This Act is enacted to improve the conduct of the banking business, to protect the rights of depositors, to coordinate with the development of productive enterprises and to keep Bank credit abreast of national financial policy.

The term, "Bank", as used in this Act shall mean an organization formed and registered in accordance with the provisions of this Act for purposes of transacting a banking business.

Businesses which may be conducted by a Bank are as follows:
1.To accept Checking Deposits;
2.To accept various kinds of other Deposits;
3.To manage Trust Funds under mandate;
4.To issue Bank Debentures;
5.To extend loans;
6.To discount bills and notes;
7.To invest in securities;
8.To invest in productive enterprises;
9.To invest in residential construction and construction for business purposes;
10.To handle domestic and foreign remittances;
11.To accept commercial drafts;
12.To issue Letters of Credit;
13.To guarantee domestic and foreign transactions;
14.To act as collecting and paying agent;
15.To underwrite and trade in securities for its own account or for customers;
16.To manage issuance of bonds and debentures and to provide advisory services with respect thereto;
17.To act as attestor for the issuance of stocks, bonds and debentures;
18.To manage various kinds of property under mandate;
19.To conduct businesses related to investment and trusts regarding securities;
20.To buy and sell gold bars/coins and/or silver bars/coins and foreign currencies;
21.To conduct warehousing, custody and agency businesses in relation to the businesses item ized above; and
22.To conduct other relevant businesses which may be authorized by the Central Competent Authority.

The scope of business of each Bank shall be determined individually by the Central Competent Authority in accordance with the classification of the Bank and the items of business specified in this Act, and shall be indicated on the Business License of each such Bank. However, transactions relating to foreign exchange must be approved by the Central Bank of China.

Credit extended by a Bank under this Act shall be called short-term credit if such credit matures within not more than one (1) year; medium-term credit if such credit matures in more than one (1) year and not more than seven (7) years; and long-term credit if such credit matures in more than seven (7) years.

The term, "Accept(ing) Deposits", as used in this Act shall mean the act of accepting D eposits or other funds from the general public2, and agreeing to return the principal or to pay an amount equal to or greater than the principal.

The term, "Extend(ing) Credit", as used in this Act shall mean the following business conducted by a Bank:
1.Extending loans;
2.Extending overdraft facilities;
3.Discounting bills and notes;
4.Extending guarantees;
5.Accepting drafts; and
6.Other business as specified by the Central Competent Authority.

The term, "Checking Deposit", as used in this Act shall mean a Deposit which, as agreed, may be drawn at any time without interest by use of a check signed by the depositor or by use of automatic equipment under mandate.

The term, "Demand Deposit", as used in this Act shall mean a Deposit which can be drawn by the depositor at any time by use of a passbook or by other agreed means.

The term, "Time Deposit", as used in this Act shall mean a Deposit of a fixed term which can be drawn by the depositor upon maturity by presentation of a Deposit certificate or by other agreed means.

Time Deposits shall not be withdrawn before maturity, provided, that the depositor may pledge a time deposit or terminate a time deposit by giving seven (7) days prior notice to the Bank.
Rules governing the pledge and early-termination of time deposits shall be prescribed by the Competent Authority after consulting with Central Bank of China.

Deleted

The term, "Trust Funds", as used in this Act shall mean funds which are received by a Bank in the position of trustee and managed in accordance with the terms of a trust agreement for the interest of a beneficiary named by the trustor.

The term, "Bank Debentures", as used in this Act shall mean bonds/debentures issued by a Bank in accordance with the relevant provisions of this Act after having obtained the approval of the Competent Authority.

The term, "Secured Credit", as used in this Act shall mean the following collateral has been furnished to secure such credit:
1.Mortgage over immovables or movables;
2.Pledge over movables or rights;
3.Bills/Notes receivable from business transactions of a borrower; and/or
4.Guarantees extended by a government agency in charge of the public treasury, a Bank or a government authorized credit agency.

In extending self-use residence loans or consumer loans, the Bank shall not require provision of joint and several guarantor(s) for whatsoever reasons.
In extending self-use residence loans or consumer loans, if the Bank has obtained sufficient collateral in accordance with the preceding Article, the Bank shall not require provision of guarantor(s) for whatsoever reasons.
Subject to the preceding paragraph, if a guarantor is required by the Bank in connection with a credit extension, the guarantee shall be in a specific amount.
In seeking recovery, the Bank should first pursue the borrower and then pursue the guarantor(s) for the remaining portion on a pro-rata basis; provided, that such shall not apply to applications for execution title or in the provisional proceedings.

In terms of guaranty for a self-use residence loan or consumer loan, the duration of the contract of guaranty shall not exceed fifteen years from the date of formation of the contract, unless written consent of the guarantor has been obtained.

The term, "Unsecured Credit", as used in this Act shall mean a credit extended without having obtained any of the collateral listed in Article 12 of this Act.

The term, "Medium-or Long-term Loan Repayable in Installments", as used in this Act shall mean a loan extended by a Bank, the principal and interest on which shall be repayable and payable in installments in accordance with the terms of a loan agreement and other relevant terms to be observed by the borrower determined based on negotiations between the parties and the financial ability of the borrower to make repayment.

The term, "Commercial Negotiable Instrument", as used in this Act shall mean a bill of exchange or promissory note issued in connection with domestic or foreign trade in goods or services.
An aforesaid bill of exchange on which the recipient of the goods sold or services provided is named as payor and which has been accepted by such recipient, shall be called a trade or commercial acceptance.
In cases where the aforesaid recipient mandates a Bank as the payor and the bill of exchange is accepted by the Bank, such bill of exchange shall become a banker's acceptance. In cases where a person, who sells goods or provides services, signs and issues a bill of exchange in an amount based on transaction documents and on which a Bank is mandated as the payor and such bill of exchange is accepted by such Bank, such bill of exchange shall also be called a banker's acceptance.
Purchase of a post-dated bill of exchange or promissory note by a Bank by means of deducting non-accrued interest in advance shall be called a discount.

The term, "Letter of Credit", as used in this Act shall mean an instrument which a Bank issues upon the request of a customer to notify and authorize a beneficiary named by the customer to issue a draft or other certificate in accordance with a prescribed form and in an amount not to exceed a certain limit, such draft to be accepted or paid by the Bank or its designated correspondent upon the beneficiary performing certain agreed upon terms and conditions.

Deleted.

The term, "Responsible Person of a Bank", as used in this Act shall mean the person designated to be responsible in accordance with the provisions of the Company Law, other laws or the organic regulations and rules of the relevant Bank.

The term "Competent Authority" as used in this Act shall mean the Financial Supervisory Commission.

The term, "Bank", as used in this Act shall include:
1.Commercial Banks;
2.Banks for a Special Business Purpose; and;
3.Investment and Trust Companies.
Except for those Banks established by the Government, the type and special business purpose of a Bank shall be indicated in the Bank's name.
A non-Bank may not use a name specified in Paragraph 1 or any other name that would likely cause people to mistake it for a bank.

A Bank or a branch office thereof shall not commence business operations before having completed the formation procedures prescribed in Chapter II of this Act.

A Bank shall not conduct any business other than as approved by the Central Competent Authority.

To facilitate the development of general finance and financial technology, without limitation to the banks, an innovative banking business experiment may be applied for pursuant to the Act of Financial Technology Development and Innovative Experiment.
The foregoing innovative experiment may be exempt from the requirements of the Act within the period and scope approved by the competent authority.
The competent authority shall take account of the outcomes of the innovative experiment specified in Paragraph 1, and review the appropriateness of the Act and relevant financial laws.

The minimum capital requirements for different types of Banks shall be determined or adjusted, as applicable, by the Central Competent Authority based on the population and economic conditions in each of the geographic areas established by the Central Competent Authority and the type of Bank, respectively.
In the event that a Bank's capital falls below such minimum requirements after the aforesaid adjustment, the Central Competent Authority shall prescribe a period of time within which such Bank to increase its capital and shall revoke such Bank's Permit3 if the Bank fails to comply within such period of time.

The capital of a Bank shall be established in terms of the national currency.

The shares issued by a Bank shall be registered shares.
The same person or same concerned party who singly, jointly or collectively acquires more than five percent (5%) of a Bank's outstanding voting shares shall report such fact to the Competent Authority within ten (10) days from the day of acquisition; the preceding provision applies to each cumulative increase or decrease in the shares of the same person or same concerned party by more than one percent (1%) thereafter.
The same person or same concerned party who intends to singly, jointly or collectively acquire more than ten percent (10%), twenty-five percent (25%) or fifty percent (50%) of a Bank's outstanding voting shares shall apply for prior approval of the Competent Authority.
A third party who holds shares of the Bank on behalf of the same person or same concerned party in trust, by mandate or through other types of contract, agreement or authorization shall fall within the purview of a concerned party.
The same person or same concerned party who singly, jointly or collectively holds shares of the Bank representing more than five percent (5%) but less than fifteen percent (15%) of a Bank's outstanding voting shares prior to the implementation of the amendment to the Act on December 9, 2008 shall report such fact to the Competent Authority within six (6) months from the implementation date of the said amendment. Those who report to the Competent Authority within the said prescribed period may maintain their shareholding at the time of reporting. However, those whose original shareholding exceeds ten percent (10%) shall apply for the prior approval of the Competent Authority when they intend to increase their shareholding for the first time thereafter.
The regulations governing the qualifications and requirements for the same person or same concerned party who applies for approval pursuant to Paragraph 3 hereof or the proviso of the preceding paragraph, required documentation, shares to be acquired, purpose of acquisition, sources of funding, and other matters to be complied with shall be prescribed by the Competent Authority.
Where the same person or same concerned party who holds voting shares issued by a Bank without filing a report with the Competent Authority or obtaining approval from the Competent Authority in accordance with the provisions set forth in Paragraphs 2, 3 or 5 hereof, the excess shares held by such same person or same concerned party shall not have voting rights and shall be disposed of within the given period prescribed by the Competent Authority.
If the total number of a Bank's shares held by the same person or by the principal, his/her spouse and children under twenty (20) years of age exceeds one percent (1%) of the Bank's outstanding voting shares, such principal shall notify the Bank thereof.

The term "same person" as used in the preceding article shall mean the same natural or juristic person.
The term "same concerned party" as used in the preceding article shall mean parties related to the same natural or juristic person, including:
1. Parties related to the same natural person:
(1) The principal, his/her spouse and relatives by blood within the second degree of kinship.
(2) An enterprise in which the persons referred to in the preceding subparagraph hold more than one third (1/3) of its outstanding voting shares or more than one third of its capital.
(3) An enterprise or a foundation in which the persons referred to in subparagraph (1) hereof act as its chairman, president or directors representing the majority of directors.
2. Parties related to the same juristic person:
(1) The same juristic person and its chairman and president as well as the spouse and relatives by blood within second degree of kinship of the chairman and president.
(2) Enterprises in which the same juristic person and natural persons referred to in the preceding subparagraph hold more than one third (1/3) of their outstanding voting shares or more than one third of their capital, or enterprises or foundations in which the same juristic person and natural persons referred to in the preceding subparagraph act as their chairman, president or directors representing the majority of directors.
(3) The affiliates of the same juristic person. The term "affiliate" shall be defined under Articles 369-1 through 369-3, Articles 369-9 and 369-11 of the Company Law.
The calculation of shares of a Bank held by the same person or same concerned party under the preceding two paragraphs shall exclude shares held under the following circumstances
1. Shares acquired by a securities firm during the underwriting period of the securities and disposed of during the period prescribed by the Competent Authority.
2. Shares acquired by a financial institution under a collateral pledge or security agreement and four years have not elapsed since the date of acquisition.
3. Shares acquired by inheritance or bequest and two years have not elapsed since the date of inheritance or bequest.

The Central Competent Authority may impose restrictions on the establishment of new Banks or additional branches in specific geographic areas depending on local financial and economic conditions.

The establishment of Overseas branch(es) by a Bank shall require the approval of the Central Competent Authority after consultation with the Central Bank of China.

If a commercial bank or a bank f or a special business purposes conducts a trust or securities business, the business and accounting [for the trust or securities business] must be independent; rules related to the business scope and risk management [of such businesses] may be prescribed by the Competent Authority.
A Bank conducting a trust or securities business shall appropriate funds exclusively for such business operations. The amount of such exclusive business operation funds shall be as approved by the Competent Authority.
Unless otherwise provided by other laws, a Bank conducting a trust business shall be subject to the provisions of Chapter Six of this Act.
Unless otherwise provided by other laws or rules prescribed by the Competent Authority, a Bank's staff members conducting trust or securities business shall keep customer information and transaction materials confidential; such confidentiality obligations shall apply to dealings between such staff members and the staff members of other departments of the Bank.

Unless otherwise provided by law, any person other than a Bank shall not Accept Deposits, manage Trust Funds or public property under mandate or handle domestic or foreign remittances.
Upon a violation of Paragraph 1 of this Article, remedial action shall be taken by the Competent Authority or the competent authority in charge of the particular enterprise, together with the juridical police authority, and the case shall be referred to the court for action.If the person concerned is a juristic person, the responsible person shall be jointly and severally liable for repayment of the relevant obligations.
In performing the duties stipulated above, a suspected party's accounting books and documents may be searched and detained in accordance with the law, facilities including signs may be torn down and/or other necessary actions may be taken.

Using borrowed money, accepting investments, making the depositor a shareholder or using other classifications in order to accept deposits or obtain capital from the general public4 by agreeing to pay or paying a bonus, interest, share dividend interest or other reward in an excessive amount, shall be deemed the act of Accepting Deposits.

If, in connection with extension of loans, issuance of Letters of Credit or issuance of guarantees, the borrower, mandator or the party on behalf of which the guarantee is issued is a company limited by shares and, under the authority of a board of directors resolution, makes a written commitment to the Bank offering certain property as collateral and agreeing not to encumber the same by mortgage or pledge to a third party, the Bank may permanently or temporarily waive the registration of real estate mortgages or chattel mortgages or the delivery of the items pledged. However, the Bank may request subsequent registration or delivery thereof within a period of time prescribed by the Bank if and when necessary.
In the case of a breach of the aforesaid commitment by the borrower, mandator or guarantor, such borrower, mandator or guarantor's directors who participated in making such decision and the wrongdoer shall be jointly and severally liable for compensation.

Regarding the issuance of Letters of Credit and undertakings to accept Commercial Negotiable Instruments by a Bank, the rights and obligations between the Bank and its customer shall be governed by an agreement.
If security is required of a customer in connection with the aforesaid business, such security shall comply with Article 12 of this Act.

No unsecured credit shall be extended by a Bank to enterprises in which the Bank holds three percent (3%) or more of the total paid-in capital, to its staff members, to its Major Shareholders, to any interested party of its own responsible person or of a staff member in charge of credit extensions. However, the foregoing prohibition on unsecured credit shall not apply to consumer loans and loans extended to the government.
The credit amount of the aforesaid consumer loans shall be as prescribed by the Central Competent Authority.
The term, "Major Shareholder", as set forth in this Act shall mean a shareholder who holds at least one percent (1%) of the total number of issued and outstanding shares of the Bank. Where a Major Shareholder is a natural person, the shares of his/her spouse and the shares of his/her minor children shall be counted in the total number of shares held by such Major Shareholder.

For any secured credit extended by a Bank to enterprises in which the Bank holds at least five percent (5%) of the total paid-in capital of said enterprises, to its own responsible person, to its staff members, to its Major Shareholders, to any interested party of its own responsible person or of a staff member in charge of credit extensions, the terms of such extended credit shall not be more favorable than those terms offered to other same category customers. If the credit amount to be extended by a Bank exceeds the amount prescribed by the Central Competent Authority, a Bank needs the concurrence of at least three-quarters of all of such Bank's directors present at a meeting attended by at least two-thirds of the directors, to extend such credit.
[In addition to the foregoing], the amount of the aforesaid connected credit extension to each related party, the aggregate amount of such credit extensions thereof, the terms and conditions of such credit extension and the same category customers referred to under this preceding Paragraph shall be prescribed by the Central Competent Authority after consultation with the Central Bank of China.

The definition of interested parties as used in the preceding two articles shall mean:
1.Spouse, relatives by blood within the third degree of relationship or relatives by marriage within the second degree of relationship of the responsible person of a Bank or of a staff member in charge of credit extensions by such Bank.
2.An enterprise solely invested in, by or a partnership invested in by the responsible person of a Bank, by a staff member in charge of credit extensions of such Bank or by an interested party stipulated in Subparagraph 1 of this Article.
3.An enterprise of which more than ten percent (10%) of the total issued and outstanding shares or paid-in capital is solely or totally held by the responsible person of a Bank, by a staff member in charge of credit extensions of such Bank or by an interested party stipulated in Subparagraph 1 of this Article.
4.An enterprise invested in by a Bank in which a director, supervisor or manager of such invested enterprise is the responsible person, a staff member in charge of credit extensions of such Bank or an interested party stipulated in Subparagraph 1 of this Article; provided, that such investment and the holding of such concurrent positions has been approved by the Central Competent Authority.
5.A juristic person or other organization in which the representative or administrator is the responsible person of a Bank, a staff member in charge of credit extensions of a Bank or an interested party stipulated in Subparagraph 1 of this Article.

A Bank shall not "cross" extend unsecured credit to the responsible person or a Major Shareholder of such Bank's correspondent bank or to an enterprise whose responsible person is also the responsible person of the correspondent bank. Any secured [cross] credit extension thereof shall be handled in accordance with Article 33 of this Act.

The Competent Authority may impose restrictions on credit extensions or other transactions by a Bank with the same person, the same concerned party or the same affiliate, and issue regulations with respect to the limits on such credit extensions, the scope of other transactions, and other matters to be complied with.
The same person, same concerned party or the same affiliate with which a Bank may extend credit or engage in other transactions as referred to in the preceding paragraph shall be defined as follows:
1. The same person shall mean the same natural or juristic person.
2. The same concerned party shall mean the principal, his/her spouse and relatives by blood within the second degree of kinship, as well as enterprises in which the principal or his/her spouse is the responsible person.
3. The same affiliates shall be defined under Articles 369-1 through 369-3, Articles 369-9 and 369-11 of the Company Law.

The foregoing shall apply to persons falling under Articles 32, 33 or 33-2 who use other persons' names to apply for credit extensions.
The amount of credit extensions obtained by persons who obtained such extensions by using other persons' names and the amount of loan proceeds transferred to such persons by using other persons' names shall be deemed as credit extensions to such persons for purposes of the preceding paragraph.

In determining whether the amount invested by a Bank is more than three percent (3%) or five percent (5%), as applicable, of the paid-in capital of an entity for purposes of Article 32-1, Paragraph 1 and Article 33, Paragraph 1 the following investments shall be included:
1.The amount invested by one or more of the Bank's subsidiary(ies);
2.The amount invested by a third party acting for the Bank; and
3.The amount invested by a third party acting for the Bank's subsidiary(ies).
The term, "Bank's subsidiary", as used in the preceding Paragraph, shall have the meaning set out in Article 369-2, Paragraph 1, of the Company Law.

A Bank shall not offer allowances, gifts or other payments in addition to regular interest in order to solicit Deposits. This provision shall not apply to Trust Funds for which dividends may be declared pursuant to the relevant trust agreement(s).

A Bank that extends credit should set reasonable prices in consideration of factors such as market rates, its own funding costs, operating costs, expected credit losses and customer's overall contribution, and may not solicit or conduct credit extension business by offering unreasonable prices.

Neither the responsible person nor any staff member of a Bank shall accept, under any pretense, commissions, rebates and the amount of other unwarranted benefits from depositors, borrowers or other customers.

Neither the responsible person nor any staff member of a Bank may concurrently hold a position(s) in another Bank(s) unless in the capacity of a director or supervisor of an invested Bank arising from an investment relationship and then only with the approval of the Central Competent Authority.

The guidelines for qualifications and requirements for the responsible person of a Bank, restrictions on concurrent posts thereof, prohibition on conflicts of interest and other matters to be complied with shall be prescribed by the Competent Authority.
Where a responsible person of a Bank does not meet the qualifications and requirements set forth in the guidelines referred to in the preceding paragraph, the Competent Authority shall discharge the person; where a responsible person of a Bank violates the restrictions on concurrent posts and prohibition on conflicts of interest, the Competent Authority may order the bank to make adjustment within a prescribed period of time; the responsible person shall be discharged when the Bank fails to adjust within the time period and without justifiable reason.

The Central Competent Authority may, when necessary, impose appropriate restrictions on the extension of unsecured Loans or Guarantees by Banks after consultation with the Central Bank of China.
The Central Competent Authority may, when necessary, set the standard for the ratio of a Bank's major assets to major liabilities and major liabilities to net worth after consultation with the Central Bank of China. Any Bank, which ratio does not meet the above prescribed standard, in addition to being punished pursuant to the relevant provisions, may be restricted by the Central Competent Authority in distributing its profits.
The terms "major asset" and "major liability", as used in the preceding Paragraph shall be as defined by the Central Competent Authority taking into consideration the business nature of the different kinds of Banks.

The value of items to be pledged or properties to be mortgaged by a borrower shall accurately be determined by Banks based on current price, rate of depreciation and saleability.
Whenever necessary, the Central Bank of China, in order to control credit, may impose a maximum lending rate on loans secured by selected types of items for pledge or properties for mortgage.

Banks may extend medium-or long-term loans for the purchase or construction of residential buildings or buildings for business purposes. However, the term of such loans may not exceed thirty (30) years.

A Bank may extend medium-term loans to individuals for purchase of durable consumer goods or may discount notes issued by a buyer and endorsed by a distributor/seller.

In extending the loans referred to in the preceding two Articles, the procedure for repayment in instalments used in medium-or long-term loans shall be applicable. The Central Bank of China may, when necessary, regulate and control the terms and duration of repayment.

A Bank's interest rates shall be based on an annual rate and shall be posted in the Bank's place of business.

A Bank shall provide reserves for different types of deposits and other types of liabilities incurred by such Bank in accordance with the rates established by the Central Bank of China.
The scope of the "other types of liabilities" under the preceding paragraph shall be determined by the Central Bank of China in consultation with the Competent Authority.

Deleted.

In order to assure that a Bank maintains adequate liquidity, the Central Bank of China, after consultation with the Central Competent Authority, may from time to time prescribe a minimum ratio between the current assets of the Bank and the Bank's various liabilities. Upon a Bank's failure to comply with said minimum ratio, the Central Competent Authority shall notify the Bank to make due adjustment within a specified period of time.

A Bank's equity capital to its risk assets shall not be less than a certain ratio. For Banks which are required by the Competent Authority to produce consolidated financial statements, the equity capital to risk assets on such consolidated basis shall also meet a certain ratio.
Banks shall be graded by capital as follows based on the ratio of its equity capital to risk assets:
1. Adequate capital.
2. Inadequate capital.
3. Significantly inadequate capital.
4. Seriously inadequate capital.
The term "seriously inadequate capital" mentioned in subparagraph 4 of the preceding paragraph shall mean the ratio of equity capital to risk assets being less than two percent (2%). A Bank whose net-worth to total assets is less than two percent (2%) shall be deemed as having seriously inadequate capital.
The regulations governing the definition of "certain ratio" as referred to in Paragraph 1 hereof, the scope of a Bank's equity capital and risk assets, method of calculation, and measures for grading in Paragraph hereof, and reviews shall be prescribed by the Competent Authority.

Banks having any of the following situations are prohibited from distributing cash profits or buying back shares thereof:
1. The Bank is graded as having inadequate capital, significantly inadequate capital or seriously inadequate capital.
2. The Bank is graded as having adequate capital, but the Bank might be downgraded to any of the grades stipulated in the preceding subparagraph if it distributes cash profits or buys back shares thereof.
Banks stipulated in Subparagraph 1 of the preceding paragraph shall not make payments to their responsible persons other than remunerations, unless it is otherwise approved by the Competent Authority.

The Competent Authority shall take the following actions in part or in whole based on the grading of a Bank's capital:
1. Banks having inadequate capital:
(1) Order the Bank or its responsible person to propose a capital restructuring or other finance and business improvement plans. For Banks that fail to propose a capital restructuring or other finance and business improvement plans as ordered, or fail to carry out the said plan accordingly, supervisory actions for the next capital grade may be adopted.
(2) Restrict the new acquisition of risk assets or take other necessary actions.
2. Banks having significantly inadequate capital:
(1) Apply the provisions in the preceding paragraph.
(2) Remove the responsible person from his/her position and notify the competent authority in charge of company registration to take note thereof on the registered items.
(3) Order the Bank to obtain the prior approval of the Competent Authority before acquiring or disposing of specific assets.
(4) Order the Bank to dispose of specific assets.
(5) Restrict or prohibit credit extension or other transactions with interested parties.
(6) Restrict the investment activities or some businesses of the Bank, or order the Bank to close a branch or department within a prescribed period.
(7) Limit the interest rate the Bank pays on deposits to a level not exceeding the interest rate other banks pay on comparable deposits or deposits of the same nature.
(8) Order the reduction in remuneration of responsible persons, and the reduced remuneration shall not exceed 70% of the average remuneration paid out to the said responsible person within twelve (12) months before the Bank's capital becomes significantly inadequate.
(9) Assign officials to take conservatorship over the Bank's operations or take other necessary actions.
3. Banks having seriously inadequate capital: The Competent Authority shall take actions set out in Paragraph 2 of Article 62 of this Act in addition to the actions prescribed in the preceding subparagraph.
The Competent Authority may examine at any time the implementation status of the Bank's capital restructuring or finance and business improvement plan, if deemed necessary, consult with relevant authorities or institutions and entrust a professional institution to provide assistance t the cost of the Bank.
Where a Bank is under the conservatorship of an official assigned by the Competent Authority, Paragraph 3 of Article 62-2 of this Act shall apply mutatis mutandis.
Where a Bank's business operation is seriously inadequate or its capital might be downgraded, the Competent Authority may adopt supervisory actions for the next capital grade. Where there is a concern of imminent danger of the Bank's continuing operation or adverse effect on the financial stability, the Competent Authority should renew the review or adjustment of the Bank's capital grade.
The regulations related to the procedure for conservatorship mentioned in Paragraph 1 hereof, the responsibility and authority of the conservator, assumption of related expenses and other matters to be complied with shall be prescribed by the Competent Authority.

The Central Competent Authority may, at any time, appoint a designee, entrust an appropriate institution or direct a local Competent Authority to appoint a designee to examine the business, financial affairs and other relevant affairs of a Bank or related parties, or direct a Bank or related parties to prepare and submit, within a prescribed period of time, balance sheets, property inventories or other relevant documents for examination.
The Central Competent Authority may, when necessary, appoint professionals to verify statements, materials or affairs which are subject to examination pursuant to the preceding Paragraph, and such professionals shall, in turn, present a report to the Central Competent Authority. Any fees arising therefrom shall be borne by the relevant Bank(s).

A Bank shall establish an internal control system and audit system; regulations governing the objectives, principles, policies, operating procedures, qualifications and conditions for internal auditors, scope of internal control audits that a certified public accountant shall be engaged to undertake, and other matters requiring compliance, shall be prescribed by the Competent Authority. A Bank shall establish an internal processing system and procedures with respect to the evaluation of asset quality, the creation of loan loss provision, the clearing of and writing off of non-performing and non-accrual loans.
Applicable regulations with respect to the above system and procedures shall be prescribed by the Competent Authority.
Where any Bank operations are entrusted to another person to handle, the Bank shall adopt an internal operation system and procedures covering the scope of the matters entrusted, protection of customer rights and interests, risk management, and internal control principles. Applicable regulations with respect thereto shall be prescribed by the Competent Authority.
Where a Bank engages in financial derivatives business, the Bank shall establish internal operating systems and procedures for the scope of business, personnel management, customer protection and risk management. Applicable regulations with respect thereto shall be prescribed by the Competent Authority.

Banks shall reinforce security protections for their business premises, vaults, rental safe deposit boxes (rooms), automated teller machines, and cash transport operations. Applicable regulations with respect thereto shall be prescribed by the Competent Authority.
A Bank shall exercise the due care of a good-faith administrator with respect to deposit accounts. Where a deposit account is suspected of illegality or an obviously irregular transaction, a Bank may temporarily suspend deposits, withdrawals, or outward remittances of funds.
Standards for determining suspected illegality or obviously irregular transactions of accounts under the preceding paragraph and operational procedures and regulations for temporary account suspension shall be prescribed by the Competent Authority.

In order to safeguard the interests of depositors, a Deposit insurance organization may be formed by the Government or by one or more Banks.

In order to make reserves mutually available and to increase the availability and efficiency of credit, Banks may prescribe rules and regulations regarding the formation of an interbank organization to provide mutual support.

Institutions wishing to engage in a money market or credit card business shall first obtain the approval of the Central Competent Authority. Administrative rules governing such institutions shall be promulgated by the Central Competent Authority after consultation with the Central Bank of China.
Starting September 1, 2015, the interest rate charged by Banks on cash card or the interest rate charged by institutions engaging in credit card business on revolving credit shall not exceed f ifteen percent (15%) per annum.

Article 4, Article 32 through Article 33-4, Article 35 through Article 35-2, Article 36, Article 45, Article 45-1, Article 49 through Article 51, Article 58 through Article 62-9, Article 64 through Article 69 and Article 76 shall apply to institutions conducting a money market business.

A financial information service business which intends to engage in an inter-institutional funds transfer clearing services shall obtain the Competent Authority's approval to do so. If such business also involves large amount funds transfer clearing, the approval of the Central Bank of China is also required. Regulations with respect to the approval and management of such business shall be prescribed by the Competent Authority after consulting with the Central Bank of China.
To engage in an inter-institutional credit information business shall require prior approval from the Competent Authority. Regulations with respect to the approval and management of such business shall be prescribed by the Competent Authority.

A Bank may not accept requests from a third party to stop payment on deposits or remittances, to detain collateral or articles in such Bank's custody, or other similar requests, unless such requests are made under a judgment of a court or under relevant provisions of other laws.
A Bank shall keep confidential all related information on deposits, loans or remittancesof its customers unless under any of the following circumstances:
1. Otherwise provided for by law.
2. The write-off data related to the same customer whose delinquent debt has been written off and the cumulative amount of write-off exceeds NT$50 million, or the cumulative amount of delinquent debt of the same customer written off in half a year after the loan was made exceeds NT$30 million, .
3. The information on non-performing loan or non-accrual loan in cases prosecuted by prosecutors pursuant to Articles 125-2, 125-3, or127-1.
4. Other circumstances as prescribed by the Competent Authority.

At the end of each business year, each Bank shall prepare and submit its annual report and business report, financial statements, determination as to distribution of profits or make up of losses and other items designated by the Competent Authority to the Competent Authority and the Central Bank of China respectively, for recordation, within fifteen (15) days after such reports are approved by such Bank's annual shareholders' meeting or if there is no shareholders' meeting, within fifteen (15) days after such reports are approved by such Bank's board of directors, as applicable. The matters to be included in the annual report shall be as prescribed by the Competent Authority.
In addition to publishing its financial statements and other items specified by the Competent Authority in a daily newspaper in the place where such Bank is located or in such other manner as may be designated by the Competent Authority, a Bank shall also post one copy thereof in a conspicuous place in each of its business premises for [public] review; provided, that if Bank complies with Article 36 of the Securities and Exchange Act, the above publication shall not be required.
The reports and items required to be published under the preceding Paragraph shall be audited and certified by a certified public accountant.

A Bank, at the time of distributing its earnings for each fiscal year, shall set aside thirty percent (30%) of its after-tax earnings as a legal reserve. However, unless and until the accumulated legal reserve equals the Bank's paid-in capital, the maximum cash profits which may be distributed shall not exceed fifteen percent (15%) of the Bank's paid-in capital.
In the event that the accumulated legal reserve equals or exceeds a Bank's paid-in capital or the Bank is sound in both its finance and business operations and have set aside legal reserve in compliance with the Company Law, the restrictions stipulated in the preceding paragraph shall not apply.
In addition to the required legal reserve, a Bank may set aside a special surplus reserve in accordance with its Articles of Incorporation or a resolution of its shareholders meeting.
The regulations governing the criteria of capital adequacy ratio for being sound in finance and business operations as stipulated in Paragraph 2 hereof, asset quality and compliance shall be prescribed by the Competent Authority.

The business hours and holidays of Banks shall be prescribed and publicly announced by the Central Competent Authority.

So as to educate its professional staff, a Bank shall set aside funds exclusively for use in the development of financial study and training programs. Related methods and principals shall be established by the Bankers Association of the Republic of China and approved by the Competent Authority.

In order to further international cooperation between the competent finance authorities of the ROC government and foreign countries, the ROC government and agencies (or institutions) authorized by it may, based on the principle of reciprocity, enter into a cooperative treaty, protocol, or agreement with a foreign government or agency (institution), or with an international organization, to facilitate matters such as information exchange, technical cooperation, and investigative assistance.
Unless such action otherwise conflicts with the interests of the state or the public, the Competent Authority may, in accordance with the treaty, protocol, or agreement made pursuant to the preceding paragraph, request the provision of necessary information from related authorities and agencies (institutions) in accordance with the law, and based on the principles of reciprocity and confidentiality, provide such information to the foreign government, agency (institution), or international organization which has executed the given treaty, protocol, or agreement with the ROC government.