Directions for Financial Institutions Applying for Allocation of Funds Under the 921 Earthquake Victim Home Reconstruction Emergency Loan Program

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Title：

Directions for Financial Institutions Applying for Allocation of Funds Under the 921 Earthquake Victim Home Reconstruction Emergency Loan Program

Amended Date： May 29, 2000

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(Purpose of prescription)

1 Financial institutions shall comply with these Directions, in addition to the provisions of the respective laws and regulations, when applying for the allocation of relevant funds pursuant to the Allocation and Operations Directions for Emergency Home Reconstruction Funds for Victims of the 921 Earthquake, Articles 53 and 54 of the Temporary Statute for 921 Earthquake Post-Disaster Reconstruction; and the Scope, Methods, and Procedures for Applications for Subsidies by Financial Institutions Assuming Disaster-Area Resident Homes and Land.

(Scope and methods of disbursement of relevant funds)

2 Where financial institutions apply for allocation of relevant funds, the funds shall be disbursed by the two methods and within the scope set forth below:

(1) Disbursement of special relief funds: The Central Bank of the Republic of China (Taiwan)(hereinafter referred to as the " Bank") will disburse special relief funds in cases where financial institutions among the total 105 institutions announced by the Bank, including 44 banks, 14 credit cooperatives and 47 farmers associations, arrange home purchase, home reconstruction or home repair loans for earthquake victim households when a balance remains pursuant to the Allocation and Operations Directions for Emergency Home Reconstruction Funds for Victims of the 921 Earthquake and Articles 53 and 54 of the Temporary Statute for 921 Earthquake Post-Disaster Reconstruction.

(2) Non-disbursement of special relief funds: Under the following circumstances, the Bank will not disburse special relief funds; disbursements will be limited only to interest relief, interest subsidies, and loan processing fees:

i Where a financial institution, under the provisions of Article 53 of the Temporary Statute for 921 Earthquake Post-Disaster Reconstruction, assumes the balance of a home purchase loan for a disaster victim whose home was damaged in the earthquake and applies for interest subsidization; and where an earthquake victim, under Article 54 of the same statute, applies for interest rate subsidies to continue payments of the principal and interest of their original home loan.

ii Where a financial institution other than the 105 financial institutions referred to in paragraph 1 above (such other institutions including Taiwan branches of foreign banks, investment trust companies, and life insurance companies [including the Postal Remittances & Savings Banks' Department of Basic Life Insurance]) applies for disbursement of loan processing fees or interest subsidies or relief when utilizing its own funds to issue home purchase, home reconstruction, or home repair loans for earthquake victim households when a balance remains pursuant to the Allocation and Operations Directions for Emergency Home Reconstruction Funds for Victims of the 921 Earthquake and Articles 53 and 54 of the Temporary Statute for 921 Earthquake Post-Disaster Reconstruction.

(Source of special relief funds)

3 The sources of special relief funds disbursed to applicant financial institutions will be as follows:

(1) Postal savings system re-deposits: Where the lending financial institution is one of the 44 banks announced by the Bank, disbursements of special relief funds shall be from Postal Remittance and Savings Bank re-deposits.

(2) Agricultural financial institution re-deposits: Where the lending financial institution is a grassroots financial institution, disbursements of special relief funds shall be from funds raised by the institution itself or from Cooperative Bank of Taiwan, Land Bank of Taiwan, or Farmers Bank of China re-deposits.

(Special relief fund allocation procedure)

4 Procedures for applications by financial institutions for allocation of relief funds are as follows:

(1) Loans handled by the 44 approved banks: After issuing the loan, the lending financial institution shall fill out the "Checklist for 921 Earthquake Victim Emergency Home Reconstruction Financing" (Attachment 1) and submit it via mail to the Bank with the application for allocation. The Bank will then remit the approved amount from postal savings system re-deposits into the Postal Remittances and Savings Banks' reserve account with the Central Bank's with the lending financial institution.

(2) Loans handled by grassroots financial institutions: Agricultural association credit departments and credit cooperatives shall issue loans in accordance with the provisions of the "Directions for Central Bank of the Republic of China (Taiwan)Disbursement of NT$15 Billion in Agricultural Banks Re-deposits for Use by Grassroots Financial Institutions in the 921 Earthquake Zone to Provide Home Purchase, Home Reconstruction, or Home Repair Loans to Earthquake Victims " and complete the "Checklist for 921 Earthquake Victim Emergency Home Reconstruction Financing" (Attachment 1) and submit it via mail to the designated agricultural financial institutions (the Farmers Bank of China - responsible for handling all agricultural association credit departments in the Nantou city and county area; the Land Bank of Taiwan - responsible for handling farmers association credit departments in Taichung city and county ; and the Cooperative Bank of Taiwan - responsible for handling all credit cooperatives and other grassroots financial institutions outside the Nantou city/county and Taichung city/county areas) for submission viamail to the Bank for final approval and record.

(3) With regard to cases handled pursuant to subparagraph 2 of Point 2 in which special relief funds are not to be disbursed and disbursements are limited to interest relief, interest subsidies, and loan processing fees, the lending financial institution shall complete, according to the category of disbursement, a "Checklist for 921 Earthquake Victim Emergency Home econstruction Financing" (Attachment 1); a "Checklist for Assumption of Earthquake Victim Homes and Appurtenant Land Damaged in the 921 Earthquake" (Attachment 2), or a "Checklist for Handling Interest Subsidies on Prior Loans on Earthquake Victim Homes and Property Damaged in the 921 Earthquake " (Attachment 3) and submit it via mail to the Bank for final approval and record.

(Approval and disbursement procedures for payment of special relief funds for loan processing fees, interest rate differentials, and advance payment on interest for the initial three years on existing loans.)

5 Procedures for application, approval, and disbursement of relevant funds to the lending financial institution for the initial three years of a loan and for the fourth through the final year of a loan in cases approved for relief fund disbursement are as follows :

(1) The initial three years of a loan:

i A lending financial institution shall, prior to the tenth day of each month, collect and submit relevant documentation (formatted as in Attachment 4) to the Bank in application for disbursement of the preceding month's loan processing fees, payment of interest rate differentials on loans, and the Bank advance interest payments on loans. Upon approval of the application, the Bank shall, on the 20th day of each month, remit the relevant funds into the lending financial institution's reserve account in the Central Bank's Banking Department.

ii A lending grassroots financial institution shall, prior to the tenth day of each month, collect and submit relevant documentation (formatted as in Attachment 5) via mail to the designated agricultural financial institution for compilation and submission, prior to the 15th day of the given month, to the Bank in application for disbursement of the preceding month's loan processing fees, payment of interest rate differentials on loans, and the Bank advance interest payments on loans. Upon approval of the application, the Bank shall, on the 20th day of each month, remit the relevant funds into the designated agricultural financial institutions' reserve accounts in the Central Bank's Banking Department, from where the funds shall be remitted into the various deposit accounts held by the grassroots financial institution in the designated agricultural financial institutions.

(2) The fourth year through the final year:

i The lending financial institution shall, prior to the tenth day of each month, collect and submit relevant documentation (formatted as in Attachment 6) to the Bank in application for disbursement of the preceding month's loan processing fees and payment of interest rate differentials on loans, less deductions in equal installments of the amount of the advance interest payments on the loans for the initial three years. Upon approval of the application, the Bank shall, on the 20th day of each month, remit the relevant funds into the lending financial institution's reserve account in the Central Bank's Department of Banking .

ii The lending grassroots financial institution shall, prior to the tenth day of each month, collect and submit relevant documentation (formatted as in Attachment 7) to the designated agricultural financial institution via mail for compilation and submission, prior to the 15th day of the given month, to the Bank in application for disbursement of the preceding month's loan processing fees and payment of interest rate differentials on loans, less deductions in equal installments of the amount of the advance interest payments on the loans for the initial three years. Upon approval of the application, theBank shall, on the 20th day of each month , remit the relevant funds into the designated agricultural financial institutions' reserve accounts in the Central Bank's Banking Department, from where the funds shall be remitted into the various deposit accounts held by the grassroots financial institution in the agricultural financial institutions.

(Approval and disbursement procedures for interest relief, interest subsidies, and loan processing fees in cases in which special relief fundsare not to be disbursed)

6 Procedures for disbursement of relevant funds for applications made in accordance with subparagraph 2 of Point 2 are as follows:

(1) For interest relief and subsidies paid under subparagraph 2-1 of Ｄ Direction 2 where a financial institution has assumed a loan or where the earthquake victim continues to pay the interest and principal, the relevant documentation shall be collected and submitted (formatted as in Attachments 8 and 9) via mail to the Bank prior to the tenth day of each month in application for disbursement of the preceding month's interest relief or subsidies. Upon approval of the application, the Bank shall, on the 20th day of each month, remit the relevant funds into the designated banks' reserve accounts with the Central Bank's Banking Department, from where the funds shall be remitted into the various deposit accounts held by the lending financial institution in the designated banks. Approval and disbursements for grassroots financial institutions shall be made in accordance with subparagraph 1-2 and subparagraph 2-2 of Direction 5.

(2) Loan processing fees and interest relief and subsidies on home purchase, home reconstruction, or home repair loans under Subparagraph 2-2 of Direction 2 shall all be handled in accordance with the provisions of Direction 5.

(The "first disburse, then review" principle)

7 The various types of fund disbursements shall handled under the principle of "first disburse, then review." However, where postdisbursement review reveals a discrepancy in the amount that should have been disbursed and the amount requested, resulting in overdisbursement, the Bank shall recover the excess amount. Where such circumstances have occurred three or more times, the Bank may switch to a pre-disbursement review process.

Where application is made under the provisions of these Directions for disbursement of loan processing fees, interest rate differential subsidies, or the advance of interest payments for the initial three years of a loan, the basis for accounting shall be the sum total of the outstanding balances for all loans granted by each lending financial institution from the first day of each month through the end of the month. The basis for accounting for interest relief shall be the total balance assumed by each lending financial institution.

(The handling of multiple loan applications; relief applications, interest payment subsidies and loan approvals that fail to comply with regulations and early repayment [of loans])

8 The following funds shall be recovered:

(1) After a lending financial institution grants loans or applies for interest payment relief or subsidies, where the Bank or other bank examination institutions discover that the borrower has filed multiple loan applications or that applications for interest payment subsidies or relief or the granting of the loan were notin compliance with regulations, the Bank shall, in addition to recovering the loan funds at issue, trace back and recover all loan processing fees, interest relief and subsidies, and the advance of interest payments for the initial three years of a borrower's loan.

(2)Where an earthquake victim repays prematurely during the loan period, the lending financial institution shall immediately notify the Bank via mail (lending grassroots financial institutions shall notify their designated agricultural financial institution,which shall then notify the Bank via mail) to reduce that institution's balance of outstanding loans, halt disbursements of loan processing fees and interest payment subsidies for the loan, and recover the advance of interest payments for the loan. (The record date for calculation of the amount of the advance of interest payments to be recovered shall be the date of premature repayment of the loan.)

With regard to the funds to be recovered referred to in the preceding paragraph, the Bank shall make said deductions on the 20th of each month at the time of disbursement of the previous month's loan processing fees, interest rate differential relief and subsidies, and threey earinterest payment pre-payments.

(Methods of calculation of the various fund disbursements)

9 The methods of calculation for loan processing fees, interest rate subsidies, the advance of interest payments for the initial three years of loans and interest payment relief on the balance of home and property loans or interest rate subsidies on the original home loans of earthquake victims shall be conducted in accordance with Attachment 10.