Banks' China applications may take weeks
Lo Ming-tsai, convener of the legislative finance committee, said that the Financial Supervisory Commission (FSC) needed to submit a proposal for review by the Legislative Yuan before local financial institutions submit their applications to the commission.
Lo said that the proposal had to be passed by the Legislative Yuan's procedure committee first and then sent to the finance committee for review. “It will be another two to three weeks at the earliest,” he said.
It was previously expected that the FSC would accept applications by domestic financial institutions yesterday at the earliest — after the FSC attended the legislative finance committee's meeting the same day.
Bank of Taiwan Chairwoman Susan Chang said that the process would be less controversial if all lawmaking procedures are done according to rules.
“We have been waiting for seven to eight years, so it will not make much difference if we need to wait for another couple weeks or a month,” Chang said.
Meanwhile, FSC Chairman Sean Chen said that the “early harvest” program for the financial industry under the proposed economic cooperation framework agreement (ECFA) will be announced at the end of April.
Chen said the FSC would seek the best deal under the trade pact with China — such as allowing local banks to do business using the Chinese yuan.
According to regulations promulgated by the FSC March 16 with immediate effect, Taiwanese banks, insurance companies and securities firms can have a presence in China using two of three options: setting up representative offices, opening branches or subsidiaries, or holding a stake in a Chinese bank or firm.
If their applications to set up operations are approved by the FSC, domestic banks and financial holding companies will also be required to file applications with Chinese authorities, which will notify the FSC if the applications are approved, FSC officials said.
At this stage, five state banks are eligible to have their offices on the other side of the strait upgraded into branches, said Lee Sush-der, finance minister, yesterday.
According to Lee, who attended the Legislative session yesterday, there are eight banks in which his ministry has a stake: Bank of Taiwan, Land Bank of Taiwan, First Financial Holding, Hua Nan Financial Holding, Mega Financial Holding, Taiwan Cooperative Bank, Taiwan Business Bank and Changhua Bank.
All of them, except Taiwan Business Bank, have set up offices in China.
Five of the seven, namely Land Bank of Taiwan, Hua Nan, First Financial, Taiwan Cooperative Bank and Chang Hua, can have their offices upgraded to branches, Lee said. Bank of Taiwan and Mega are not eligible, as their Chinese offices have not been in operation for two years.
The office of a Taiwan bank in China must be in operation for two years before it can be upgraded into a branch.
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