Financial Supervisory Commission (FSC) Chairman Wellington Koo (顧立雄) yesterday reiterated that bank executives and board members cannot concurrently serve as directors or supervisors at virtual banks, after Mega International Commercial Bank (兆豐銀行) reportedly protested that it could not appoint its own officials to sit on the board of Next Bank (將來銀行).
Koo said that local and foreign banks with local operations cannot appoint their chairpersons, general managers or ranking managers to sit on the boards of virtual banks in which they invest.
However, financial conglomerates that own the banks could send their directors and general managers to the Web-only banks’ boards, as there is no direct conflict of interest, he said.
Based on Koo’s clarification, Taipei Fubon Commercial Bank (台北富邦銀行), which owns a 25.1 percent stake in Line Bank (連線商業銀行), cannot have its chairman or general manager concurrently work as a director or supervisor at the virtual bank.
However, Line Bank’s board could include Fubon Financial Holding Co (富邦金控) president Jerry Harn (韓蔚廷).
The commission would only allow lenders’ executives to take a seat on the boards of Web-only banks when there is no concern about conflicts of interest, Koo said.
Local bank managers in charge of sections that are not in direct competition with Web-only banks — such as information security, accounting and finance, and legal compliance — would also be allowed to join the boards of virtual banks, Koo added.
In other words, Standard Chartered Bank Taiwan Ltd (渣打台灣銀行), which has invested in Line Bank, could appoint its chief information security officer to sit on the board of the virtual bank, but not its credit card business executives, Koo said.
Regarding Mega Commercial Bank’s complaint that it could not send executives to join the board of Next Bank, Koo said that Mega Financial Holding Co (兆豐金控) could send someone instead.
“We respect Mega Bank’s decisions regardless of whether it is to pull out from its investment. The bank does not need our approval if it wants to exit, but Next Bank will have to apply to us if it is to have new shareholders,” he said.
Japan’s Rakuten Inc, which holds a 51 percent stake in Rakuten International Commercial Bank Co (樂天國際商銀), would be allowed to send directors or managers of its Rakuten Bank to the board of its local unit, as the Japanese bank has no local operations, Koo said.
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