FSC announced related regulations regarding internet-only banks establishment and started to accept applications
On November 14, 2018 the FSC announced amendments to two decrees relating to internet-only banks establishment, namely, Standards Governing the Establishment of Commercial Banks and Regulations Governing Investments in Other Enterprises by Commercial Banks. These two decrees have taken effect since November 16, 2018 and the FSC started to accept applications for setting up internet-only banks on the same date. Interested parties may submit applications to the FSC within three months and the FSC plans to evaluate the application within four months. The main points of the aforementioned amendments are as follows:
- Capital and finance requirement: Minimum paid-in-capital for establishing an internetonly bank is NT$10 billion, same as setting up a conventional commercial bank; founders shall subscribe for all the shares to be issued at the time of incorporation of the internet-only bank and complete supplementary procedures for classification as a public company within one year.
- Requirements of founders: It stipulates shareholding requirements for specific types of financial institutions such as at least one of the founders should be a bank or a financial holding company and its shareholding should reach 25%; a foreign financial institution can be the founder of an internet-only bank and is required to submit a consent letter from their home country financial authority; it also stipulates the qualifying requirements for non-financial institutions to subscribe over 10% of the issued shares and requirements for board members of internet-only banks; in addition, the FSC has revised the regulation that commercial banks holding a certain percentage of an internet-only bank can be exempted from the restriction requiring such commercial bank cease operation of the same type of business.
- Physical presence: Apart from a head office and customer service center, internet-only banks are not allowed to set up physical branches.
- Business plan: Based on the business characteristics of internet-only banks, the business plan of such bank should contain, among other things, customers identity verification mechanism, IT system, security controls, backup operations, business continuity plan, liquidity management mechanism, and market exit plan.
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- Update： 2020-07-14