Exhibit
1.B.2
  (FREE
TRANSLATION FROM THE SPANISH)
  * * *
*
  BANCO
SANTANDER CHILE
 
 BY -
LAWS
  (Updated
Version as of May 24, 2007)
  TITLE
I
  NAME,
CORPORATE DOMICILE, DURATION AND PURPOSES
  ARTICLE
1. A stock corporation whose corporate name shall be “BANCO SANTANDER-CHILE”,
which can also operate under the corporate names “BANCO SANTANDER SANTIAGO”,
“SANTANDER SANTIAGO”, “BANCO SANTANDER” OR “SANTANDER” as it corporate name,
governed by these By - laws, the General Banking Act and all other statutes and
regulations currently in force or that may be issued hereafter regarding the
subject matter, is hereby organized.
  ARTICLE
2. The Company shall have its corporate domicile in the city of Santiago without
prejudice to the agencies or branches the Board of Directors may open, maintain
or close in any other places within the country or abroad, all is accordance
with the law and subject to the relevant approvals as may be
required.
  ARTICLE
3. The term of the Company shall be indefinite.
  ARTICLE
4. The Bank’s purposes are to execute and enter into those acts and contracts,
businesses and transactions permitted to commercial banking institution in
accordance with all the applicable laws and particularly the General Banking
Act, provided that it may expand or restrict its activities in compliance with
any present legal provisions or that may be issued hereafter, without amending
these By - laws.
  TITLE
II
  CAPITAL
STOCK AND SHARES
  ARTICLE
5. The capital stock of the Bank is the amount of Ch$675.907.917.086, divided
into 188,446,126,794 shares with no par value, of the same and unique series.
The capital stock has been subscribed, entered and paid integrally in the form
established in the Second Transitory Article of these By - laws.
 
 ARTICLE
6. The shares shall be in the registered form and shall represented by share
certificates whose form, issuance, delivery, cancellation, replacement,
exchange, transfer and transmission shall be subject to the applicable
provisions that, with regard to these matters, are contained in the Regulations
to the Companies Act.
  ARTICLE
7. The Bank does neither recognize nor admits fractions of shares. In the event
that one or more shares become joint property or the co. - property of several
persons, the joint proprietors or co - owners shall be required to appoint a
common representative to act on their behalf before the Company.
  ARTICLE
8. Upon surrender of evidence of the loss, theft or destruction of a share
certificate, or other similar occurrence, the person under whose name such
shares are registered may request that issuance of a new certificate, provided
that a notice informing the public that the relevant certificate is being
canceled must have been previously published for there days in a newspaper
   
   designated
by the Company. Such circumstance shall be recorded in the Stockholders Registry
and in the newly issued certificate. The Company shall issue the new certificate
only after a term of five days after the publication of the notice has
expired.
  ARTICLE
9. A Stockholders Registry shall be maintained which shall include the names of
the shareholders and a recording of the number of shares held by each one of
them The rights recognized by laws to the shareholders may only be exercised by
those shareholders whose names appear registered prior to the dates that, in
each case, may be established by the law.
  ARTICLE
10. The registration in the Stockholders Registry of any shares in respect of
which a usufruct has been established, shall be name under the name of both the
title owner and the usufructuary, with indication of the existence,
characteristics and period of the usufruct.
  ARTICLE
11. The shareholders shall have preemptive rights in respect of any options to
subscribe for any may capital increases, in proportion to the number of shares
held by each of them. Any issuance of paid - in shares that are distributed
among the shareholders to represent a capital increase shall be effected in the
same proportion.
  ARTICLE
12. The shares subscriber by a shareholder buy not timely paid by him within the
terms agreed for, shall be sold by the Bank through a stock exchange or, in its
stead, in the manner established by the Superintendency of Banks and Financial
Institutions.
  TITLE
III
  MANAGEMENT
  ARTICLE
13. The management of the Bank, other than the authority reserved pursuant to
the applicable laws and regulations and these By - laws to the General
Shareholders Meeting, shall be entrusted to the Board of Directors.
  ARTICLE
14. The Board of Directors is constituted by 11 regular members and 2 alternate
members, appointed by the relevant General Shareholders Meeting.
  ARTICLE
15. The directors may be either shareholders or non-shareholders of the
Company.
  ARTICLE
16. The directors shall remain in office for three years; may be reelected
indefinitely and shall be renewed in its entirety at the end of each period. If
for any reason, at the time scheduled for the General Shareholders Meeting where
the newly appointments of directors are to be made were not held, the duties of
those serving as such shall be extended until their replacements are designated
in which case the Board of Director shall convene, at the shortest time
possible, a Meeting in order to effect the appointments.
  ARTICLE
17. The directors shall be entitled to compensation for the performance of their
duties. The amount of their compensations shall be determined annually by the
General Shareholders Meeting. The aforesaid is to be understood without
prejudice to the payments that, in the form of wages, fees, travel accounts,
expense accounts, dues as representatives of the Board of Directors or any other
cash payments, payments in kind or royalties of any sort whatsoever, might have
been assigned to certain directory by the General Shareholders Meetings of the
Board of Directors, with the approval of the General Shareholders Meeting, for
the performance or specific duties or tasks other than their functions as
directors imposed upon them specifically by the General Shareholders Meeting of
the Board of Directors. These special compensations shall be authorized or
approved by the General Shareholders Meeting, and for that purpose, a detailed
and separate entry shall be made in the Annual Report, which shall expressly
indicate the complete name of each one of the directors receiving such compensations.
  ARTICLE
18. Without prejudice to any other incapacity or incompatibility established by
law, the following may not be elected to become a director: (a) Those persons
that have been condemned or are being tried for crimes which are punished with
penalties, either as main a accessory, of
   2
   temporary
or perpetual suspension or incapacity to hold public office; (b) Those that have
been declared bankrupt and have not been rehabilitated; (c) The members of both
the House of Representatives and the Senate; (d) The directors or employees of
any other financial institution; (e) The employees that are appointed by the
President of the Republic or the employees or officers of the State, Public
Services, Public Institutions, Semi - Public Institutions, Autonomous Entities,
State Controlled Companies and, generally, all Public Services created by a law,
as well as of enterprise, corporations or public or privates entities in which
the State or this enterprises, corporations or centralized or decentralized
institutions may have majority or made even capital contributions or, under the
same conditions, be represented or participate. However, the restriction
established under this subparagraph; (e) shall not apply to those who hold
positions in teaching activities; and (f) The Bank’s employees.
 
 ARTICLE
19. For purposes of the appointment of directors, each shareholder shall have
the right to one vote for purposes of appointing a single person, or distribute
such votes in such other form as he may deem convenient, and the persons
obtaining the largest number of votes in the same and single process shall be
awarded the appointments, until all the appointments to be made have been
effected. The election of the regular and alternate board members shall be
carried out separately. For purposes of the casting, of the vote, the Chairman
and the Secretary, together with any other persons that may have been previously
designated by the Meeting to sign the minutes thereof, shall issue a certificate
giving evidence of the votes that in loud voice are being issued by the
shareholders attending, following the order of the list of attendance being
taken.
  Each
shareholder shall be entitled, however, to cast his vote by means of a ballot
signed by him, stating whether he signs for his own account or as a
representative. Notwithstanding, in order to expedite the casting process, the
Chairman of the company or the Superintendent, as the case may be, shall be
entitled to order that the vote be taken alternatively or indistinctly in a loud
voice or by means of ballots. At the time of polling, the Chairman shall
instruct that the votes are read out loud, in order for those attending to count
for themselves the number of votes issued and to verify with the said annotation
and the ballots the actual outcome of the selection.
  The
Secretary shall make the addition of the votes and the Chairman shall proclaim
elected those who have obtained the largest majorities, until all the
appointments have been made. The Secretary shall place the documents evidencing
the outcome of the scrutiny, duly signed by the persons charged with the duty of
verifying the number of votes issued, together with the ballots delivered by the
shareholders who did not vote in a loud voice, in an envelope which shall be
closed and sealed with the corporate seal and shall remain deposited with the
Bank for a least two years.
  ARTICLE
20. Every appointment of directors, or any changes in the appointment of
directors, shall be transcribed into a public deed before a notary public,
published in a newspaper of Santiago and notified to the Superintendency of
Banks and Financial Institutions, by means of the filing of a copy of the
respective public deed. Likewise, the appointments of General Manager and Deputy
Manager shall be communicated and transcribed into a public deed.
  ARTICLE
21. The vacancies caused in case that a director ceases in the performance of
this duties, whether by reason of incompatibility, limitation, legal incapacity
or bankruptcy, impossibility, unauthorized, death, resignation or any other
legal cause, shall be filled as follows: (a) The vacancies of regular members by
the alternate members; and (b) The vacancies of an alternate position, caused by
the application of letter (a) above, or in the case that a regular position
could not be filled as provided for such letter (a) when both alternate members
became regular, shall be filled by the Board of Directors on its first meeting
after the vacancy, the board members appointed in that shall be in such position
until the next General Shareholders Meeting which shall make the definitive
appointment, such replacing director will remain on its position until the
expiration of the term of the director that caused the vacancy.
   3
 
 ARTICLE
22. The alternate board member may replace temporarily the regular board members
in case of their absence or temporal impossibility to attend, or in a definitive
manner in case of vacancy. The alternate board members shall be always entitled
to attend to the board meetings and to speak in them. They will be entitled to
vote in such meetings only when a regular members does not attend thereto and
such alternate member act as replacement.
  ARTICLE
23. During the first meeting following its appointment by the relevant General
Shareholders Meeting, the Board of Directors shall elect in a separate vote from
among its members, a Chairman, a 1st Vice Chairman and a 2nd Vice Chairman,
after ceasing such persons, for any reason, in their offices. In the event of a
tie, the appointment shall be decided by lottery.
  ARTICLE
24. The Board of Directors shall meet in ordinary sessions at least once a
month, held on the pre-set dates and time as determined by the same Board.
Extraordinary meetings shall be held whenever called by the Chairman, whether at
his own will or upon the request of three or more directors, subject in such
case to the prior qualification of the Chairman to the effect that holding the
meeting is justified, except if the request is made by the absolute majority of
the directors in office, in which case the meeting shall be held without such
prior qualification. The extraordinary meetings may only address those matters
specifically included in the relevant agenda, except that, if the meeting is
attended by all the directors in office, they may agree otherwise with the
unanimous vote of all of them. Extraordinary meetings shall be called by means
of a written instrument; signed by the Chairman or the Secretary or his
alternate, and delivered to each one of the directors at least three days prior
to the date set for the meeting.
  ARTICLE
25. The quorum for the Board of Directors’ Meeting shall be 6 of its members
with voting rights. The resolutions shall be adopted by the affirmative vote of
the absolute majority of the attending directors with voting rights. In the
event of a tie, the person acting as the Chairman of the meeting shall cast a
deciding vote. It is understood that certain directors, who in spite of not
being physically present, participate in the sessions by simultaneous and
permanent communication through any technological media that have been
authorized by the Superintendency of Banks and Financial
Institutions.
  ARTICLE
26. The directors having an interest vested on a negotiation, act, contract or
transaction that is not related to the bank business, either as principal or as
representative of other person, shall communicate such fact to the other
directors. The respective resolutions shall be approved by the Board, it shall
be in accordance to the prevailing fair market conditions and the fact must be
disclosed to the next General Shareholders Meeting.
  ARTICLE
27.The discussions
and resolutions of the Board of Directors shall be recorded in a special book of
minutes maintained by the Secretary. The relevant minutes shall be signed by the
directors attending the meeting and by the Secretary, or his alternate. If a
director considers that such minutes are inaccurate or incomplete, he shall be
entitled to record the respective objections, before to actually sign it. The
resolutions adopted may be carried out without being necessary to approve the
minutes at a subsequent meeting. In the event of death, refusal or incapacity
for any reason of any of the directors attending to sign the minutes, such
circumstance shall be recorded at the end of the minutes stating the reason for
the impediment.
  ARTICLE
28. The directors shall be personally liable for all the acts they may effect in
the performance of their duties. The director who may wish to disclaim his
responsibility with respect to any act or resolution of the Board of Directors,
shall cause to record his opposition in the minutes, of which shall the
following General Shareholders Meeting be informed by the Chairman.
  ARTICLE
29. The Board will represent the Bank in and out of courts and, for the
execution of the corporate purpose, a circumstance that will not be necessary to
prove before third parties, it will be empowered with all the authorities and
powers of administration that the law or the By-laws do not set as exclusive of
the General Shareholders’ Meeting, without being necessary to grant any special
power of attorney, even for those acts that the law requires to do so. This
provision is notwithstanding the judicial representation of the bank that is
part of the General Manager’s authorities. The Board may delegate part of its
authorities to the General Manager, to the
   4
  Managers,
Deputy Managers or Attorneys of the Bank, a Director, a Commission of Directors,
and for specifically determined purposes, in other persons.
 
 ARTICLE
30.  The Board of Directors will designate three Directors among its
members who will comprise a Committee of Directors which will be ruled by that
expressly foreseen in Article 50 bis of the Corporate Law(Ley sobre Sociedades
Anónimas).
  TITLE
IV
  THE
CHAIRMAN
  ARTICLE
31. The Chairman of the Board of Directors shall hold the same position at the
Bank and the General Shareholders Meeting. The Chairman shall have, in addition
to the obligations and authorities established by the relevant legal and
regulatory provisions, these By-laws or the Board of Directors, the following:
(a) to act as Chairman of the Board of Directors and General Shareholders
Meetings; (b) to seek for the strict enforcement of these By-laws and the Bank’s
internal regulations, as well as the resolutions of the Board of Directors and
the Shareholders Meetings; (c) to call the Board of Directors Meetings and the
General Shareholders Meetings in accordance with the provisions contained in
these By-laws; (d) to sign the Annual Reports and the resolutions and
communications that may be issued by the Board or the General Shareholders
Meetings. In the event of a temporary absence or incapacity of the Chairman, the
Chairman shall be replaced, for any legal purpose, by the 1st Vice Chairman and,
upon the absence of the 1st Vice Chairman, by the 2nd Vice Chairman, or at last
by the person who, from among its members, may be designated by the Board of
Directors, or the shareholders appointed by the Shareholders Meeting, in its
case. The replacement of the Chairman constitutes an internal proceeding that
shall not require with the compliance of any formality, not being necessary to
present evidence to third parties as to the need to effect it in order for the
acts performed by the person replacing the Chairman to be valid, and it will be
sufficient for its validity the fact that it was made.
 
 TITLE
V
  THE
GENERAL MANAGER
  ARTICLE
32. The Board of Directors shall appoint a General Manager who shall be
responsible for the immediate conduction of the Bank’s businesses and shall
represent the Bank in all its offices. The General Manager shall have the
judicial representation of the company, with the authorities vested upon him set
forth in the two paragraphs of Section 7 of the Code of Civil Procedure. His
position shall not be compatible with that of director of the Bank, which
impediment is without prejudice to the fact that, in a transitory manner and not
to exceed from ninety days, a director of the Bank may perform duties as General
Manager. The General Manager shall have the right to participate in the
discussions held at the meetings of the of the Board of Directors but shall not
have the right to vote in connection therewith, being responsible, however,
jointly with all the members of the Board o Directors, for any illegal or
damaging resolutions adopted that are harmful to the interests of the company,
unless a disclaim of his liability has been recorded in the minutes. The General
Manager shall have, in addition to the authorities and duties set forth in the
relevant legal and regulatory provisions, these By-laws and the internal
regulations, the powers delegated upon him by the Board of Directors.
Additionally, the General Manager shall act as Secretary at the meetings of the
Board of Directors or any General Shareholders Meeting, unless another person is
specially appointed to act in such capacity. In the event of a temporary absence
or incapacity, the General Manager shall be replaced by the Manager, and if
there is more than one, by the one appointed by the Board of Directors to that
effect.
  TITLE
VI
  THE
MANAGERS
  ARTICLE
33. The Board of Directors shall appoint one or more Managers, who shall be
responsible for the transactions and business of the Bank at the offices, branch
offices, divisions or
   5
   services
placed under their management. The Managers shall have, in addition to the
duties and authorities set forth in the relevant legal and regulatory
provisions, these By-laws and the internal regulations, those powers that are
conferred or delegated upon them by the Board of Directors. Should there be more
than one Manager, the one designated by the Board of Directors shall be the one
who replaces the General Manager in the event of absence or incapacity of the
latter.
 
 TITLE
VII
  MANAGEMENT
RESPONSIBILITY, PROHIBITIONS AND RESTRICTIONS
  ARTICLE
34. The directors, Managers and other employees of the Bank shall be personally
responsible for the non-compliance with the provisions contained in these
By-laws, the internal regulations, the General Banking Act or any other legal or
regulatory provision, arising from the performance of their duties as such. They
shall also be liable for the infringement of the provisions stated above which
are effected or tolerated with their knowledge.
  TITLE
VIII
  GENERAL
SHAREHOLDERS MEETINGS
  ARTICLE
35. General Shareholders Meetings may be ordinary or extraordinary, and shall be
held in the city of Santiago. The resolutions adopted in accordance with these
By-laws by the General Shareholders Meetings, duly called and validly
constituted, shall be binding upon all the shareholders.
  ARTICLE
36. General Ordinary Shareholders Meetings shall be held once a year, on the
dates the Board of Directors may establish, within the first quarter following
the date of the annual financial statements. General Extraordinary Shareholders
Meetings may be held whenever required by the needs of the company. They shall
be called by the Board of Directors or the Chairman, whether at its own
initiative or following the request of shareholders representing at least ten
per cent of the outstanding shares with voting rights. In the event that, in
this latter case, the Board of Directors or the Chairman decline to call the
meeting, such call may be requested to be made by the Superintendency of Banks
and Financial Institutions.
  ARTICLE
37. Notice of the Shareholders Meetings shall be given by means of an emphasized
notice published on at least three different dates in such newspaper of Santiago
as the General Ordinary Shareholders Meeting may have determined or, if no such
determination has been made or if the designated newspaper in no longer being
published, in the Official Gazette, and on the dates, terms and conditions set
forth in the Companies Act’s regulations. The notice calling a General
Extraordinary Shareholders Meeting shall include the agenda for the Meeting. In
additions, such notice shall be delivered by means of a letter sent to the
shareholders at least fifteen days prior to the date set for the Meeting,
provided that such notice must contain a reference as to the subjects to be
discussed at the Meeting. Without prejudice to the liabilities established by
law, failure to deliver such letters shall not render the call
void.
  At the date which is no later than the
date the first notice of the call is published, a copy of the Annual Report and
the Financial Statements of the company, including the auditor’s report in their respective notes, must
be delivered to each shareholder. Notwithstanding the above, and with the prior
consent of the Superintendency of Banks and Financial Institutions, such
documents may be sent only to those shareholders holding a number of shares
higher than the minimum set forth by the Board of Directors with the approval of
the Superintendency. During the fifteen days preceding the General Ordinary
Shareholders Meeting, the Annual Report and the financial statements which must
be submitted by the Board of Directors, as well as the report of the auditors,
shall be made available to the shareholders. For such purpose the Bank shall
maintain at its main office, printed or typewritten copies of such documents.
The Annual Report presented by the Board of Directors tot he General Ordinary
Shareholders Meeting shall contain an explanatory and grounded account with
regard to the transactions effected during the fiscal year, to which article
   6
   17 of these By-laws refer, shall be
disclosed in a separate entry of the statement of profits and losses of the
financial statements.
  ARTICLE
38. General Shareholders Meetings shall be held, in the event of first call,
with a quorum of shareholders representing, either as principal or by proxy, the
absolute majority of the outstanding shares with voting rights. Should the
quorum indicated not be present, a second call shall be made through the press,
in the manner provided for in article 40 of these By-laws, with the indication
that a second call is being made and convening the Meeting to be held within the
forty-five days following the date set for the Meeting which was not held due to
the lack of a quorum. In the event of second call, the Meeting shall have a
quorum with the number of shares with voting rights issued, which are either
present or represented.
  ARTICLE
39. The resolutions of the General Shareholders Meeting shall be adopted, unless
otherwise specified, by the absolute majority of the shares present or
represented which are legally vested with voting rights. The affirmative vote of
two thirds of the shares issued which are legally provided with voting rights
shall be required for the approval of the General Extraordinary Shareholders
Meeting’s resolutions regarding the following matters: (a) the reorganization,
spin-off or merger of the company; (b) the dissolution of the company; (c) the
change of its corporate domicile; (d) the reduction of its capital stock, with
the prior approval of the Superintendency of Banks and Financial Institutions;
(e) the amendment of the authorities of the General Shareholders Meeting or the
restriction of the authority of the Board of Directors; (f) the transfer of 50%
or more of the company’s assets, whether it includes its liabilities or not, or
likewise the formulation or modification of any business plan that contemplates
the transfer of assets of an amount exceeding the aforementioned percentage; and
(g) the manner of distribution of profits established in these
By-laws.
  ARTICLE
40. It shall correspond to the General Ordinary Shareholders Meeting: (a) review
and approve or reject the Annual Report and financial statements submitted by
the Board of Directors; (b) appoint every year a firm of external auditors in
accordance with the relevant legal provisions, for the purpose of informing the
financial statements and, generally, compliance with the laws; (c) appoint the
members of the Board of Directors when required in accordance with these By-laws
(d) resolve upon the distribution of annual profits or net benefits, at the
proposal of the Board of Directors, and decide, at the end of each fiscal year,
the payment of dividends to the shareholders, in accordance with the provision
of article 45 of these By-laws; and (e) generally, to consider any other matter
relating to the company and which is not expressly reserved for a General
Extraordinary Shareholders meeting. The revocation of all the members of the
Board of Directors appointed by the shareholders and the appointment of their
successors may be decided either for a General Ordinary Shareholders Meeting or
a General Extraordinary Shareholders Meeting.
  ARTICLE
41. It shall correspond tot he General Extraordinary Shareholders meetings to
resolve upon: (a) the amendment of the By-laws; (b) the issuance of convertible
bonds or debentures; (c) the passing of resolutions pertaining to the General
Extraordinary Shareholders meetings set forth under article 38 of these By-laws;
and (d) any other matters expressly reserved to the General Extraordinary
Shareholders Meetings in accordance with the law or these By-laws. The matters
referred to in paragraphs (a) and (b) above, the dissolution, reorganization,
merger or spin-off of the corporation and the transfer of its assets and
liabilities, or of all its assets, may only be approved at a General
Extraordinary Shareholders Meeting held before a notary public.
  ARTICLE
42. General Extraordinary Shareholders Meetings may only resolve upon the
matters referred to in the relevant notice of the Meeting. However, if the
Meeting so decides, any other idea may be proposed for its discussion at the
next General Ordinary or Extraordinary Shareholders Meeting.
  ARTICLE
43. The shareholders may represent at the Shareholders Meetings by other
shareholders, by means of a proxy addressed to the company. Likewise, the
shareholders may be represented by persons who are not
shareholders.
   7
  ARTICLE
44. The discussions and resolutions of General Shareholders Meeting shall be
recorded in a special book of minutes maintained by the Secretary. The relevant
minutes shall be signed by the Chairman or his alternate, the Secretary and any
three shareholders appointed by the General Shareholders Meeting or, if there
are less than three attendees, then by all such attendees. In the event of
death, denial or incapacity to sign the minutes of any of the persons who are
supposed to sign it, a note shall be made at the end of same, with an indication
of the respective circumstance of the impediment. The minutes shall contain a
summary of the discussions held during the Meeting and shall necessarily include
the following information: name of the attending shareholders and number of
shares held or represented by each one of them; a brief description of any
objections made; enumeration of the proposals submitted for discussion and the
outcome of the voting, and the list of the shareholders that voted, either in
favor or against such proposals, should any one had asked an individual vote.
The omission form the minutes of an event related to the company’s interests
which occurred during the General Shareholders meeting, shall be subject to the
unanimous approval of the shareholders attending.
  The
attendees at a General Shareholders Meeting shall sign an attendance list which
shall indicate the number of shares held by each such attendee or, as the case
may be, the name of the shareholders and the number of shares represented by
them.
 
 TITLE
IX
  ANNUAL
REPORT, FINANCIAL STATEMENTS AND DISTRIBUTION OF PROFITS
  ARTICLE
45. A general Balance Sheet shall be prepared as of December 31 of each year,
such Balance Sheet, together with the respective Annual Report, shall be
submitted to the consideration of the General Ordinary Shareholders Meeting. The
Balance Sheet and the Earnings Statement shall be published in a newspaper of
Santiago prior to the Shareholders Meeting.
  ARTICLE
46. The profits reflected in the financial statements shall be allocated to the
compensation of losses of previous fiscal year. The balance shall be allocated,
as resolved by the General Shareholders Meeting, upon the recommendation of the
Board of Directors, to the following purposes: (a) to increase the capital
stock, to create a legal reserve fund, to create a fund for future
capitalization or dividend distributions, or to create any other special reserve
funds. These allocations shall be in such amounts as the General Shareholders
Meeting may deem convenient, subject to the restrictions and obligations set
forth in the law: (b) to distribute dividends to the shareholders, in proportion
to their stock holding. The General Shareholders Meeting, by the affirmative
vote of at least two-thirds of the outstanding voting shares, may resolve that
the obligation to distribute dividends set forth in the law, shall not be
applicable during a given fiscal year.
  TITLE
X
  DISSOLUTION
AND LIQUIDATION
   ARTICLE
47. The Bank may dissolve and liquidate provided that such decision is approved
in a General Extraordinary Shareholders Meeting by at least 2/3 of the
outstanding shares emitted with voting rights and the approval of the
Superintendency of Banks and Financial Institutions.
 
 ARTICLE
48. Once the voluntary dissolution of the Bank referred to in the previous
section is agreed, the Shareholders Meeting that approves it will appoint a
commission of 3 members to carry out its liquidation. The liquidating commission
will act with the powers and authorities that these By-laws confer to the Board;
it will keep the shareholders informed of the development of the liquidation, it
will call for a General Shareholders Meeting on the date set for such purposes,
being entitled to call for a General Extraordinary Shareholders Meeting. In any
other aspect it will be subject to the rules set by the Code of Commerce, the
Companies Act that may be applicable and the Regulations to the Companies
Act.
   8
  ARTICLE
49. The General Shareholders Meeting that appoints the liquidating commission
referred in the previous number will also set for its remuneration.
  TITLE
XI
  ARBITRATION
  ARTICLE
50. Any difficulty arising between the company and any of the shareholders or
directors, or between such persons, as result of the application of this
company’s agreement and these By-laws, or with regard to the existence,
non-existence, validity, nullity, interpretation, compliance o failure to
comply, dissolution, liquidation or any other reason, shall be submitted to the
resolution of two arbitrators (who shall not be bound for either the rules of
substantive or procedural law), whose resolutions shall be final, and shall be
appointed one by each party.
  Should
the arbitrators fail to reach an agreement, the parties shall appoint a third
arbitrator to resolve upon the disagreement. Should there not be an agreement to
appoint the third arbitrator, the appointment shall be made by the two
arbitrators already designated. If any of the parties fails to appoint the
arbitrator or, if having they been appointed, there is no agreement as to the
outcome, and neither the parties nor the arbitrators appoint the third
arbitrator to decide the impasse, the appointment of the respective arbitrator,
or of the third arbitrator, as the case may be, shall be made by the ordinary
courts, being in this case the appointment necessarily of a person who is
performing or has performed as an attorney at the Supreme Court.
 
 
 PROVISIONAL
ARTICLE 1.  In the Extraordinary Shareholders’ Meeting of Banco
Santiago held July 18, 2002 the merger by incorporation of Banco
Santander-Chile, as absorbed company, with Banco Santiago, as absorbing company,
was agreed upon and approved.  Said meeting approved the merger and
caused it to come into effect on January 1, 2002, creating the understanding
that Banco Santiago, today Banco Santander-Chile by virtue of the modification
of the name, is the legal successor to Banco Santander-Chile for all
effects.  The totality of shares and equity of Banco Santander-Chile
that dissolves as a result of the merger is incorporated into Banco Santiago,
today named Banco Santander-Chile.  Therefore, by virtue of said
merger by incorporation, once this has been completed, Banco Santander-Chile
that has been absorbed by the merger will become dissolved.
 
 PROVISIONAL
ARTICLE 2.  The capital stock of the bank is the sum of
$675,907,917,086 divided in 188,446,126,794 shares with no par value, of the
same and unique series, that is entered and paid in the following
manner:
 a)
              With
      the sum of $ 402,856,885,138 divided in 98,934,216,567 shares with no par
      value, of the same and unique series, which corresponds to the subscribed
      and paid capital of Banco Santiago, today Banco Santander-Chile, as of
      December 31, 2001, including the revalorization of its equity basis as of
      that date; and
 
 b)
              With
      the sum of $ 273,051,031,948 which will be entered and paid through the
      issue of 89,511,910,227 shares with no par value, of the same and unique
      series, with the contribution of equity of Banco Santander-Chile to be
      paid by the shareholders of Banco Santander-Chile to Banco Santiago, today
      named Banco Santander-Chile, with the purpose of the merger of the two
      banking institutions.  Once the merger has been approved by the
      Superintendency of Banks and Financial Institutions, its legalization
      executed and the other certificates and contracts that Banco Santiago,
      today Banco Santander-Chile, determines are completed, Banco Santiago will
      acquire all assets, liabilities, capital stock and reserve accounts of
      Banco Santander-Chile, while will dissolve by virtue of the
      merger.
 
 The
      merger will be executed taking as a base the precedents that were approved
      by the Extraordinary Shareholders Meeting of the Bank that approved the
      merger previously cited, precedents that are the following:  the
      expert reports regarding the net assets of
   9
  both
      banking institutions, issued by the qualified experts Mr. Alfredo Rossi
      Fernández and Mr. Juan Roncagliolo Grunert, on May 31, 2002, with respect
      to each of the banks; report issued by JP Morgan Securities Inc. on May
      23, 2002, regarding the value of Banco Santiago and the exchange relation
      of its shares regarding those of Banco Santander-Chile and the audited
      financial statements and balance sheets of both banks as of December 31,
      2001, with their respective external auditor reports of both banking
      companies.  From said expert reports it is deduced that the
      equity of Banco Santiago as of December 31, 2001 was
      $538,988,981,542.  In turn, the equity of Banco Santander-Chile
      was $453,869,087,253.  For the effects of calculating the
      exchange shares of the equity with which the merged company retains 52.5%
      of the total shares for the current shareholders of Banco Santiago and
      47.5% for the current shareholders of Banco Santander-Chile, which
      therefore, the exchange proportion in the merger is 3.55366329 shares of
      Banco Santiago merged, today named Banco Santander-Chile, for each share
      of Banco Santander-Chile that is dissolved by virtue of the
      merger.  As a consequence, the merged Banco Santiago, today
      named Banco Santander-Chile, must issue 89,511,910,227 shares to effect,
      materialize and perfect the exchange and
merger.
 
 On
      the other side, once the merger of Banco Santiago, today Banco
      Santander-Chile, is materialized, it will enter into the financial
      accounting all assets and liabilities received by the absorbed company, at
      the book value that these assets and liabilities have as of December 31,
      2001, notwithstanding the maintenance of its accounting registers, in
      separate form, the tributary value that the goods in Banco Santander-Chile
      which will dissolve by virtue of the
merger.
 
 The
      shareholders of Banco Santander-Chile which dissolves by virtue of the
      merger that will be on the date that the Board of Directors of the merged
      bank agree to execute will have right to these shares.  The
      shares of Banco Santiago, today Banco Santiago-Chile, that may remain
      because of the fraction calculus of the previously-mentioned
      proportionality, will be placed freely by the Board of Directors of the
      merged Bank in a stock market of the nation, and whatever is obtained from
      the transfer will be distributed, in cash, among the shareholders with
      rights to the shares that generate the remainder, in the proportion that
      corresponds.  The merger to which the first provisional article
      refers will take effect once it has been perfectly legalized, from January
      1, 2002.
 
 
 
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