The government yesterday unveiled incentives for private banks in the hopes that they would join state-run lenders in bailing out business affected by the COVID-19 pandemic.
A deposit that banks are required to make to hedge against bad debts has been lowered from 1 percent to 0.5 percent of total accounts receivable when a bank issues a loan to a small or medium-sized enterprise (SME) by tapping a NT$200 billion (US$6.64 million) fund provided by the central bank, Financial Supervisory Commission Chairman Wellington Koo (顧立雄) told a news conference at the Executive Yuan in Taipei.
That would allow the nation’s banks to save approximately NT$1 billion on such deposits, he said.
The commission has also set aside NT$180 million, or 2 percent, of a deposit insurance reserve fund to reward banks that help their clients secure loans from the central bank fund, Koo said.
The top three banks in number of loans issued, total amount of loans issued and fastest service on loans would have their deposit insurance premiums reduced, he said.
The money allocated for the rewards would likely be divided into portions of NT$90 million each, which would be tapped when banks are required to pay premiums in the second half of this and next year, he added.
In addition, processing fees for workers and small firms would be waived when they request loans from banks or are required to undergo credit history checks with the Joint Credit Information Center or the Taiwan Clearing House, Koo said.
This would save applicants about NT$300, he said.
As applications for subsidized loans available to workers and SMEs would be accepted until Dec. 31, central bank Governor Yang Chin-long (楊金龍) was asked whether the preferential interest rates that accompany the packages would be canceled once they end.
If the pandemic does not abate after a prolonged period, the central bank would be able to double the fund to be loaned to workers and SMEs, Yang said, adding that he believes that the SME Credit Guarantee Fund of Taiwan, which offers loans of up to NT$150 million for SMEs, would be able to up the ante as well.
As of Monday, the nation’s eight state-owned banks had received 5,406 requests for loans from businesses and individuals, of which 3,300 requests totaling NT$40.2 billion had been granted, Minister of Finance Su Jain-rong (蘇建榮) said.
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