Laws and Regulations Database of the Central Bank of the Republic of China(Taiwan)

Chapter III　　Business

Article 12

　Unless otherwise provided by law or regulations, the Bank's operations shall 
be circumscribed to business with the following organizations:

　1. Government agencies.

　2. Banks and other financial institutions.

　3. International and foreign financial institutions.

Article 13

　The currency of the Republic of China (Taiwan) shall be issued by the Bank.

　The currency issued by the Bank shall be the national currency, and shall be
legal tender for all payments within the territory of the Republic of China
(Taiwan).

　The Bank shall establish plants under its management to carry out the
printing and minting of the currency.

Article 14
　The Bank may, whenever necessary, delegate other government-owned banks to
issue currency in designated regions on its behalf, to be regarded as
national currency. The assets and liabilities pertaining to the issuance of
such currency shall be for the account of the Bank.

Article 15

　The basic monetary unit of the national currency is Yuan and the
subsidiary currencies are Chiou and Fen. Ten Fens equal to one Chiou
and ten Chious equal to one Yuan.

　The denomination, composition, form, and pattern of the notes and coins
issued by the Bank shall be proposed by the Bank, for approval by the
Executive Yuan.

　The Bank shall make public the specifications of notes and coins prior to
issuance.

Article 16

　 Against currency issued by the Bank and its delegated banks, reserves in
full equivalent value shall be maintained in gold, silver, foreign
exchange, and eligible bills and securities.

　The issuance of coins shall be exempt from reserves.

Article 17
　The amount and reserve status of currency issued by the Bank and its
delegated banks shall be made public in regular intervals.

Article 18

　The Bank shall exchange stained or damaged notes and coins deemed to
be unfit for circulation in accordance with certain standards, and destroy
them according to law.

　The Bank may redeem currency issued. Currency redeemed shall no
longer be legal tender. However, the redemption period shall not be less
than one year, during which time holders may exchange redeemed
currency with the Bank.

(Maximum Amount of National Currency Carried into or out of the Territory 
of the ROC)
Article 18-1

　The maximum amount of national currency that may be carried or mailed
into or out of the territory of the Republic of China (Taiwan) shall be 
prescribed by the Bank.

　Currency in excess of the aforesaid maximum cannot be transported 
into or out of the territory.

Article 18-2
　When financial institutions or other enterprises which are authorized to 
engage in foreign exchange business receive counterfeit or altered national 
currency or foreign currency, they shall retain, void and destroy those 
currencies, save that suspicion of criminal involvement shall be reported to the 
judicial authority. Regulations on handling counterfeit or altered currency 
shall be prescribed by the Bank.

Article 18-3

　The Bank may issue gold and silver coins and commemorative notes and
coins. Regulations governing the issuance of gold and silver coins and
commemorative notes and coins shall be prescribed by the Bank.

　The sale or resale price of aforesaid notes and coins may be higher than
their denomination.

Article 19

　The Bank may provide the following accommodations to banks:

　1. Rediscounts of eligible bills, with maturity not exceeding 90 days
　　　for industrial and commercial bills, and 180 days for agricultural
　　　bills.

　2. Temporary accommodations not exceeding 10 days.

　3. Refinancing of secured loans not exceeding 360 days.

　The Bank may impose limits on rediscounts or other accommodations to
banks.

Article 20
　The Bank, in order to assist economic development, may establish
various funds, using savings deposits re-deposited by financial
institutions and other special funds to refinance medium and long-term
loans disbursed by banks.

(Publication of the Discount Rate and the Rates on other Accommodations)
Article 21
　The discount rate and the rates on other accommodations shall be determined by 
the Bank in the light of prevailing financial and economic conditions, and made 
public. However, a branch office of the Bank may establish its own discount rate 
and the rates on other accommodations according to special local financial 
conditions, with prior approval by the Head Office, and make them public.

Article 22
　The Bank may, at its discretion and in the light of financial and economic
conditions, prescribe an upper limit for the interest rates of bank deposits,
and approve the range of interest rates on bank loans as proposed by the
Bankers Association.

Article 23

　The Bank shall receive and keep reserves against deposits and other 
liabilities of financial institutions which are regulated by the Banking 
Act, and may, at its discretion, adjust various deposit and other 
liability reserve ratios under the following maximum limits in accordance 
with the regulation governing adjustment and audit thereof, which shall 
be prescribed by the Bank:

　1. Checking deposits: 25%

　2. Demand deposits: 25%

　3. Savings deposits: 15%

　4. Time deposits: 15%

　5. Other liabilities: 25%

　The scope of aforesaid other liabilities shall be prescribed by the Bank.

　The Bank may, whenever necessary and from a specific date, impose on
the increment of the checking deposits, demand deposits and other
liabilities, a marginal reserve ratio which shall not be bound by the
maximum limits on paragraph 1 of this Article.

　The Bank may charge the financial institutions having insufficient reserves, 
on the portion of the shortfall, a penalty interest rate not higher than two 
times of that prescribed in Article 21 on unsecured temporary advances as 
stated in subparagraph 2, paragraph 1 of Article 19.

Article 24
　The Bank shall, in conformity with law, receive and keep reserves for
indemnity deposited by investment and trust companies.

Article 25
　The Bank, after consulting with the Financial Supervisory Commission, 
may at its discretion, prescribe for banks a minimum ratio of their liquid 
assets to various liabilities.

Article 26
　The Bank may, in the light of financial conditions, purchase and sell in
the open market the bonds issued or guaranteed by the government, financial
bonds issued by banks and bills accepted or guaranteed by banks.

Article 27
　The Bank may, for the purpose of regulating monetary conditions, issue
certificates of deposits, savings bonds and short-term bonds, and may
purchase and sell them in the open market.

Article 28
　The Bank may, whenever necessary, prescribe maximum loanable ratios
selectively on the items used as collateral or mortgage of secured loans
extended by banks.

Article 29
　The Bank may, whenever necessary, prescribe and regulate the amount of
down-payment and the term of credit extended by banks for the purchase
or construction of buildings and the purchase of durable consumer goods.

(Administration of Accommodations Extended by Banks to Securities Dealers 
or Securities Finance Companies)
Article 30
　The Bank shall prescribe and regulate the accommodations extended by 
banks to securities dealers or securities finance companies.

Article 31
　The Bank may, whenever it deems that the monetary and credit 
conditions so warrant, prescribe a limit on various kinds of credit 
extended by all, or any category of, financial institutions.

Article 32
　The Bank shall establish clearing houses for negotiable instruments exchange 
and clearance of accounts among banks at the sites of Head Office or branch 
offices. The Bank may delegate government-owned banks to carry out this function 
in places where the Bank has no branch office. Regulations governing the 
business of negotiable instruments exchange and clearance of accounts among 
banks shall be prescribed by the Bank.

Article 33
　The Bank shall hold international reserves, and undertake the overall 
management of foreign exchange.

Article 34
　The Bank may, in the light of the balance of payments situation, take
measures to adjust the demand for and supply of foreign exchange with a
view to maintaining an orderly foreign exchange market.

Article 35

　The Bank shall undertake the following foreign exchange business:

　1. To draw up plans for foreign exchange management and on
　　　anticipated receipts and payments;

　2. To authorize and supervise banking and other enterprises engaged in
　　　foreign exchange business;

　3. To settle the purchase and sale of foreign exchange;

　4. To examine and approve private outward and inward remittances;

　5. To supervise private enterprises' foreign borrowings guaranteed by
　　　authorized banks, with reference to their management and their
　　　repayment schedule;

　6. To purchase and sell foreign currencies, bills of exchange and
　　　securities;

　7. To calculate, compile, analyse and report the receipts and payments
　　　of foreign exchange;

　8. Other operations relating to foreign exchange.

　Regulations governing requirements of application, the examination 
procedure, approval of authorization, the scope of operations, withdrawal 
of authorization, and other matters which banking and other enterprises 
applying to engage in foreign exchange business must comply with, 
shall be prescribed by the Bank.

Article 36

　The Bank shall effect the operations of the National Treasury and manage the 
National Treasury's as well as the Central Governmental agencies' cash accounts, 
bills, securities, including receipts and payments, safekeeping and transfers, 
and the safekeeping of their other asset documents.

　The Bank may delegate, whenever necessary, the operations mentioned above
to other financial institutions in places where the Bank has no branch office.

Article 37
　The Bank shall undertake the floatation, redemption and interest payment of 
central government bonds and treasury bills issued domestically or abroad. The 
Bank may delegate the above-mentioned operations to other financial 
institutions, whenever necessary.

Article 38

　In conformity with the powers and functions authorized by this Act, the Bank, 
if necessary, may undertake the inspection of the operations of financial 
institutions and the targeted examination of such operations as outlined in 
Chapter 3 of this Act; and may direct financial institutions to prepare and 
submit, within a prescribed period of time, accurate financial reports, 
property inventories or other relevant documents and reports.

　If the responsible person(s) or staff member(s) of a financial institution 
or its branch office commit(s) any of the following acts when the Bank dispatches 
officials to inspect or examine its operations, or directs the financial 
institution to prepare and submit accurate financial reports, property 
inventories or other relevant documents and reports in accordance with the 
preceding paragraph, the financial institution or its branch office shall be 
liable to a fine of not less than Two Million New Taiwan Dollars (NT$2,000,000) 
but not more than Ten Million New Taiwan Dollars (NT$10,000,000), imposed by 
the Bank:
　1. Refusing to be inspected or examined;
　2. Concealing or damaging account books and documents related to business 
　　　or financial conditions;
　3. Refusing to reply or providing false information to inquiries made by the 
　　　examiner without justifiable reasons;
　4. Failure to provide accurate and complete financial reports, property 
　　　inventories or other relevant documents or reports in a timely manner.

　The financial institution or its branch office shall seek recourse from the 
responsible person(s) after paying such administrative fines.

Article 39
　The Bank shall, to facilitate the formulation of financial policies and 
the execution of its operations, regularly collect economic information, 
compile financial statistics and conduct financial and economic research.