Regulatory Alerts2005-12-12
Added · Updated
Directions for Handling Legally Required Reserves against Re-deposited Deposits of Grassroots Financial Institutions
Grassroots Financial Institutions, including credit cooperatives and credit departments of farmers' or fishermen's associations, are exempt from setting aside legally required reserves for re-deposited funds if those funds are placed with designated banks under specific terms. Credit cooperatives must deposit funds with Taiwan Cooperative Bank to claim exemption, while credit departments of farmers' or fishermen's associations must meet deposit term, interest rate, and amount limit requirements when using Agricultural Banks. Institutions failing to submit required calculation reports are deemed to have no exempt funds and must set aside reserves themselves. If reported data is inconsistent, the Trustee Institution adjusts based on the Grassroots Financial Institution's report and charges penalty interest at one and a half times the short-term accommodation interest rate for any resulting shortfall.
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