The Financial Supervisory Commission (FSC) would not tolerate a protracted price war by the three Web-only banks to undercut the competition, as it would disrupt the market, FSC Chairman Thomas Huang (黃天牧) said yesterday.
That was the message he gave Chien Ming-jen (簡明仁), chairman of Rakuten International Commercial Bank Co (樂天國際商銀), the first among the three to obtain an operating license, at a private meeting on Wednesday, Huang told reporters on the sidelines of an event in Taipei.
The other two — Next Bank (將來銀行) and Line Bank (連線商業銀行) — have not submitted their applications for a license, but they are expected to file the documents next month at the earliest, the commission’s data showed.
Photo: Wu Chi-lun, Taipei Times
It is expected that Web-only banks would offer higher interest rates for deposits, lower interest rates on lending, better rewards rates or other discounts than those offered by traditional banks, in a bid to attract customers, as they have no physical branches to meet clients, Huang said.
“It is tolerable for the virtual banks to offer better rewards or prices shortly after they begin operating, but we would not allow them to make it a long-term strategy,” Huang said.
The commission hopes that the digital banks would offer innovative services or products instead of setting unreasonably low prices to attract customers to ensure solid and sustainable development, Huang said.
“It would be meaningless if they expand their business by initiating a price war,” he said.
Huang also told Rakuten about risks in information security, liquidity, risk management, compliance and corporate reputation to maintain market discipline, he added.
Rakuten International Commercial Bank, which is 51 percent owned by Japanese e-commerce company Rakuten Inc and 49 percent by IBF Financial Holdings Co (國票金控), received its operating license on Tuesday.
As virtual banks are barred from installing automatic teller machines (ATM), Rakuten plans to cooperate with traditional banks so its clients can use their ATMs for withdrawals, the commission said.
Rakuten Bank plans to offer deposits, fund transfers, small loans and debit card services in the initial phase and gradually expand into mortgages and corporate loans, Chien told reporters at a meeting in Taipei last month.
The bank aims to sign up 500,000 digital savings accounts next year, focusing on clients within the Rakuten ecosystem, such as those visiting its e-commerce site, Chien said.
After obtaining an operating license, the bank still needs to connect its information-flow and fund-flow systems with the central bank, the Central Deposit Insurance Corp (中央存保) and other agencies, he said.
At a red-brick factory in the German port city of Hamburg, cocoa bean shells go in one end and out the other comes an amazing black powder with the potential to counter climate change. The substance, dubbed biochar, is produced by heating the cocoa husks in an oxygen-free room to 600°C. The process locks in greenhouse gases and the final product can be used as a fertilizer, or as an ingredient in the production of “green” concrete. While the biochar industry is still in its infancy, the technology offers a novel way to remove carbon from the Earth’s atmosphere, experts have said. Biochar could
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, on Monday issued a statement about the balanced life environment it provides its employees, in response to a Fortune article at the weekend in which several former and current employees in the US were quoted complaining about the company’s “brutal” corporate culture. In the statement, TSMC said average work hours at the company have not exceeded 50 hours a week over the past two years with only a few exceptions, such as when the company introduces a new technology process or speeds up building a new plant. In such situations,
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) shares yesterday rallied 2 percent on the local stock market after Nvidia Corp said the contract chipmaker would be the sole supplier of its latest graphics processing chip, defusing speculation that Intel Corp would get a share of the orders. TSMC’s share price climbed to NT$562, snapping a three-day losing streak. It outperformed the benchmark index’s 1.18 percent gain. Net purchases by foreign institutional investors yesterday totaled 8.37 million shares, reversing net sales of 2.9 million shares on Thursday. The rebound follows Nvidia’s announcement that its latest artificial intelligence graphics processing unit (GPU), codenamed H100, would
WEAK PROSPECTS: The contract electronics manufacturer expects revenue to drop this quarter due to product transitions and a high comparison base a year earlier Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler, yesterday posted a second straight monthly growth in revenue to NT$45.07 billion (US$1.47 billion) last month, thanks to a pickup in smartphone demand. Last month’s revenue marked its best performance since January. On an annual basis, sales dipped 9.45 percent, the smallest annual decline since February, compared with NT$49.78 billion in May last year. Revenue from smart consumer electronics products, primarily iPhones and smartphones for other brands, delivered a “strong” double-digit, month-on-month growth in May because of customers’ pull-in, Hon Hai said in a company statement. That was the only business category