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Article 1
These Regulations are prescribed pursuant to the provisions of Paragraphs 1 and 2,
Article 23 of the Central Bank of the Republic of China (Taiwan) Act and Paragraph 1,
Article 42 of the Banking Act.
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Article 2
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The term ”financial institutions” as referred to in these Regulations shall mean
financial institutions subject to the provisions of the Banking Law.
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The term ”checking account deposits” as referred to in these Regulations shall
mean deposits permitting the depositor to freely withdraw funds by issuing
checks/giro checks, or to make payment by utilizing automation equipment based on
the commission.
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The term ”savings deposits” as referred to in these Regulations shall mean
demand or time deposits belonging to individuals or non-profit juristic persons for
the purpose of accumulating funds.
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The term ”demand deposits” and ”time deposits” as referred to in these
Regulations shall be subject to the Articles 7 and 8 of the Banking Law.
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Article 3
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The types of deposits for which financial institutions shall set aside
reserves are as follows:
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1.Checking deposits (including checking deposits, postal giro savings
with checks, certified checks, and traveler's checks).
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2.Demand deposits (including demand deposits, postal giro savings
without checks, funds accepted in advance or reserved redemption
amounts for stored value card operations, stored value funds
deposited in electronic stored value cards or electronic payment
accounts).
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3.Savings deposits (including demand savings deposits, bank employee
demand savings deposits, postal passbook savings; lump-sum deposit and
withdrawal savings deposits, installment deposit and lump-sum withdrawl
savings deposits, lump-sum deposit and installment payment savings
deposits, interest-paying savings deposits, bank employee time savings
deposits, and time savings deposits under postal time deposit services).
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4.Time deposits (including time deposits, negotiable certificates of
deposit, and time deposits under postal time deposit services).
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Financial institutions are exempt from setting aside reserves for the
following types of deposits:
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1.Interbank deposits, excluding interbank time deposits.
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2.Government treasury deposits.
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3.Preferential interest deposits, including civil service pensions,
deposits of veteran benefits, and deposits by the Military Personnel
Saving Administration.
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4.Fixed-term deposits received by Grassroots Financial Institutions
and redeposited in agricultural banks pursuant to conditions set forth
by the Central Bank of the Republic of China (Taiwan) (hereafter referred
to as "the Bank").
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5.Deposits received by insured financial institutions from the Central
Deposit Insurance Corporation pursuant to the provisions of Articles
28 and 29 of the Deposit Insurance Act.
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6.Other deposits approved by the Bank.
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With respect to the fixed-term deposits exempt from reserves in
Subparagraph 4 of the preceding Paragraph, Agricultural Banks receiving
redeposits shall classify them as deposits under Paragraph 1 and set aside
reserves accordingly; the methods for the handling of such reserves shall be
formulated separately.
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Article 4
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The various liabilities other than deposits for which financial institutions
shall set aside reserves are as follows:
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1.Foreign currency deposits.
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2.Interbank overdrafts.
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3.Interbank call loans.
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4.Bank debentures.
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5.Interbank financing.
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6.Interbranch transactions.
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7.Accounts payable under forward contracts or bonds (bills) sold under repurchase
agreements.
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8. Principals received from the sale of structured products by banks.
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9.Other liabilities specified by the Bank.
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Accounts payable under forward contracts or bonds (bills) sold under repurchase
agreements as referred to in Subparagraph 7, preceding Paragraph shall mean the
trading position handled by financial institutions of bonds (bills) carrying a
repurchase clause.
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Article 5
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Except for those provided in Paragraph 2 hereof, the Bank shall publish the
reserve ratios (hereafter referred to as “Required Reserve Ratios”) on the types
of deposits set forth in Paragraph 1, Article 3, and the types of liabilities set
forth in the Article 4.
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The Required Reserve Ratios on principals received from the sale of structured
products by banks in Subparagraph 8 of Paragraph 1 of Article 4 shall be the
reserve ratio on time deposits as published by the Bank for sales denominated in
NT dollar, or the reserve ratio on foreign currency deposits as published by the
Bank for sales denominated in foreign currency.
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The Required Reserve Ratios on stored value funds deposited in electronic
stored value cards or electronic payment accounts in Subparagraph 2,
Paragraph 1 of Article 3 shall be the reserve ratio on demand deposits as
published by the Bank for accounts denominated in NT dollar, or the reserve
ratio on foreign currency deposits as published by the Bank for accounts
denominated in foreign currency.
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Article 6
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The Bank entrusts the Bank of Taiwan ( hereafter referred to as ”Trustee
Institution”) to handle the receipt, adjustment, audit and other matters
relating to reserves of regional commercial banks without headquarters or
branches in Taipei.
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The Bank entrusts the Taiwan Cooperative Bank (also referred to
as ”Trustee Institution”) to handle the receipt, adjustment, audit and other
matters relating to reserves of credit cooperatives, credit departments of
farmers' associations or fishermen's associations.
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Trustee Institutions shall consolidate reserves accounts B under their
mandatory and re-deposit them in a special account established with the
Department of Banking of the Bank. Deposits and withdrawals and
interest accrual on the said special accounts shall be handled in the same
manner as reserves accounts B established by financial institutions at the
Department of Banking of the Bank.
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Article 7
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With the exception of the provisions under Paragraph 3, actual reserves
set aside by financial institutions for items which require reserves, shall
be limited to the following assets:
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1.Cash in vaults.
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2.Deposits in reserve accounts with the Department of Banking of the
Bank or Trustee Institution.
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3.Deposits that have been approved by the Bank for placement in "Interbank Funds
Transfer Guarantee Special Accounts" with the Department of Banking of the Bank
or to special accounts of similar properties with Trustee Institutions.
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”Reserve accounts” as referred to in Subparagraph 2 of the preceding
Paragraph shall mean the following two types of accounts:
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1.reserves 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.
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2.reserves 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
interestbearing.
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Actual reserves set aside by financial institutions with respect to
foreign currency items which require reserves are restricted to foreign
currency deposits placed with the Department of Foreign Exchange of the Bank.
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Article 8
The payment reserve for checks and drafts issued by a financial
institution with the financial institution itself as payer shall be cash in
vaults and reserves accounts A deposits placed with the Bank or Trustee
Institutions. When reserves are calculated, the amounts of such checks
and drafts shall be deducted; however, where the financial institution
issues such checks internally within for personnel and general affairs
expenditures, reserves shall be calculated and set aside in accordance
with the reserve ratio for checking accounts.
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Article 9
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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.
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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.
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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.
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Article 10
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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.
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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.
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For the purpose of calculation, the balances for the previous business day
shall be taken as those for a non-business day.
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Article 11
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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.
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The format for the Reserve Adjustment Form in the preceding Paragraph
shall be formulated by the Department of Banking of the Bank.
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Article 12
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Except where otherwise provided by the Bank, balances in financial
institution reserves 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.
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Balances in the preceding Paragraph shall be adjusted before the deadline
for submitting Reserve Adjustment Forms for audit. Interest will not be
paid on reserves accounts B for periods in which the said accounts fail to
comply with requirements.
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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.
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Article 13
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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.
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The format of the Form of Reserve Summary of Mandate Financial
Institutions shall be formulated by the Department of Banking of the
Bank.
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Article 14
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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 unsecured
short-term accommodation interest rate without collateral, and in serious
circumstances they will be disciplined pursuant to the provisions of Article 132 of
the Banking Act.
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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..
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Article 15
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In the event that a financial institution experiences fund demand 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 its reserves accounts B balance.
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When necessary, its Trustee Institution may access to the Bank for
reaccommodations; the line of the re-accommodation 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 re-deposit reserve account balance which was originally
consolidated by the Trustee Institution.
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Article 16
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Matters regarding the calculation and adjustment of reserves for each
financial institution shall be managed by its headquarter, with the
exception of local branches of foreign banks in Taiwan, in which case the
Taipei branches of the said banks shall handle related matters.
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In the event of merger, the surviving or newly established financial
institution shall handle the calculation and adjustment of reserves during
the merger.
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Article 17
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These Regulations shall become effective from the date of promulgation.
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The effective dates of amendments to these Regulations shall be
prescribed by the Bank.
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