their defense in legal and administrative proceedings against them for actions in the exercise of their position or function, subject to provisions of Law 8906 of 07/04/1994.

Sole Paragraph - The Company may, in the manner defined by the Board of Directors and in compliance with the Paragraph 1 of this article, hire insurance in favor of its managers and Fiscal Council members, Audit Committee members, Eligibility and Compensation Committee member and Risk Committee member, objecting to protect them of responsibilities for acts or facts due the exercise of their jobs and functions, covering all the exercise period of their respective terms or functions, according to the case.

Article 94 - Except for the funds needed to meet the objectives of the Fundação Banrisul de Seguridade Social (Banrisul Social Security Foundation), the amount of subsidies and grants to be distributed annually by the Board of Executive Officers shall be fixed by the Board of Directors, subject to tax restrictions and the criteria laid down by the State for concession of these

Sole Paragraph - Subject to the limits fixed by the Board of Directors, this Article does not cover small grants made individually by the Executive Officers, equal to or lower than 0.000,004 of the capital stock.

Article 95 - The Board of Executive Officers shall pass the resolutions establishing the procedures to be adopted in cases of tender bids and grant of subsidies and grant

Article 96 - The Board of Executive Officers shall send to the Controller and Auditor General of the state of Rio Grande do Sul the balance sheets and the trial balances of the Bank and provide them with all the information required for the internal and external control by the controlling shareholder.

Article 97 -The Company shall be dissolved and liquidated according to prevailing legislation

Article 98 - Recruitment of personnel for the Bank, in Brazil, shall be according to Brazilian Labor Laws (Consolidação das Leis do Trabalho) through a common entrance exam or entrance exams weighted for qualifications, depending on the nature of the position.

Article 99 - Managers will receive compensation which total annual amount will be determined by the Shareholders’ Meeting, with the Board of Directors responsible to regulate the use of the remuneration amount and its distribution among the members of the Board of Directors and Board of Executive Officers.

Paragraph 1- The Board of Executive Officers members of the company and its subsidiaries will be entitled to Profit Sharing, calculated in accordance with the criteria defined by the collective bargaining agreement of the banking industry.

Paragraph 2 - The Board of Executive Officers members the company and its subsidiaries will be entitled a 30-day vacation period each year, to be paid in accordance to the constitutional one-third additional pay.

Paragraph 3 - Full or proportional untaken holidays within every year or the end of their term of office will be paid in cash.

Article 100 - The Banco do Estado do Rio Grande do Sul S.A. shall, through at least one of the members of its Board of Executive Officers, have a presence on the Board of Directors of the companies in which it owns 50% (fifty percent) or more of the capital.

Sole Paragraph - The Bylaws of each of the companies referred to in this Article should envisage the participation of the Bank´s representatives on their Boards of Directors, subject to legal provisions.

Article 101 - The acquisition or subscription to the Bank´s shares implies in the approval of these Bylaws and acceptance of the responsibilities arising from them and the laws in force.

Article 102 - Cases omitted by these Bylaws shall be regulated by applicable legislation.

Chapter XVIII

Sole Section

Temporary Provisions

Article 103 - The rights of current holders of preferred shares shall be given to the holders of such shares on the date of the Extraordinary General Meeting held on March 28, 1988, without prejudice to their right to convert them into registered preferred shares anytime with no pecuniary liability.

Article 104 - Without prejudice of term period fixed in this Bylaws, and the limitations predicated in specific rules and/or present legislation, the Company’s Board of Directors is, since now, authorized to implement non-coincident terms for the members of: Audit Committee, Risk Committee and Eligibility and Compensation Committee in the following terms: exceptionally in the first election ensuing the Ordinary General Meeting and the Extraordinary General Meeting, from Abril 28, 2017, it could be elected 2 (two) members of all referred organs with a regular 2 (two) year term and 1 (one) member with a 3 (three) year term, except in the Risk Committee, who may be 2 (two) members with a 3 (three) year term in its first composition.

[1]Subject to the deadline of 60 (sixty) days for the opposition by unsecured creditors, according to the article 174 of Law 6404/74, counted from the publication of the minutes of the Extraordinary General Meeting held on April 10, 2018, and to the approval of the Central Bank of Brazil.

* Bylaws approved at the Annual General Meeting of April 27, 2018, awaiting approval of the Central Bank of Brazil.


Contact IR

Phone: +55 51 3215-3232
E-mail: ri@banrisul.com.br

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