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Important Measures

FSC urges banks to implement COVID-19 relief measures

In addition to granting relief loans to corporate borrowers as called for under the economic stimulus programs of central government agencies, the FSC is also pushing for banks to take the following measures for corporate and individual borrowers affected by COVID-19:
1.Corporate loans: The FSC is overseeing an effort by the Bankers Association of the Republic of China (BAROC) to prompt banks to step up the provision of relief loans and not turn their backs on borrowers in their hour of need. In particular, BAROC is pushing for its member institutions to defer repayment of loan principal until the end of December 2021.
2.Personal loans: Individuals who are having trouble with repayment of loans due to COVID-19 are allowed to apply for 3- to 6-month deferrals of principal or interest payments, and default penalties and default interest may be waived during the deferral period. During the period of a loan deferral or loan rescheduling, the debtor is not required to repay principal or interest. Until the obligation comes due it will not be treated as a bad debt, and an instance of late payment will not be included in the debtor''s credit record. Because the application deadline will end on 31 July 2020, the FSC coordinated with banks on 12 May 2020 to extend the debt workout mechanism for credit card debts and personal loans until 31 December 2020.
3.Faster processing of relief loan applications: Processing of applications for rescheduling of outstanding loans can in principle be completed in two weeks, while applications for new loans of NT$5 million or less can be approved within 10 working days in the case of working capital loans, or within 15 working days in the case of relief loans, and applications for new loans of NT$1 million or less can in principle be approved within 7 working days.
4.Push for banks to reflect Central Bank rate cuts in their own lending rates: In addition to lowering lending rates by 0.25 percentage points across the board, 20 private-sector banks have also followed the lead of government-owned banks by cutting lending rates by 0.5 percentage points for owner-occupied home loans to individuals affected by COVID-19, and 19 private-sector banks have cut lending rates by 0.75 percentage points for credit card debts, unsecured loans, and auto loans.
5.Principles regarding fair & reasonable fees for relief loans: On 12 May 2020, the FSC convened a meeting to explain to come up with principles regarding fair and reasonable service charges for relief loans. These principles include the following: (1) for loans of NT$10 million or less, total fees must not in principle exceed NT$10,000 regardless whether the fees are charged on a flat fee basis or as a percentage of the approved loan amount; (2) for loans of more than NT$10 million, total fees must meet the principle of proportionality regardless whether the fees are charged on a flat fee basis or as a percentage of the approved loan amount; (3) if a bank''s original fee standards were more advantageous to borrowers than the principles described above, then the bank must abide by its original fee standards.
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  • Update: 2020-06-20