The Financial Supervisory Commission (FSC) yesterday slapped a NT$2 million (US$60,000) fine on Taishin International Bank (台新銀行), the nation's third biggest credit-card issuer, and forbade the lender from issuing new credit cards for at least one month over a customer data leak.
"The bank's leak of customers' credit-card applications and reference documents highlighted the institution's flawed internal controls," FSC spokeswoman Susan Chang (張秀蓮) told a press conference yesterday.
The punitive ruling will not be revoked until the lender demonstrates it has made significant improvements in protecting personal information and provided a written report certified by an independent audit agency, Chang said.
The penalty came after Chinese Nationalist Party (KMT) Legislator Chiu Yi (邱毅) last month accused Taishin International of improperly issuing its Infinite Card to members of the first family through the use of documents obtained from unidentified employees at the bank.
Taishin International has disciplined 117 employees for the incident and said it will abide by the regulator's decision.
The bank said it will make the necessary adjustments as expediently as possible to ensure a much stricter control over customer data. It also informed its customers there would be no interruption in services.
As of March, Taishin International had 3.19 million credit cards in circulation. During that month alone, it issued 21,047 credit cards and total transactions were valued at NT$6.72 billion, government statistics showed.
The freeze in card issuance could represent a loss of over NT$44 million monthly for the bank.
This development could overshadow parent company Taishin Financial Holding Co's (台新金控) takeover bid for Chang Hwa Bank (彰化銀行), as the FSC said it could take this into account while reviewing the bank's future investment applications or business plans.
Meanwhile, the commission confirmed it had launched ad hoc inspections of several financial institutions, including the state-controlled Chang Hwa.
"We are conducting inspections at the top ten banks that posted the largest amounts of bad debts to see if there are any irregularities involved in the process of granting loans," Chang said.
The financial watchdog will impose punitive measures on lenders found in breach of regulations and could, if necessary, hand over some cases to prosecutors, Chang said without elaborating.
As of the end of last year, Chang Hwa had incurred the highest amount of bad loans among the nation's 42 lenders, estimated at NT$50.8 billion. It was followed by Mega International Commercial Bank (
In response, Chang Hwa spokesman James Shih (
The regulator expressed concerns over bank chairman Chang Po-shin (
The bank's supervisor has been asked to look into the matter, Shih said.
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