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Summary: Provisions on Foreign Currency Credit extension conducted by Offshore Banking Units, Domestic Banking Units and Overseas Branches of Domestic Banks (The original Order Jin-Kuan-Yin-(5)-Zi-09585005590 dated March 8, 2006 of the Financial Supervisory Commission, Executive Yuan does not apply from this date onwards.)
Issuing Agency: Financial Supervisory Commission, Executive Yuan
Date of Issue: October 9, 2007
Ref. No: Order Jin-Kuan-Yin-(5)-Zi-09650003710
Content: The provisions on foreign currency credit extension conducted by an offshore banking unit (OBU), a domestic banking unit (DBU) and an overseas branch of a domestic bank are as follows:1. When an OBU engages foreign currency credit extension and such credit extension involves in taking New Taiwan Dollars collateral, it shall process the collection of the said collateral pursuant to Letter Tai-Yang-Wai-(11)-Zi-0960031438 dated July 11, 2007 of the Foreign Exchange Department, the Central Bank of the Republic of China (Taiwan). However, if the foresaid involvement concerns cross-straits finance, then the collection of the collateral shall be handled pursuant to the “Regulations Governing Approvals of Banks to Engage in Financial Activities Between the Taiwan Area and the Mainland Area.” 2. OBUs and overseas branches that engage in foreign currency credit extension may take as collateral the borrower’s certificates of foreign currency term deposit kept in an overseas branch or OBU, while the borrower (of the OBUs and overseas branches) holds the certificates; or in the case that the certificates of foreign currency term deposit are owned by another person, they are held by the borrower. They may also take as collateral the borrower’s certificates of foreign currency term deposit kept in a DBU and held by the borrower him-/her-/itself; or in the case that the certificates of foreign currency term deposit are owned by an affiliated enterprise, they are held by the borrower. However, the OBUs and overseas branches may not take as collateral a non-affiliated enterprise’s certificate of foreign currency term deposit that is kept in a DBU and held by the borrower. 3. Articles 369-1~369-3 and Article 369-9 of the Company Act apply to the scope of the term, “affiliate enterprise” mentioned above.4. When OBU and overseas branches of domestic banks issue usance letters of credit for their customers, the place of importation that is to be specified in the usance letters of credit may be the Mainland Area. 5. When the borrower (of a DBU that engages in foreign currency credit) holds a person’s New Taiwan Dollars term deposited or the same person’s certificate of foreign currency term deposit stored in the domestic affiliated bank or another bank, the DBU (that engages in foreign currency credit) may not take such certificate as collateral.6. Order Jin-Kuan-Yin-(5)-Zi-09585005590 dated March 8, 2006 of the Financial Supervisory Commission, Executive Yuan is ceased to apply from this date onwards.The Original: Posted on the website of the Commission.The Copy: Mainland Affairs Council, Central Bank of Republic of China (Taiwan); The Bankers Association of the Republic of China (kindly notify its members and foreign bank branches in Taiwan); Department of Legal Affairs of the Financial Supervisory Commission, Executive Yuan; Financial Examination Bureau of the Financial Supervisory Commission, Executive Yuan; Banking Bureau of the Commission (Divisions 1 to 6)References:Articles 369-1~369-3 and Article 369-9 of the Company Act (95.02.03)Article 4 of the Regulations Governing Approvals of Banks to Engage in Financial Activities Between the Taiwan Area and the Mainland Area (94.03.03)
Relevant Laws: Articles 369-1~369-3 and Article 369-9 of the Company Act (95/02/03) Article 4 of the Regulations Governing Approvals of Banks to Engage in Financial Activities Between the Taiwan Area and the Mainland Area (94/03/03)
Sources: Banking Bureau of the Financial Supervisory Commission, Executive Yuan.Executive Yuan Gazette, Vol. 013, No.172, p. 30779.Financial Business Information, Dec. 2007, p. 11. |