Directions for Allocation and Operations of Emergency Home Reconstruction Loan Funds for Victims of the 921 Earthquake

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Title：

Directions for Allocation and Operations of Emergency Home Reconstruction Loan Funds for Victims of the 921 Earthquake

Inactive Regulations

Announced Date： October 01, 1999

Amended Date： February 02, 2005

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(Basis of prescription)

1 These Directions are prescribed by the Central Bank of the Republic of China (Taiwan)(hereinafter referred to as "the Bank") to implement the provisions of Decree 2 of the Emergency Decree pomulgated by the President of Republic on September 25,1999.

(Purpose, source, and limit of funds allocation)

2 The Bank will allocate the sum of NT$100 billion from postal savings system redeposits and other redeposits for banks to offer long-term low-interest and interest-free financing (hereinafter, the "Financing") to victims of the "921 Earthquake" [of September 21, 1999 ] to purchase a new home or rebuild or repair their residence to speed the process of home reconstruction and reduce the financial burdens of victims.

(Underwriting banks)

3 The underwriting banks for the Financing are listed in attached Table 1.

(Terms of lending)

4 The terms and conditions for underwriting banks granting loans from the Funds are as follows:

(1) Borrower eligibility: Households who were victims of the 921 earthquake and the destruction of whose self-owned homes has been surveyed and verified by the bank.Within victim households, the actual homeowner, the homeowner's spouse, or a lineal blood relative may apply for the loan to rebuild the home destroyed by the earthquake.

(2) Application acceptance period: from September 25, 1999 to September 24, 2000. In the event a portion of the Financing funds remain following the expiration of the application period, applications may continue to be accepted within the scope of such remainder. Such applications, however, may not be accepted beyond February 4, 2006.

(3) Loan limits, interest rates:

i.New home and home reconstruction loans are limited to a maximum of NT$3.5 million per household. Loans of up to NT$1.5 million are interest-free. The portion of a loan in excess of NT$1.5 million shall be subject to a fixed annual interest rate of 3 percent. For home repair loans, each household may borrow a maximumn of NT$1.5 million at a fixed annual interest rate of 3 percent.

ii.The fixed annual interest rate for the portion of new home and home reconstruction loans exceeding NT$1.5million shall be lowered to 2 percent from 3 percent beginning March 1, 2003. The fixed annual interest rate for home repair loans shall be lowered to 2 percent from 3 percent beginning November 1, 2003. The interest rate quoted herein is to be adjusted automatically to 3 percent when the one-year floating savings rate of the Directorate General of postal Remittances and Savings Banks reclines to 5.35 percent.

(4) Loan period and method of repayment: Loans are for a maximum term of 20 years. Repayment shall be made in equal installments of the principal and the interest for the full term of the loan beginning from the fourth year.

(Deadline for banks to apply to the Bank for fund allocation)

5 Underwriting banks may apply to the Bank for disbursement of the Financing during the period from September 25, 1999 to October 24, 2001. In the event a portion of the Financing funds set forth in Point 2 remain following the deadline, disbursement applications may continue to be made within the scope of such remainder. Such applications may not be made beyond March 4, 2006, however, the deadline shall not be applied to those reconstruction projects which are imcomplete at that time and have been certified by their underwriting banks.

(Cost for banks underwriting loans)

6 The interest rate charged underwriting banks by the Directorate General of Postal Remittances and Savings Banks on allocations of the Funds shall be set and adjusted in accordance with the floating interest rate on one-year postal time deposits (currently 5.35 percent per annum). The difference between the interest rate charged underwriting banks and the loan interest rates for the Financing shall be borne by the Bank.

(Underwriting handling charges)

7 Handling charges for banks underwriting loans from the Funds shall be calculated at one percent of the annual interest rate on the underwritten principal and shall be borne by the Bank.

(Allocation screening process)

8 Upon granting a loan, the underwriting bank shall fill out the Loan Details form in Attachment 2 and submit it to the Bank in application for allocation approval. The Bank will then remit the specified amount from the postal savings system redeposit funds into the Directorate General of Postal Remittances and Savings Banks' reserve account with the Banking Department of the Bank. The Directorate General of Postal Remittances and Savings Banks will then redeposit the Funds with the underwriting bank.

(Follow-up audits)

9 Underwriting banks shall conduct applications for Financing loans in accordance with these Directions. Loans shall be subject to examination by the Bank Examination Department. Where examination reveals non-compliance with regulations, the Bank may recall the amount of the improper loan and the underwriting bank shall be solely responsible for raising the funds.

(Combining with other loans)

10 Each type of loan from these Funds may be used in conjunction with other government-policy loans.

(Notification of client repayment of principal)

11 The underwriting bank, after undertaking the underwriting of loans from the Funds, shall submit to the Directorate General of Postal Remittances and Savings Banks and the Bank's Banking Department monthly notifications of the amount the client has repaid.

(Conduct of loans by grassroots financial institutions)

12 The Bank may allocate agricultural banks redeposits to the credit departments of farmers associations or credit cooperatives to provide Financing loans in accordance with these Directions. Guidelines for such operations shall be prescribed by the Farmers Bank of China, in conjunction with the Taiwan Cooperative Bank and the Land Bank of Taiwan, and shall take force after submission to and approval by the Bank.