The central bank yesterday asked lenders to cap financing for idle plots of industrial land at 55 percent, from about 70 percent currently, in a joint government effort to curb hoarding.
The moral imperative came after industrial land prices increased steeply over recent years and companies began to complain about difficulty acquiring land to meet their expansion needs, officials said.
Chen E-dawn (陳一端), deputy head of the bank’s economic research department, announced the self-disciplinary measures after a morning meeting involving the central bank, the Ministry of Finance, the Financial Supervisory Commission, the Ministry of Economic Affairs, the Joint Credit Information Center and 10 major domestic banks.
“All participants share the need to lower financing for idle industrial land plots,” Chen said at a news conference in Taipei, adding that some borrowers have used bank loans for land speculation, pushing up costs and slowing industrial development.
Idle industrial land totals about 812 hectares across the nation, Chen said, citing numbers from the Industrial Development Bureau.
The bureau defines idle plots as those whose owners fail to carry out construction for three years after purchase. The bureau surveys idle plots twice a year and turns its findings over to the Joint Credit Information Center.
The 55 percent cap applies to both new financing applications and existing cases, Chen said, adding that lenders should check with the credit center to see whether their real-estate financing operations involve one of the idle plots.
Banks should gradually take back credits in excess of the limit for existing loans and raise interest rates on such lending, Chen said.
For new loans, lenders should require borrowers to provide development plans, while also conducting post-lending inspections to ensure that borrowers enact their plans, she said.
Largan Precision Co (大立光), a leading local smartphone camera lens module supplier, has said it has been unable to acquire property for capacity expansion.
In the past few years, some Taiwanese firms based in China have voiced similar frustration after trying to move operations to the home market, in response to government calls.
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