Agricultural Bank of Taiwan (ABT, 農業金庫), the only financial institution in the nation dedicated to serving the agricultural sector, set up an international banking department yesterday to help local farmers sell their products overseas.
At the department’s opening ceremony, ABT chairman Chen Chao-hui (陳朝輝) said the local agricultural sector needs more financial support at a time when many farmers are seeking to market their products abroad.
Once the international banking department begins operations, Chen said, it would provide agricultural businesses with one-stop banking services, including the issuance of letters of credit and loans denominated in foreign currencies.
Taiwan had US$5.2 billion in agricultural exports and US$15.5 billion in agricultural imports last year, Chen said, reflecting the local agricultural sector’s need for foreign-exchange services.
Based on the Agriculture Finance Act (農業金融法) passed by the legislature in 2003, ABT began operations in May 2005. The government holds a 44.5 percent stake in the bank, while farmers’ and fishermen’s associations hold the remaining 55.5 percent stake.
The bank, headquartered in Taipei, has three branches, one each in Taipei, Taichung and Kaohsiung.
ABT has a good understanding of the needs of agricultural businesses to keep their products fresh when making overseas sales and the new department would work with farmers’ and fishermen’s associations to speed up the pace of fund flows to facilitate sales, Chen said.
ABT president Cheng Cheng-mount (鄭貞茂) said the bank plans to seek approval from the Financial Supervisory Commission to open an offshore banking unit (OBU) next year.
Enterprises are expected to take advantage of the OBU to obtain funds and market information when looking to expand their businesses overseas, Cheng said.
Next year, the bank intends to set up branches in Hsinchu and Chiayi, and all five branches would become authorized foreign-exchange banks, ABT said.
Chang Yung-cheng (張永成), an executive with the National Farmers’ Association, gave a thumbs up to the international banking department, saying it would make it easier for farmers to get foreign-currency-denominated loans to buy agricultural machinery.
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