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

 Article 6 Paragraph 3

　Those banks entrusted by the Bank (hereafter collectively referred to as 
"Trustee Institutions") specified in the preceding two Paragraphs shall 
consolidate reserve accounts B under their mandatory and re-deposit them in a 
special account established with the Department of Banking of the Bank. Deposits,
withdrawals and interest accrual on the said special accounts shall be handled in
the same manner as reserve accounts B established by financial institutions at 
the Department of Banking of the Bank.

 Article 7 Paragraph 1 Subparagraph 2

　2.Deposits in reserve accounts with the Department of Banking of the
　　Bank or Trustee Institutions.

 Article 7 Paragraph 2

　 "Reserve accounts" as referred to in Subparagraph 2 of the preceding
Paragraph shall mean the following two types of accounts:

　1.Reserve accounts A: Non-interest bearing accounts that can be
　　deposited or withdrawn at all times by the financial institutions
　　holding the accounts, either by issuing checks or by using the Bank's
　　Interbank Funds Transfer and Settlement System.

 Article 7 Paragraph 2 Subparagraph 2

　2.Reserve accounts B: These accounts are deposited and withdrawn by
　　financial institutions using passbooks, but are not available except
　　pursuant to the Bank's regulations or upon the exercise of pledge 
　　rights established pursuant to Article 15; such accounts may be
　　interest bearing.

Article 9

　The calculation period used as the basis for calculating the amount of required 
reserves to be set aside by financial institutions shall be from the first day of 
each month through the month's end, provided that for financial institutions 
starting up operations midmonth, calculations for the startup period shall begin on 
the date that operations begin.

　The daily average balance of required reserves (hereafter referred to as 
"Required Reserve Balance") for each period shall be the sum of the products of 
the daily balances of the various types of deposits and various other liabilities 
for which reserves are required multiplied by the legally required reserve ratios, 
divided by the number of days of the period.

　For the purpose of calculation, the balances for the previous business day
shall be taken as the balances on a non-business day for the various types
of deposits and other various liabilities.

　Financial institutions that settle accounts on a daily basis may, exempt from 
the restriction of the preceding Paragraph, apply for a daily listing of account
balances with the Bank.

Article 10

　The maintenance period for the setting aside of actual reserves by
financial institutions shall be from the fourth day of each month to the
third day of the following month, provided that for financial institutions
starting up operations, calculations for the startup period shall begin on
the date that operations begin.

　The daily average balance of actual reserves held by financial institutions
shall be the sum of the daily balance of actual reserves divided by the
number of days in the period, provided that for financial institutions
starting up operations, the average balance shall be calculated and
divided by the days that the institution has been in business during the
period.

　For the purpose of calculation, the balances for the previous business day
shall be taken as those for a non-business day.

　Financial institutions that settle accounts on a daily basis may, exempt from 
the restriction of the preceding Paragraph, apply for a daily listing of account
balances with the Bank.

Article 11

　Within five business days after the end of the reserve period, the Financial
Institution Reserve Adjustment Form ( hereafter referred to as ”Reserve
Adjustment Form”) shall be submitted together with the related daily
statements for each relevant business day to the Trustee Institution for
reserve audit.

　The format for the Reserve Adjustment Form in the preceding Paragraph
shall be formulated by the Department of Banking of the Bank.

Article 12

　Except where otherwise provided by the Bank, balances in financial 
institution reserve accounts B shall be adjusted each period by a certain
portion of the Required Reserve Balance for the prior period; the portion shall
be specified by the Bank.

　Balances in the preceding Paragraph shall be adjusted before the deadline
for submitting Reserve Adjustment Forms for audit. Interest will not be
paid on reserve accounts B for periods in which the said accounts fail to
comply with requirements.

　For financial institutions that complete adjustments before the deadline,
in the event that errors or omissions result in the failure to meet the
required amount, the said financial institutions shall make the necessary  
corrections before the adjustment deadline or five business days thereafter; 
failure to correct shall be disciplined in accordance with the provisions of the
preceding Paragraph.

Article 13

　Trustee Institutions shall consolidate the Reserve Adjustment Forms
submitted by their various branches and the related daily statements for
each business day, and shall use these as the basis for summarizing the
Form of Reserve Summary of Mandate Financial Institutions, and shall
submit these forms mentioned above to the Department of Banking of the
Bank for audit within five business days after the deadline for submission
of the Reserve Adjustment Forms for audit as stipulated in Article 11.

　The format of the Form of Reserve Summary of Mandate Financial
Institutions shall be formulated by the Department of Banking of the
Bank.

 Article 14 Paragraph 1

　In the event that the actual daily average reserve balance for a financial 
institution during a given reserve maintenance period fails to meet the Required 
Reserve Balance as set forth in Article 9, the financial institution may apply 
to offset the shortfall by the excess reserve of prior period within the limit 
of 1% of Required Reserve Balance for the prior period. For shortfalls in excess
of one percent, or the balances which are not replenished, those financial 
institutions will be charged penalty interest at 1.5 times the Bank's rate on 
temporary accommodations, and in serious circumstances they will be disciplined 
pursuant to the provisions of Article 132 of the Banking Act.

 Article 14 Paragraph 2

　If a financial institution reports false information, the Bank may dispatch
personnel to conduct a special examination, and may take appropriate measures
in light of the violation.

Article 15

　In the event that a financial institution experiences a demand for funds due 
to unusual withdrawals or coordination with the monetary policy of the Bank, the 
financial institution may access to accommodations from  its Trustee Institution
within the line of a part or all parts its reserve accounts B balance.

　When necessary, the Trustee Institution that grants accommodations may access 
to the Bank for re-accommodations; the line of the re-accommodations shall not 
exceed the amount of collateralized borrowings processed by the borrowing 
financial institution, and shall be secured by the same amount of the special 
reserve account balance which was originally consolidated and re-deposited at 
the Bank by the Trustee Institution.

 Article 16 Paragraph 2

　In the event of merger, the surviving or newly established financial
institution shall handle the calculation and adjustment of reserves during
the merger.