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

Subject: 
To meet funding needs of credit cooperatives, the “Regulations for Credit 
Cooperatives to Participate in the Interbank Call Loan Market” has been amended as 
provided in the Explanations below. Please forward the same, and act 
accordingly.

Explanations:
1.With respect to the regulations for credit cooperatives to participate in the 
　interbank call loan market, the CBC has already required Taipei Interbank Money 
　Center to handle the matter as set out in a Letter dated July 29, 1994 (Ref. No. 
　Tai-Yang-Ye-906).
2.To meet the funding needs of credit cooperatives, provisions in the relevant 
　regulations relating to members’ minimum equity and the minimum aggregate amount 
　of deposits are amended as follows: the members’ equity is reduced from NT$2 
　billion or more to NT$1.5 billion or more, and the aggregate amount of deposits 
　is reduced from NT$40 billion or more to NT$30 billion or more.
3.Any credit cooperative which meets these requirements but has severe operational 
　or management shortcomings on record is prohibited from participating in the 
　interbank call loan market.  The Taichung City Sixth Credit Cooperative complies 
　with relevant requirements and regulations, and accordingly should be permitted 
　to participate in the interbank call loan market.
4.The delinquency ratio of the Taipei City Second Credit Cooperative did not 
　conform to regulations at the end of 1994 and must therefore be improved within 
　three months. If this institution fails to improve within the prescribed period, 
　its participation in interbank call loan markets shall be withheld.

Attachments:

1994.7.29  (83)Tai-Yang-Ye-Tze No. 906

Subject: 
In response to changes in financial market and for the promotion of the sound 
development of the interbank call loan market, please add Credit Cooperatives to be 
members of the interbank call loan market as provided in the explanations, and 
amend the provisions of the “Directions Governing the Establishment of the Taipei 
Interbank Money Center” accordingly. 

Explanations:
1.For providing multiple funding channels for Credit Cooperatives and fostering the 
　robustness of the interbank call loan market, the CBC hereby prescribes the 
　following requirements relating to the participation of Credit Cooperatives in 
　the interbank call loan market:
　(1)the members’ equity (i.e. the net asset value) is NT$2 billion or more 
　　 (Currently, the lowest net asset value among business banks is NT$2.5 billion 
　　 of Taitung Business Bank).
　(2)the aggregate amount of deposits is NT$40 billion or more.
　(3)The ratio of members’ equity to aggregate amount of deposits is at least 5 
　　 percent (according to Direction 4 of the “Directions for Credit Cooperatives 
　　 to Raise Capital by Issuing New Shares” promulgated by the Ministry of 
　　 Finance (Ref. No. Tai-Cai-Qian-18690), a credit cooperative may discontinue 
　　 its capital raising activity only when its net asset value reaches five 
　　 percent (5%) of the aggregate deposit amount).
　(4)the delinquency ratio must not be over the average delinquency ratio of all 
　　 Credit Cooperatives in Taiwan (1.45 percent at the end of 1993).

　The five Credit Cooperatives which comply with the requirements above are Taipei 
　City Second Credit Cooperative, Taipei City Third Credit Cooperative, Banciao 
　Credit Cooperative, Taichung City Third Credit Cooperative, and Taichung City 
　Seventh Credit Cooperative.

2.Please amend the provisions in the Directions Governing the Establishment of the 
　Taipei Interbank Money Center accordingly and add Credit Cooperatives as members 
　of the interbank call loan market.