The Fair Trade Commission (FTC) is to begin reviewing the operations of the nation’s three Web-only banks in January, the Chinese-language Liberty Times (the sister newspaper of the Taipei Times) reported yesterday.
If approved by the antitrust watchdog, the banks would begin operations in a move that could trigger technological innovation, challenge traditional lenders and have wide ramifications for the financial industry.
The three Internet-based banks — Next Bank (將來銀行), Line Bank (連線商業銀行) and Rakuten International Commercial Bank Co (樂天國際商銀) — received their licenses from the Financial Supervisory Commission (FSC) at the end of July.
The lenders had announced earlier that they would begin operations in the first quarter of next year at the earliest.
However, the formal launch of their operations could be pushed back if the antitrust review is delayed due to outside causes or takes longer than expected, the newspaper said, citing people in the banking sector.
The commission is to begin reviewing Next Bank’s operations on Jan. 8 and Line Bank’s on Jan. 17, the newspaper said, citing the commission.
The commission has yet to set a review date for Rakuten International Commercial Bank, it said.
The reviews would focus on a number of key issues, including business scale and market conditions, and the commission would also take into account opinions from other market regulators — such as the FSC and the National Communications Commission — regarding the shareholder structure of the Web-only banks, the newspaper said, citing FTC Deputy Chairman Perng Shaw-jiin (彭紹瑾).
The shareholder structure is especially important, as the FTC needs to examine the market share of financial companies and telecoms that have a stake in the Web-only banks to see whether their partnerships could lead to unfair competition, it said.
Next Bank is 41.9 percent held by Chunghwa Telecom Co (中華電信), but it has four other shareholders from the financial industry: Mega International Commercial Bank (兆豐銀行), Shin Kong Life Insurance Co (新光人壽) and KGI Bank (凱基銀行), FSC data showed.
Line Bank, which is 49.9 percent owned by Line Financial Taiwan Corp (台灣連線金融科技), also has four shareholders from the financial industry: Taipei Fubon Bank (台北富邦銀行), CTBC Bank (中信銀行), Standard Chartered Bank Taiwan Ltd (渣打台灣銀行) and Union Bank of Taiwan (聯邦銀行), as well as two shareholders from the telecom industry: Taiwan Mobile Co (台灣大哥大) and Far EasTone Telecommunications Co (遠傳電信).
The shareholder structure of Rakuten International Commercial Bank is more simple, as it is mainly formed by Japan’s Rakuten Inc and Taiwan’s IBF Financial Holdings Co Ltd (國票金控).
In either case, the review needs to be meticulous and rigorous, as virtual banking is a new type of financial service in Taiwan, the FTC said.
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