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

Subject:
In order to enhance global competitiveness, develop diversified business functions 
and expand the scope of operation of offshore banking units (“OBU”), effective 
from the issuance date of this letter, the CBC broadens the scope of NTD collateral 
which OBUs can accept in handling foreign currency credit extensions (per 
explanation).  Please take note and forward same to member banks and Taiwan 
branches of foreign banks.
Explanations:	
1.This is done in accordance with Article 8 of the Offshore Banking Act.
2.When an OBU handles foreign currency credit extensions, the OBU may accept 
　domestic or foreign shares, real estate or other NTD assets as collateral or sub-
　collateral. Where the relevant customer is in default and is unable to repay and,
　as a result, there is a need to dispose of domestic shares, real estate or other 
　NTD assets, the foreign exchange settlement for the relevant remittance and 
　exchange between NT Dollars and foreign currencies may be handled by the head 
　office of the relevant domestic bank or a Taiwan branch of the relevant foreign 
　bank in accordance with Article 4, Paragraph 1, Item 3 or Article 6 of the 
 “Regulations Governing Declaration of Foreign Exchange Receipts and Disbursements 
　or Transactions”.
3.Where there is a loan loss with respect to the debtor, the OBU may take title of 
　the collateral described in the preceding paragraph but shall dispose of such 
　collateral within four years after the acquisition of such collateral, unless 
　otherwise approved by the competent authority.
4.When an OBU engages in cross-straits foreign currency credit extensions , the 
　taking of collateral by the OBU shall be handled in accordance with the 
 “Regulations Governing Approvals of Banks to Engage in Financial Activities 
　between the Taiwan Area and the Mainland Area”.
5.The letters issued by the CBC, dated September 23, 1998 (Ref. No (87) Tai-Yang-
　Wai-(11)-Tzu No. 0401989) and January 12, 2005 (Ref. No Tai-Yang-Wai-(7)-Tzu 
　0940007309) shall cease to apply from the issuance date of this letter.