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

1. The Regulations are promulgated pursuant to Articles 28, 29 and 31 of the Central Bank of the Republic of China(Taiwan)Act and Paragraph 2, Article 37 and Article 40 of the Banking Act of the Republic of China.

2. The terms used in the Regulations shall have the following meanings:

(1)"Financial institutions" shall include domestic banks, branches of foreign banks in Taiwan, credit cooperatives, Agricultural Bank of Taiwan, credit departments of farmers' associations, credit departments of fishermen's associations, Chunghwa Post Co., Ltd., and insurance companies.

(2) "High-priced housing loan” shall mean a mortgage extended by a financial institution to a borrower for purchasing any of the following types of house (land included) where the title deed of the house contains the wording “residential”:

a. The house is located in Taipei City with an appraised value or purchase price of NT$70 million or more;

b. The house is located in New Taipei City with an appraised value or purchase price of NT$60 million or more; or

c. The house is located in an area within Taiwan other than Taipei City and New Taipei City with an appraised value or purchase price of NT$40 million or more.

(3) "Borrower" shall mean an individual or a corporate body.

3. High-priced housing loan extended by a financial institution to a borrower shall be subject to the following restrictions:

(1) No grace period is allowed;

(2) The maximum amount of the home mortgage loan shall not exceed 60 percent of the house’s appraised value (land included) or its purchase price, whichever is lower; and

(3) The loan amount mentioned in the preceding subparagraph shall not be increased for reasons of home renovation, working fund or other purposes.

4. A financial institution shall conduct the appraisal for high-priced housing loan in accordance with its internal lending rules and the provisions set forth by the competent authority.

When a financial institution accepts the transfers of loans stated in the preceding paragraph, the loan amount shall not be increased through reappraising.

5. A financial institution shall file reports on its high-priced housing loans periodically in accordance with the form set forth by the Central Bank of the Republic of China (Taiwan).

A financial institution shall set out internal risk control, operating procedures and other necessary internal rules for its high-priced housing loan businesses. If the lending criteria of a financial institution’s internal rules are stricter than the Regulations, the financial institution shall extend loans in accordance with its internal rules.