Data Source:Laws and Regulations Retrieving System of the Banking Bureau

Criteria for Transaction Limits between Credit Cooperatives and Non-Members
(Amended per Order Jin-Kuan-Yin-(3)-Zi-No. 09430018470 dated 2005/12/27)
(Please note that “extending loan or loan extension” is more commonly used than “providing loan or loan provision”)
Article 1
These Criteria are adopted pursuant to Paragraph 2, Article 15 of the Credit Cooperatives Act.
Article 2
Business transactions between credit cooperatives and non-members include the following:
1. Accepting deposits of all types.
2. Extending loans and overdrafts.
3. Providing domestic remittance services.
4. Providing collection and payment agency services.
5. Buying and selling foreign currency and traveler’s checks.
6. Providing custodial and agency services related to the above-listed items.
7. Other businesses approved by the central Competent Authority.
Article 3
The limits on the transactions between credit cooperatives and non-members are as follows:
1. The aggregate balance of deposits from non-members shall not exceed seven (7) times the net worth of a credit cooperative.　
2. The aggregate balance of credit extended to non-members by a credit cooperative shall not exceed the aggregate amount of deposits from non-members.
Article 4
The scope of business, standards, and limits on credit that a credit cooperative may extend to non-members are as follows:
1. Where a credit cooperative’s ratio of own capital to risk-weighted assets is 8 percent or higher at the end of the preceding year, it may extend housing loans collateralized by buildings located within its business area or the neighboring two counties or cities (or special municipality), but the aggregate loan amount may not exceed two (2) times its net worth.　　
2. Loans secured by certificates of deposit of the lending credit cooperative, short-term bills, government bonds, bank debentures or secured corporate bonds.　
3. Consumer loans of NT$1.5 million or less, provided that aggregate amount of the loans does not exceed the cooperative’s net worth. The term “consumer loan" means small loans for home repair, durable consumer goods (including automobiles), tuition payments, and other small personal loans.　
4. Extending loans to government agencies and state-owned enterprises.
Where a credit cooperative’s non-performing loan ratio for the preceding 12 months has been lower than 2 percent, it has duly allocated sufficient loan loss provision as required, and its ratio of loan loss provision to non-performing loans has uniformly been not lower than 40 percent, the provision in subparagraph 1 of the preceding paragraph regarding building location may be expanded to the neighboring three counties or cities (or special municipality).　
If after a credit cooperative extends housing loans to non-members in accordance with subparagraph 1 of paragraph 1 hereof, and any non-compliance with the conditions listed in that subparagraph subsequently occurs, the credit cooperative shall immediately suspend that type of lending business. If non-compliance with the ratio set out in the preceding paragraph occurs, the credit cooperative may continue that type of lending business only in the neighboring two counties or cities (or special municipality), provided that these restrictions do not apply where the loan approval process has already been completed but the funds have not been allocated. A credit cooperative may recommence that type of lending business only after it is in compliance with the listed conditions.
The provisions regarding limits on extending loans by a credit cooperative to a same person or same related parties shall apply to credit extensions by a credit cooperative to non-members under subparagraphs 1 to 3 of paragraph 1 hereof. However, extending loans secured by collateral in the form of certificates of deposit of the lending credit cooperative or government bonds may be excluded when calculating the aggregate amount of loans to a same person or same related parties.
In extensions of credit to state-owned enterprises, a credit cooperative may only be a participating bank in a syndicated loan; it may not be the lead bank.
The aggregate amount of loan by a credit cooperative to non-members in lending business under subparagraph 4 of paragraph 1 hereof is not included in calculation of the aggregate balance of credit extended to non-members under the limit provisions of the preceding article; provided, the aggregate balance of credit extended to government agencies does not exceed two (2) times the net worth of the credit cooperative after the final accounting for the preceding fiscal year, and the aggregate balance of credit extended to state-owned enterprises does not exceed the net worth of the credit cooperative after the final accounting for the preceding fiscal year.
Article 5
These Criteria shall enter into force from the date of promulgation.