| Article 70 |
（Definitions of commercial banks）
The term, "commercial bank" as used in this Act shall refer to a bank whose principal function is to accept checking deposits, demand deposits and time deposits and extend short-term and medium-term credits. |
| Article 71 |
（Business scope of commercial banks）
Businesses which may be conducted by a commercial bank are as follows:
1.To accept checking deposits;
2.To accept demand deposits;
3.To accept time deposits;
4.To issue bank debentures;
5.To extend short-term, medium-term and long-term loans;
6.To discount bills and notes;
7.To invest in government bonds, short-term notes, corporate bonds, bank debentures and corporate stocks;
8.To handle domestic and foreign remittances;
9.To accept commercial drafts;
10.To issue domestic and foreign and letters of credit;
11.To guarantee the issuance of corporate bonds;
12.To conduct domestic and foreign guarantees;
13.To act as collecting and paying agent;
14.To act as the agent to distribute government bonds, treasury notes, corporate bonds and corporate stocks;
15.To conduct warehousing, custody and agency businesses in relation to the businesses in the preceding fourteen subparagraphs; and
16.To conduct other relevant businesses authorized by the competent authority. |
| Article 72 |
（Limitations on total balance of medium-term loans）
The total amount of medium-term loans extended by a commercial bank shall not exceed the balance of its received time deposits. |
| Article 72- 1 |
（Issuance of bank debentures）
A commercial bank may issue bank debentures and may agree with the holders that such debentures may be repaid prior to other creditors of the bank; regulations governing their issuance and maximum issuance amounts shall be prescribed by the competent authority after consulting with the Central Bank of the Republic of China. |
| Article 72- 2 |
（Limitations on total balance of construction loans）
The total amount of loans extended for residential construction and business construction by a commercial bank shall not exceed thirty percent (30%) of the total balance of its received deposits and issued bank debentures at the time such loans are extended; provided, that the following shall not be subject to such limitation:
1. Housing savings and loans approved by the competent authority for the encouragement of savings to facilitate the purchase of self-use residence;
2. Housing loans using deposits redeposited from postal savings allocated by the Central Bank of the Republic of China;
3. Loans using medium-and long-term funds from the National Development Council to facilitate citizens’ purchase of residence;
4. Business construction loans using medium-term and long-term funds from the National Development Fund, Executive Yuan and the National Development Council;
5. Mandated loans for purposes of encouraging investment in the construction of public housing, public housing loans and loans for facilitating the purchase of self-use residence by government employees and teachers.
A maximum amount of the loans under the provisos to the preceding paragraph may, when necessary, be prescribed by the competent authority. |
| Article 73 |
（Securities Financing ）
A commercial bank may extend financing to securities firms or securities finance companies in connection to the issuance and sales and purchase of securities.
Administration rules governing the financing in the preceding paragraph shall be prescribed by the Central Bank of the Republic of China. |
| Article 74 |
（Restrictions on investee enterprises）
A commercial bank may apply to the competent authority to invest in financial-related businesses. The application shall be deemed approved if the competent authority does not object thereto within fifteen (15) days after the application is serviced to it; provided that the bank shall not proceed with the investment under application during the foregoing period.
A commercial bank which obtains the approval from the competent authority may invest in non-financial-related businesses to cooperate with the government's economic development plans; provided that it shall not be involved in the management of such businesses. The application shall be deemed approved if the competent authority does not object thereto within thirty (30) days after the application is serviced to it; provided that the bank shall not proceed with the investment under application during the foregoing period.
Investment made pursuant to the preceding two paragraphs shall comply with the following requirements:
1.The total investment amount shall not exceed forty percent (40%) of the bank's net worth at the time of investment, and the total amount invested in non-financial-related businesses shall not exceed ten percent (10%) of the bank's net worth at the time of investment.
2. Unless the investment is in cooperation with the government’s policy and is approved by the competent authority, a commercial bank shall not invest in more than one financial-related businesses engaging in the same business; and
3. Where a commercial bank invests in non-financial-related businesses, the investment in each business shall not exceed five percent (5%) of the total paid-in capital or the total issued shares of such business.
The term "financial-related business" as used in Paragraph 1 and Subparagraph 2 of the preceding paragraph shall refer to businesses of banks, bills, securities, futures, credit cards, financial leasing, insurance, and trust and other financial-related businesses determined by the competent authority.
Matters to be complied with by a bank which engages in multisectoral operations by investment shall be prescribed by the competent authority to facilitate the consolidated supervision and administration of the bank and invested businesses and prevent conflicts of interest between the bank and invested businesses to ensure the banks’ sound operations.
Where it becomes obvious that the operation of an invested business is likely to affect a bank's sound operations, the competent authority may order the bank to dispose of its shares in such invested business within a prescribed period of time.
Where, before the amendment dated November 1, 2000 becomes effective, the total amount invested in non-financial-related businesses exceeds the ratio prescribed in Paragraph 3, Subparagraph 3, a bank may, as approved by the competent authority, maintain the original investment amount before complying with the prescribed ratio. Where two or more banks merge and each bank has investment in the same business, the banks may maintain the original investment amount as approved by the competent authority at the time of applying for the merger. |
| Article 74- 1 |
（Restrictions on investments in securities）
A commercial bank may invest in securities; the types and limits shall be prescribed by the competent authority. |
| Article 75 |
（Restrictions on real estate investment）
Except for warehousing for business use, a commercial bank shall not invest in real estate for self-use in an amount in excess of the net worth of such commercial bank at the time of investment in such real estate. The amount of a commercial bank's investment in warehousing for business use shall not exceed five percent (5%) of the total amount of its deposits at the time of investment in such warehousing.
A commercial bank shall not invest in real estate not for self-use except for the following circumstances:
1. A substantial portion of the real estate of its business location is for self-use;
2. The real estate is pre-purchased for self-use in the near future; or
3. A substantial portion of rebuilt original real estate rebuilt in the same location is for self-use.
4. The real estate is provided for the use by a cultural, art or public interest institution or organization incorporated with the approval from the competent authority in charge of the particular enterprise and the use has obtained approval of the competent authority in consultation with the competent authority in charge of the particular enterprise.
The total amount of a commercial bank's investment in real estate not for self-use in accordance with the proviso of the preceding paragraph shall not exceed twenty percent (20%) of the bank's net worth. The total amount of the bank's investment in real estate not for self-use and for self-use shall not exceed the bank's net worth at the time of the investment in such real estate.
Where a commercial bank conducts real estate transactions with an entity in which the bank holds more than three percent (3%) of the paid-in capital, or with the responsible persons, staff or major shareholders of the bank, or with an interested party of the bank's responsible person as defined in Article 33-1, the transaction shall be at arm's length and obtain the consent of more than three-quarters of its directors present at a board meeting at which at least two-thirds of the directors are present.
The scopes of real estate for self-use prescribed in Paragraph 1, real estate not for self-use, real estate with a substantial portion for self-use, for self-use in the near future, or to be rebuilt in the same location prescribed in Paragraph 2 and the rules governing the approval procedure in Paragraph 2, Subparagraph 4 and other matters to be complied with in relation to a bank's investment, holding and disposal of real estate shall be prescribed by the competent authority. |
| Article 76 |
（Disposal of Acquired Collaterals through the Foreclosure of Mortgages or Pledges）
Except for those permitted by Articles 74 and 75 of this Act, real estate and stocks acquired by a commercial bank through the foreclosure of mortgages or pledges shall be disposed of within four (4) years from the date of acquisition, provided that the above shall not apply to cases approved by the competent authority. |