P.R. Laws tit. 7, § 767
The Bank shall always maintain a reserve which shall be known as “legal reserve”, and which shall not be less than twenty percent (20%) of its debentures payable on demand, with the exception of deposits of the Government of the Commonwealth of Puerto Rico, the municipal governments, public corporations and instrumentalities of the Commonwealth of Puerto Rico or of the Government of the United States, secured by cash collateral.
This reserve shall consist of any of the following securities or combination thereof:
(1) Legal tender of the United States.
(2) Checks against banks or trust companies located in any part of the Island of Puerto Rico, to be presented for collection during the day following that on which received.
(3) Cash deposited in other banks, provided such deposits are authorized by the Commissioner of Financial Institutions and are subject to immediate collection.
The Commissioner of Financial Institutions may, in his discretion, increase the mimimum legal reserve established in this section, up to no more than thirty percent (30%) of the aggregate amount of the Bank’s total debentures payable on demand, except for deposits of the Commonwealth, its municipalities, public corporations, instrumentalities of the Commonwealth or of the United States Government secured by cash collateral, whenever, in his judgment, circumstances so require it. But the order increasing the minimum legal reserve shall not be effective until thirty (30) days after it is issued.
If the Bank becomes a member of the Federal Reserve System, the Commissioner of Financial Institutions shall render ineffective the above provision on legal reserve as long as it continues to be a member of the said System, and, in such case, the reserve requirements of the Federal Reserve System shall be deemed sufficient.
Should the Bank be authorized to establish, and it does establish one or more branches in any state of the United States or in any foreign country where such branch or branches were subject to legislative reserve requirements applicable to the banking institutions established in said state, the Commissioner of Financial Institutions shall render ineffective the provisions herein on legal reserves with respect to such branch or branches established herein.
The legal reserve requirements established herein shall be computed on the basis of the average reserve maintained during one week, which computation shall be made on Monday of each week. The Bank shall be bound to submit to the Commissioner of Financial Institutions a weekly report certified by an official of the Bank duly authorized therefor, where the daily computation of the legal reserve maintained during one week is recorded.
The Commissioner of Financial Institutions is hereby authorized to impose upon and collect from the Bank an administrative fine of not less than twenty-five dollars ($25) nor more than one hundred dollars ($100) for each week it fails to maintain the minimum legal reserve prescribed or which may be prescribed under this section. If the Bank shall fail to pay the said administrative fine within the term of fifteen (15) days counting from the service of notice of its imposition, the Commissioner of Financial Institutions may bring a civil action to collect before the Court of First Instance, San Juan Part.
The Commissioner of Financial Institutions shall notify the Bank, whenever the amount of its legal reserve is less than that prescribed or which may be prescribed pursuant to this section, of its duty to complete such amount at once and to notify said officer as soon as completed. If the Bank should fail to complete such amount within a period of thirty (30) days, it may be declared in liquidation by the Commissioner of Financial Institutions, and shall be deemed by him a corporation under liquidation.
History —June 21, 1966, No. 88, p. 257, § 17; Sept. 25, 1992, No. 79, § 9.