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Cash Card Supervisory Measures
(17 June 2004)
Letter Ref. Tai-Tsai-Rong-(IV)-0938011073
Subject:
To strengthen the quality of cash card issuance by financial institutions and the soundness of business operations thereof, a Ministry of Finance supervisory indicator and related supervisory measures for cash card non-performing loan ratios are hereby prescribed as set out in the "Statement." Please be advised and forward the information herein.
Statement:
1. Pursuant to Article 61-1 of the Banking Act and in response to the letter dated 30 March 2004 (ref. Cyuan-Shou-0741) of the Bankers Association of the Republic of China.
2. Cash card non-performing loans (NPL) are defined in accordance with the Ministry of Finance Letter ref. Tai-Cai-Rong-832292834 dated 16 February 1994 and Letter ref. Tai-Cai-Rong-86656564 dated 1 December 1997.
3. Where the cash card NPL ratio of a card issuing institution is high, the Ministry of Finance will adopt the following supervisory measures:
(1) Where the NPL ratio is 3 percent or above but lower than 5 percent, the card issuing institution will be notified in writing to exercise care to avoid deterioration of the quality of its cash card assets, and to formulate and submit an improvement plan.
(2) Where the NPL ratio is 5 percent or above but lower than 8 percent, an official reprimand will be given and the card issuing institution will be required to improve its asset quality within a 3 month time limit.
(3) Where the NPL ratio is 8 percent or above, its cash card issuance business (excluding re-issuance of lost cards) will be temporarily suspended.
4. These provisions will enter into force beginning from the reporting of the data for the end of August 2004 by the card issuing institutions. |