Concerns over financial risks involved in issuing cash-advance cards have some banking industry officials questioning promotions of the plastic money, industry professionals said yesterday.
Macoto Bank (
"We've suspended all commercials designated to prompt cash-advance services for a couple of months," said Chang Jih-cheng (
While Macoto still offers the service, it will do so very low-profile, he said. The decision was made after a company evaluation showed a rise in bad loans coming from cash-advance services.
The company's cash-advance card default rate is about 2 percent, Chang said.
The cash-advance cards allow users to borrow a set amount of money at up to a 18.25 percent annual interest -- although rates vary among banks -- and at a cost of NT$100 per transaction
With an increasing number of banks lending money to people in need of emergency loans, TV stations are flush with ads portraying cash-advance cards as popular and easy to obtain. Several companies say card applications can be processed in 30 minutes.
As of the first quarter of this year, 26 domestic banks have collectively issued 2.41 million cash-advance cards, with Cosmos Bank (
One industry watcher criticized the cash-advance card as a risky financial product.
"It's nearly impossible for banks to conduct a thoughtful credit investigation in 30 minutes," said Norman Yin (殷乃平), a finance professor at National Chengchi University.
The risk of bad loans is high, he said, noting that some banks in South Korea and Indonesia reportedly went out of business due to high credit card and cash-advance card defaults.
Fubon Commercial Bank (
"We do not think it's ethical to encourage the public, especially young people without stable incomes, to get loans," said Chen Yi-fen (
The Bureau of Monetary Affairs has decided to issue guidelines for card companies. The rules, which are expected to come into force by the end of next month, will prohibit banks from issuing cards to people under the age of 20.
Students and people aged between 20 and 25 who have no regular income will not be able to obtain more than two cash cards, with a NT$20,000 limit per card.
As of February, the nation's cash-advance loans hit NT$91.5 billion, accounting for 2.32 percent of the nation's NT$3.941 trillion in consumer loans.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to