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

1 These Directions are prescribed by the Central Bank of the Republic of China (Taiwan)(hereinafter referred to as "the Bank") to implement the provisions of Decree 2 of the Emergency Decree pomulgated by the President of Republic on September 25,1999.

2 The Bank will allocate the sum of NT$100 billion from postal savings system redeposits and other redeposits for banks to offer long-term low-interest and interest-free financing (hereinafter, the "Financing") to victims of the "921 Earthquake" [of September 21, 1999 ] to purchase a new home or rebuild or repair their residence to speed the process of home reconstruction and reduce the financial burdens of victims.

3 The underwriting banks for the Financing are listed in attached Table 1.

4 The terms and conditions for underwriting banks granting loans from the Funds are 　as follows:

(1) Borrower eligibility: Victims of the 921 earthquake, whose owner occupied homes have been surveyed and verified by the bank. The homeowner, the homeowner's spouse, or a lineal blood relative may apply for the loan to rebuild the home destroyed by the earthquake.

(2) Application deadlines: from September 25, 1999 to September 24, 2000. If a portion of the Financing funds remains unalloted after September 24, 2000, for the unalloted fund, may be accepted, but no later than February 4, 2006.

(3) Loan limits, interest rates:

i. New home and home reconstruction loans are limited to a maximum of NT$3.5 million per household. Loans of up to NT$1.5 million are interest-free. The portion of a loan in excess of NT$1.5 million shall be subject to a fixed annual interest rate of 3 percent. For home repair loans, each household may borrow a maximum of NT$1.5 million at a fixed annual interest rate of 3 percent.

ii. The fixed annual interest rate for the portion of new home and home reconstruction loans exceeding NT$1.5million shall be lowered to 2 percent from 3 percent beginning March 1, 2003.The fixed annual interest rate for home repair loans shall be lowered to 2 percent from 3 percent beginning November 1, 2003. The interest rate quoted herein is to be adjusted automatically to 3 percent when the one-year postal savings floating rate rises to 5.35 percent or higher.

iii. The fixed annual interest rate of 2 percent for the portion of new home and home reconstruction loans exceeding NT$1.5million and for home repair loans as described in the preceding item shall, beginning January 23, 2009, be adjusted to the same rate as the one-year postal savings floating rate when the one-year postal savings floating rate falls below 2 percent.

(4) Loan period and method of repayment: The maximum term is 20 years. Repayments shall be made in equal installments including principal repayments and the interest over the full term of the loan beginning from the fourth year.

5 Underwriting banks may apply to the Bank for disbursement of the Financing during the period from September 25, 1999 to October 24, 2001. In the event a portion of the Financing funds set forth in Point 2 remain following the deadline, disbursement applications may continue to be made within the scope of such remainder. Such applications may not be made beyond March 4, 2006, however, the deadline shall not be applied to those reconstruction projects which are imcomplete at that time and have been certified by their underwriting banks.

6 The interest rate charged underwriting banks by the Directorate General of Postal Remittances and Savings Banks on allocations of the Funds shall be set and adjusted in accordance with the floating interest rate on one-year postal time deposits (currently 5.35 percent per annum). The difference between the interest rate charged underwriting banks and the loan interest rates for the Financing shall be borne by the Bank.

7 Handling charges for banks underwriting loans from the Funds shall be calculated at one percent of the annual interest rate on the underwritten principal and shall be borne by the Bank.

8 Upon granting a loan, the underwriting bank shall fill out the Loan Details form in Attachment 2 and submit it to the Bank in application for allocation approval. The Bank will then remit the specified amount from the postal savings system redeposit funds into the Directorate General of Postal Remittances and Savings Banks' reserve account with the Banking Department of the Bank. The Directorate General of Postal Remittances and Savings Banks will then redeposit the Funds with the underwriting bank.

9 Underwriting banks shall conduct applications for Financing loans in accordance with these Directions. Loans shall be subject to examination by the Bank Examination Department. Where examination reveals non-compliance with regulations, the Bank may recall the amount of the improper loan and the underwriting bank shall be solely responsible for raising the funds.

10 Each type of loan from these Funds may be used in conjunction with other government-policy loans.

11 The underwriting bank, after undertaking the underwriting of loans from the Funds, shall submit to the Directorate General of Postal Remittances and Savings Banks and the Bank's Banking Department monthly notifications of the amount the client has repaid.

12 The Bank may allocate agricultural banks redeposits to the credit departments of farmers associations or credit cooperatives to provide Financing loans in accordance with these Directions. Guidelines for such operations shall be prescribed by the Farmers Bank of China, in conjunction with the Taiwan Cooperative Bank and the Land Bank of Taiwan, and shall take force after submission to and approval by the Bank.