The nation's central bank of China (央行) plans to closely monitor the use of government loan bail-outs, Chinese-language media reported yesterday.
The central bank will check on the use of the loans to see if they were used in forex dealings. The central bank will also monitor cross-strait capital flows.
The report said that the central bank discovered 12 cases of falsified reports recently, five of which generated profits from exchange rates.
Last Friday, central bank deputy governor Chen Shih-meng (
The government allotted NT$450 billion of loans last year in an effort to help stimulate the sluggish domestic economy.
As of April, out of the NT$450 billion in loans, NT$130.2 billion have been lent out to help traditional industries, the central bank said.
Chen said traditional industries remain crucial to Taiwan's economy. But he stressed that businesses which remit bail-out loans to China will be banned from accessing such loans in the future.
The central bank has since last year discovered some 60 violations of regulations governing foreign exchange settlements.
Apart from asking the local banks to keep a close eye on how the firms are using the loans, the central bank also said it would punish banks which helped businesses to falsify documents regarding their overseas remissions.
Banks could be stripped of government authorization to handle overseas currency remissions if they are found to be involved in such schemes, the paper said.
The lending effort is in part to help keep local companies operating in Taiwan from bolting across the Taiwan Strait to China in an effort to secure cheap land an labor for their manufactuing operations.
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