THE CUBA REVIEW 17 



that of another bank and would lead to confusion, etc. There shall be no appeal 

 against the decision of the Commission. 



120. Once the Commission has approved the petition for the establishment of 

 a bank, the petitioner shall present at the corresponding office of the Fiscal Zone, the 

 articles of incorporation referred to in article 116, if it be a private bank or a 

 company or corporation, for the purpose of establishing and paying to the Treasury 

 the proper incorporation tax and that the bank has been registered at the Mercantile 

 Registry, and shall annex as evidence thereof, a certified copy of the notarial affidavit 

 or articles of incorporation bearing annotations as to the payment of the tax and of 

 the registration. In view of the above, the Commission shall tender its authorization 

 so that the bank may commence its operation at once, provided the capital of the 

 bank has been already subscribed up to 50 per cent., or has been collected from those 

 who promised to subscribe it and is at the disposal of the bank, and the bank shall 

 be obliged to make up the remaining 50 per cent, of the capital within two years 

 following the date on which it commences its operations. 



122. All banks that do business in the territory of the republic receiving deposits, 

 whether they be domestic banks or branches of foreign banks, shall be obliged to 

 become part of the banking system, by subscribing stock of the reserve bank in the 

 percentage of its deposits fixed by this Law, and also by placing in the possession 

 of said bank the legal reserves of 3 per cent, in the case of deposits in savings accounts 

 and 7 per cent, in the case of deposits on accounts current. Said banks which are 

 in existence at the time of the approval of this Law shall present to the National 

 Banking Commission, within the following 60 days, a petition for their incorporation 

 into the system, presenting at that time a well detailed statement of their operations; 

 and the Commission after proper verification of said statement, shall authorize the 

 operation of the bank under the protection of this system. In a contrary case, that 

 is, when the Commission has verified that the condition of the bank is not satisfactory, 

 either because 50 per cent, of its capital has not been subscribed or because it has 

 not on hand the reserve fund fixed by this Law, or for any other reason, the Commission 

 shall order that said bank, within 60 days, shall adjust itself to the terms of the Law, 

 advising it that it shall be liquidated if it fails to do so. 



123. Savings societies or savings banks in existence at the time of the promul- 

 gation of this Law, shall present the same petition mentioned in the foregoing section, 

 and the National Banking Commission shall authorize that they continue their operations, 

 provided it has found the same in proper order, holding them as much as possible 

 to the present Law and to the provisions of a transitory character which shall be 

 especially prepared by the Commission for the regulation of savings societies and 

 savings banks in existence at the time of the promulgation of the present Law. 



124. Banks that do business in the republic may establish branches in the territory 

 of the same or abroad, with the authorization of the National Banking Commission 

 and in accordance with the conditions which it shall establish for that purpose. 



125. Banks are expressly prohibited from making loans to their directors, officials 

 or employees, or to enterprises or business with which they are connected. The viola- 

 tion of this provision, in addition to the criminal responsibilities that may be proper, 

 will be punished with a fine of $5,000, which shall be paid by the members of the 

 Board of Directors who with knowledge thereof approved the loan, without prejudice 

 to the solidary civil responsibility in which they will incur together with the debtor. 



126. The increase or the reduction of the corporate capital shall be agreed to at 

 a general meeting of stockholders by a two-thirds vote, in the case of corporations, or 

 by the resolution of the majority of the partners or by the petition of the owner 

 in the case of banking societies or private bankers; and said resolution must be approved 

 by the National Banking Commission. 



127. In the event that the capital of a bank be reduced beyond the legal limit, 

 the bank should so report to the National Banking Commission under a penalty of 

 $5,000 fine if it fails to do so. The Commission shall order that in the mean time 



