| Article 62 | A Mainland commercial bank or Mainland-funded bank that meets the following requirements may apply to the Competent Authority for approval to establish a branch in Taiwan Area:
1. The bank is in compliance with the law, soundly managed and has not committed any major regulatory violation within five (5) years prior to application;
2. The bank is ranked, in terms of capital or assets, among the top two hundred banks in the world within one year prior to application;
3. The bank has established a representative office in Taiwan Area for at least two years and is free of any violation record. However if the economic cooperation agreement between Taiwan Area and Mainland Area provides otherwise, such agreement shall prevail;
4. The bank engages in international banking business with a sound financial structure and its financial ratios comply with the standards prescribed by the competent authority;
5. The appointed branch manager has sufficient experience in international finance and the management of international banking operations, and meets the qualification requirements set forth in the Regulations Governing Qualification Requirements for Responsible Persons of Banks in Taiwan Area;
6. The bank has established a branch and operated business in a member country of OECD for five years or longer; and
7. No other facts indicate that the sound business operations of the bank may be hindered. |
| Article 63 | A Mainland commercial bank or Mainland-funded bank intending to establish a branch in Taiwan Area shall submit the following documents to the Competent Authority for approval:
1. Application;
2. A feasibility study;
3. Particulars of the bank;
4. The bank’s ranking among the world’s leading banks by capital or assets for the year before application;
5. A self-assessment regarding the bank’s compliance with laws and regulations and the integrity of its business operations, as well as an explanation of any regulatory violations, frauds, or disciplinary actions imposed on the bank within the last five years;
6. The internal control and audit systems, operations management, and performance evaluation method for the branch to be established in Taiwan Area;
7. A document issued by the financial authority at the place of registration approving the establishment of a branch in Taiwan Area;
8. A document issued by the financial authority at the place of registration confirming the soundness of the bank’s business and financial conditions;
9. A letter of undertaking issued by the head office of the bank promising to provide necessary (contingent) liquidity and financial support to branches in Taiwan Area;
10. The business plan of the branch;
11. The resume and relevant evidentiary documents of the proposed manager for the branch in Taiwan Area;
12. The minutes of the board resolution approving the filing of an application to establish a branch in Taiwan Area;
13. A calculation worksheet for the bank’s ratio of equity capital to risk-weighted assets, non-performing loan ratio and loan loss coverage ratio for the latest fiscal half year certified by a practicing accountant at the place of registration;
14. A power of attorney issued by the responsible person of the bank authorizing a lawyer or certified public accountant to file the application;
15. The CPA-certified income statements and balance sheets of the bank for the last three years;
16. Documentation proving the due incorporation and existence of the bank as a legal entity and the banking license issued by the financial regulator at the place of registration;
17. The bank’s articles of incorporation;
18. A power of attorney of designating an agent for litigious and non-litigious matters in Taiwan Area;
19. A declaration of the agent for litigious and non-litigious matters in Taiwan Area; and
20. Such other information or documents as may be required by the Competent Authority.
The proposed branch manager mentioned in the preceding paragraph should have good moral character and professional leadership ability, is free of the situations set forth in Article 3 of the Regulations Governing Qualification Requirements, and complies with the provisions in Paragraph 1, Article 3-1 and Paragraph 1, Article 5 of the same Regulations.
Documents mentioned in Subparagraphs 7, 8 to 11, and 18 in Paragraph 1 shall be certified by a notary public or a notarization institution at the bank’s place of registration. In addition, documents produced in a third area must be authenticated by a Overseas mission; documents produced in Mainland Area must be authenticated or verified by the institution set up or designated, or by the private organization entrusted by the Executive Yuan.
All documents referred to in Paragraph 1 hereof must be attached with a traditional Chinese counterpart. |
| Article 64 | A Mainland commercial bank or Mainland-funded bank shall, within six months from the date the establishment of branch is approved, complete the following procedures:
1. Remittance of operating capital for the branch;
2. Submission of an Application for Approved Branch Business Items to the Competent Authority for approving business items of the branch;
3. Applying to the Ministry of Economic Affairs for permission to establish a branch company and registration of branch company in accordance with the Act and obtaining an approval letter therefor and a capital verification document; and
4. Closing the existing representative office.
One extension to the time period specified in the preceding paragraph may be granted upon application if there is an extraordinary event. If the bank fails to complete the aforementioned procedures before the specified deadline, the Competent Authority may annul the approval granted. |
| Article 65 | A Mainland commercial bank or Mainland-funded Bank shall, after completing the procedures set out in Paragraph 1 of the preceding article, apply for issuance of a bank license by submitting an Application for Business License and relevant documents to the Competent Authority and pay the license fees.
A Mainland commercial bank or Mainland-funded bank shall, before its branch in Taiwan Area commences business, submit a report on the date on which the branch will commence business, detailed address of the branch and the name of branch manager to the Competent Authority for recordation, and comply with the following provisions after the branch has commenced business:
1. If the branch has a material contingent or fraud incident, the bank shall handle and report it according to the provisions set forth by the Competent Authority;
2. When the branch reports to the financial authority at the place of registration according to the local financial regulations, the bank shall promptly report same to the Competent Authority for recordation;
3. The bank shall input the basic and operating information of the branch into an information reporting system designated by the Competent Authority, and update the information when changes occur;
4. The branch shall undertake internal audit in accordance with the Implementation Rules of Internal Audit and Internal Control System of Financial Holding Companies and Banking Industries. The bank shall submit the business audit report, independent auditor’s report, and financial examination report on its branch prepared by the financial authority at the place of registration to the Competent Authority for recordation;
5. Before changing the business address of the branch, the bank shall report to the Competent Authority for prior approval; and
6. Before replacing the branch manager, the bank shall first submit documents verifying that the new branch manager appointee meets the qualification requirements set forth in Paragraph 2 of Article 63 herein to the Competent Authority for approval. |
| Article 66 | The business items that the branch of a Mainland commercial bank or Mainland-funded bank in Taiwan Area (referred to as “branch of Mainland bank” hereunder) may apply for shall be limited to those a commercial bank may operate under the Banking Act and those approved by the Competent Authority, and must be recorded on the branch’s business license before such business items are operated.
The NTD deposit business of individuals a branch of Mainland bank may engage in shall be limited to NTD time deposit over NT$3,000,000.
Where the business items that a branch of Mainland bank applies for involve foreign exchange business, the approval of the Central Bank is also required. |
| Article 67 | A branch of Mainland bank shall allocate a minimum operating capital of NT$250,000,000.
The allocated operating capital mentioned in the preceding paragraph may not be remitted out without the approval of the Competent Authority. A Mainland commercial bank or Mainland-funded bank intending to increase the operating capital of its branch shall obtain the prior approval of the Competent Authority. |
| Article 68 | The net worth of a branch of Mainland bank shall not be less than two thirds (2/3) of the minimum operating capital required by the Competent Authority. If the net worth falls below such minimum level, the bank’s agent for litigious and non-litigious matters in Taiwan Area shall promptly report to the Competent Authority.
The Competent Authority may order a Mainland commercial bank or Mainland-funded bank having the situation described in the preceding paragraph to remit in sufficient funds to meet the required level of the operating capital of its branch in Taiwan within a prescribed period of time. If the bank fails to comply accordingly, the Competent Authority may order the branch of Mainland bank to suspend business and take other necessary measures pursuant to the Banking Act. |
| Article 69 | Branches of Mainland banks shall comply with the following financial management requirements:
1. Its current ratio (current assets to current liabilities) is not below 25%;
2. The combined total of allocated NTD operating capital and NTD reserve is not below 8% of NTD risk-weighted assets;
3. Thirty (30) percent of the allocated operating capital are kept in the form of assets designated by the Competent Authority; and
4. The net borrowing from NTD interbank call loan market is not more than two times of the allocated operating capital.
If deemed necessary, the Competent Authority may remove the financial management requirements set out in the preceding paragraph for branches of Mainland banks in part or in whole through an administrative order. |
| Article 70 | Matters not specified in these Regulations with respect to the administration of branches of Mainland banks shall be governed by the provisions in Banking Act governing the branches of foreign banks. |
| Article 71 | If deemed necessary, the Competent Authority may order a branch of Mainland bank to submit a report or information on the business or financial conditions of its head office. |