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FSC to resume issuing licenses for new bank branches

The Financial Supervisory Commission (FSC) said yesterday it would resume issuing licenses to qualified local banks wishing to set up new branches this month after freezing the issuance of the permits for six years to promote consolidation in the nation's crowded banking sector.

The commission's decision will not apply to foreign banks and industrial banks, as the regulator will review their applications on a case-by-case basis, commission spokesperson Susan Chang (張秀蓮) said.

This month

Local banks must file their applications by the end of this month for two new branches and those that plan to set up outlets in rural areas will be eligible to receive one more license.

The commission will issue no more than 10 branch licenses to banks and two to cooperatives each year, Chang said.

Banks must meet 10 requirements, including a capital adequacy ratio exceeding 10 percent last year and a bad loan ratio that is not higher than 2 percent.

Helping out

Financial institutions that fail to meet the conditions but that have helped the government take over or manage troubled rivals within the past year will also be eligible to apply to set up new branches, Chang said.

So far, three institutions have managed or taken over troubled banks -- Cathay United Bank (國泰世華銀行); Taiwan Cooperative Bank (合作金庫銀行), which took over Great Chinese Bills Finance Corp (力華票券); and Bank of Taiwan (臺灣銀行), which helped manage China United Investment and Trust Co (中聯信託).
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