Tue, Aug 30, 2005 - Page 10 News List

Laborers protest bank's rates for consumer loans

By Jason Tan  /  STAFF REPORTER

Members from the Taiwan International Workers' Association demonstrate outside China Trust's Taipei headquarters yesterday, protesting what they say is the bank's exploitation of foreign workers. The group accused the bank of levying a 19 percent annual interest rate, higher than those imposed on local borrowers, on loans granted to Indonesian workers in Taiwan through its Jakarta branch. The money is used to pay brokers' fees for job placement in Indonesia. The bank argued the interest rate was lower than those offered by Indonesian banks, but said it would consider making an adjustment and reducing the NT$4,000 (US$125) service charge collected from each borrower.

PHOTO: AFP

Indonesian laborers and a human rights group protested yesterday in front of Chinatrust Commercial Bank's (中國信託) head office in Taipei, asking the government to look into the high interest rates imposed on the brokerage loans.

"Chinatrust imposes 19 percent interest rates on brokerage loans for the Indonesian laborers, which is as high as the rates for cash-advance cards," said Wu Jing-ru (吳靜如), executive director of the Taiwan International Workers' Association (台灣國際勞工協會) which represented the foreign laborers at the demonstration.

Currently, Indonesian workers are brought into Taiwan's job market under the "state-to-state importation" scheme, a system that involves the assistance of an embassy or representative office in Taiwan and its counterpart in the country of origin.

Under this system, Indonesians are required to pay a brokerage fee amounting to NT$49,787 (US$1,533), for taking out loans from the Chinatrust representative office in Indonesia, the Bank Chinatrust Indonesia, to come and work in Taiwan.

Including the 19 percent interest rate, processing fee and account management charge, these laborers will have to fork out a total of NT$70,545 (US$2,171) to pay off their loans, Wu said.

In response, Chinatrust said that the interest rates are imposed based on the situation in Indonesia, where banking institutions normally charge between 20 to 43 percent interest on consumer loans.

According to Jack Cheng (鄭泰克), Chinatrust's executive vice president, Chinatrust Indonesia officially won the bid from the Indonesian ministry of manpower for this project.

"We are currently the only bank in charge of this loan operation, but we are not a monopoly as the Indonesian government is free to appoint other financial institutions as well," he said.

He added that further discussions between Chinatrust and Indonesian officials are under way.

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