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

(Basis of prescription)
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.

(Purpose, source, and limit of funds allocation)
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.

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

(Terms of lending)
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.

(Deadline for banks to apply to the Bank for fund allocation)
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.

(Cost for banks underwriting loans)
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.

(Underwriting handling charges)
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.

(Allocation screening process)
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.

(Follow-up audits)
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.

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

(Notification of client repayment of principal)
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.

(Conduct of loans by grassroots financial institutions)
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.