Cooperatives Bank Taipei Branch Employee Theft Incident: Violation of Banking Act and Internal Control Regulations

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Regarding the deficiencies involved in the theft of funds during the external collection process by an employee of the Taipei University Hospital Branch of Cooperatives Commercial Bank, it is determined that the Banking Act Article 45-1, Paragraph 1 and the "Implementation Measures for Internal Control and Audit Systems of Financial Holding Companies and Banks" Articles 3, Paragraph 1, 8, Paragraph 1, and 3, Paragraph 3 were violated. Pursuant to Article 129, Paragraph 7 of the Banking Act, a fine of New Taiwan Dollars (hereinafter the same) 6,000,000 is imposed.

2025-12-18

Financial Supervisory Commission Penalty Decision

Addressee: As listed on the original and copy Date of Issue: December 18, 2025 (Republic of China Year 114) Document Number: Jin Guan Yin Kong Zi No. 11401442772 Respondent: Cooperatives Commercial Bank Co., Ltd. Unified Business Number: 70799128 Address: No. 225, Section 2, Chang'an East Road, Songshan District, Taipei City Representative or Manager: Lin OO Address: Same as above

Subject: Regarding the deficiencies involved in the theft of funds during the external collection process by an employee of your bank's Taipei University Hospital Branch, it is determined that the Banking Act Article 45-1, Paragraph 1 and the "Implementation Measures for Internal Control and Audit Systems of Financial Holding Companies and Banks" Articles 3, Paragraph 1, 8, Paragraph 1, and 3, Paragraph 3 were violated. Pursuant to Article 129, Paragraph 7 of the Banking Act, a fine of New Taiwan Dollars (hereinafter the same) 6,000,000 is imposed.

Facts: Your bank's employee, Yin OO (hereinafter referred to as Employee Yin), executed external cash collection duties from July 1, 2022 (Republic of China Year 111) to May 29, 2025 (Republic of China Year 114), without complying with your bank's regulations requiring at least two employees to perform the task jointly. Additionally, a lockable cash box was not used, resulting in the theft of cash during the transportation process. Furthermore, after Employee Yin completed the external collection, another employee did not accompany them; instead, they only confirmed that the external collection funds had been deposited into the account, stamped the paper-based "Fund Transportation Record Book - For External Collection and Payment at Business Premises," and had the responsible personnel count and record the transaction.

Reasons and Legal Basis:

1. Banking Act Article 45-1, Paragraph 1 and the "Implementation Measures for Internal Control and Audit Systems of Financial Holding Companies and Banks" Articles 3, Paragraph 1, 8, Paragraph 1, and 3, Paragraph 3 stipulate that banks must establish internal control systems. Additionally, pursuant to Article 129, Paragraph 7 of the same Act, banks that fail to establish internal control systems pursuant to Article 45-1 or fail to execute them properly shall be fined between NT$2,000,000 and NT$50,000,000.

2. Upon review, your bank has the following deficiencies in failing to properly establish and execute internal control systems:

(1) Failure to properly establish internal control systems:

1. Failure to establish a reconciliation mechanism for external collection and payment operations: Your bank's work rules stipulate that if employees need to go out for official business after signing in, they must apply for leave in the personnel attendance management system. However, for situations requiring two or more employees to travel together for external collection and payment of funds, the current system cannot reconcile or conduct post-event verification for single-person outings, resulting in imperfect control mechanisms.
2. Failure to establish an appropriate internal audit mechanism: Your bank's auditors primarily checked external collection and payment operations by reviewing whether the record books and external collection lists complied with regulations in writing. No other auxiliary verification mechanisms were established, allowing employees to retroactively complete written approvals to cover up actual operational deficiencies.

(2) Failure to properly execute internal control systems:

1. Failure to properly execute regulations for external collection and payment at business premises: Your bank's internal regulations clearly state that cash transportation exceeding NT$300,000 must be handled by at least two employees jointly, using a lockable cash box, and that cash must never be left unattended during transport. In this case, Employee Yin went out alone to collect funds, leaving the cash unattended during transport. A lockable cash box was not used, and the cash bag was placed on a chair at the office entrance, leading to the theft of the cash bag by criminals.

2. Employees failed to properly execute external departure registration: Your bank's internal regulations stipulate that employees must apply for official leave in the personnel attendance management system after signing in and obtain approval before leaving the bank. In this case, Employee Yin went to the designated location to collect funds without processing official leave procedures. The branch failed to properly manage personnel attendance for external trips, resulting in Employee Yin going out alone to collect and pay funds, which were subsequently stolen.

3. Failure to implement the verification mechanism for the Fund Transportation Record Book and external collection lists: Your bank reviews whether external collection personnel have properly recorded transactions and whether branch assistant manager-level personnel have contacted external collection clients regarding transactions as required, using the Fund Transportation Record Book and external collection lists. The branch completed the paper trail for the "Fund Transportation Record Book." However, the reviewing personnel failed to discover that the stamps on the Fund Transportation Record Book and external collection lists by Employee Yin (who went out for collection) and another employee (who did not actually go out) for review did not match the actual situation, failing to verify this properly.

4. The aforementioned deficiencies indicate that your bank failed to properly establish and execute internal control systems, violating the Banking Act Article 45-1, Paragraph 1 and the "Implementation Measures for Internal Control and Audit Systems of Financial Holding Companies and Banks" Articles 3, Paragraph 1, 8, Paragraph 1, and 3, Paragraph 3. Therefore, pursuant to Article 129, Paragraph 7 of the Banking Act, a fine of NT$6,000,000 is imposed.

Payment Method:

1. Payment Deadline: Payment must be made within 10 days from the day following the service of this decision.
2. Please follow the instructions on the payment slip attached by the Banking Bureau of this Commission.

Important Notes:

1. If the respondent disagrees with this decision, they must file an administrative appeal with the Executive Yuan through this Commission (18th Floor, No. 7, Section 2, Xianmin Avenue, Banqiao District, New Taipei City) within 30 days from the day following the service of this decision, pursuant to Article 58, Paragraph 1 of the Administrative Appeal Act. However, pursuant to Article 93, Paragraph 1 of the Administrative Appeal Act, unless otherwise provided by law, filing an administrative appeal does not suspend the execution of this decision. The respondent must still pay the fine.
2. If the respondent fails to pay the fine within the payment deadline specified in this decision, the case will be transferred to the various branches of the Administrative Enforcement Agency of the Ministry of Justice for administrative enforcement, pursuant to the proviso of Article 4, Paragraph 1 of the Administrative Enforcement Act.

Original: Cooperatives Commercial Bank Co., Ltd. (Representative: Mr. Lin OO) Copy: Cooperatives Financial Holding Co., Ltd. (Representative: Mr. Lin OO), Central Bank, Central Deposit Insurance Corporation (Representative: Mr. Huang OO), this Commission's Inspection Bureau, Banking Bureau

Update Date: 2025-12-19

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