Borrowers may have to think before defaulting on their debts in the future, as an amendment that would empower banks to make public the names of those with bad debts passed its first reading yesterday.
According to the amendment to Article 48 of the Banking Law (銀行法), banks can disregard their confidentiality obligation and announce the names of borrowers whose cumulative unpaid bad loans total more than NT$30 million (US$897,000) over an indefinite period, or between NT$10 million and NT$30 million within one year, for the public's reference
The amendment also authorizes banks to make public the names of people who have been indicted for damaging the credit of local or foreign financial institutions through spreading rumors or through fraud, and of bank managers and employees indicted for harming lenders' interests for their own unlawful benefit.
The threat of the disclosure of such information could prevent ill-intentioned or privileged debtors from risky borrowing, which in turn may stop illegal activities from endangering financial stability, Democratic Progressive Party Legislator Lin Chung-mo (林重謨) said.
Lin made the proposal for the amendment with the support of 36 lawmakers from across party lines.
"This is expected to help enhance the transparency of financial markets and facilitate financial supervision," Lin said.
Methods of publicizing the names of debtors could include announcements on
banks' Web sites, but the details are still at the planning stage for the
moment, according to Jong Huey-jen (鍾慧貞), deputy director-general of the
Banking Bureau under the Financial Supervisory Commission.
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