Financial Supervisory Commission Penalty Against Taishin International Commercial Bank for Internal Control Failures and Misappropriation

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Taishin International Commercial Bank, Xindian Branch, former financial advisor (hereinafter referred to as "Financial Advisor") Mr./Ms. Zhang, is suspected of misappropriating client funds. This constitutes a violation of Article 45-1, Paragraph 1 of the Banking Act, Articles 3(1), 8(1), and 8(3) of the "Implementation Measures for Internal Control and Audit Systems of Financial Holding Companies and Banks" (hereinafter referred to as the "Internal Control and Audit Measures") in effect at the time, and poses a risk to sound operations. Pursuant to Article 129, Item 7 of the Banking Act, a fine of New Taiwan Dollars (hereinafter the same) 14,000,000 is imposed. Additionally, pursuant to Article 61-1, Paragraph 1 of the same Act, a correction is ordered. Furthermore, pursuant to Item 2 of the same paragraph, the bank is ordered to suspend accepting new clients for financial products and services applicable to high-net-worth clients, and suspending pilot business for new clients in the Kaohsiung Asset Management Zone, for one month starting from the day after the service of this decision. The bank may resume such business only after the Commission approves the improvement measures.

2026-05-28

Financial Supervisory Commission Decision Document

Addressee: As listed on the original and copies Date of Issue: May 28, 2026 (Republic of China Year 115) Document Number: Jin Guan Yin Kong Zi No. 11502029912 Respondent: Taishin International Commercial Bank Co., Ltd. Unified Business Number: 86519539 Address: 1st Floor and Basement 1, No. 44, Section 2, Zhongshan North Road, Zhongshan District, Taipei City Representative or Manager Name: Wu [Redacted] Address: Same as above

Subject: Taishin International Commercial Bank, Xindian Branch, former financial advisor (hereinafter referred to as "Financial Advisor") Mr./Ms. Zhang, is suspected of misappropriating client funds. This constitutes a violation of Article 45-1, Paragraph 1 of the Banking Act, Articles 3(1), 8(1), and 8(3) of the "Implementation Measures for Internal Control and Audit Systems of Financial Holding Companies and Banks" (hereinafter referred to as the "Internal Control and Audit Measures") in effect at the time, and poses a risk to sound operations. Pursuant to Article 129, Item 7 of the Banking Act, a fine of New Taiwan Dollars (hereinafter the same) 14,000,000 is imposed. Additionally, pursuant to Article 61-1, Paragraph 1 of the same Act, a correction is ordered. Furthermore, pursuant to Item 2 of the same paragraph, the bank is ordered to suspend accepting new clients for financial products and services applicable to high-net-worth clients, and suspending pilot business for new clients in the Kaohsiung Asset Management Zone, for one month starting from the day after the service of this decision. The bank may resume such business only after the Commission approves the improvement measures.

Facts: During a general business inspection conducted by the Commission from February 25 to March 28, 2025 (Republic of China Year 114), it was discovered that the bank had previously known that the former financial advisor of the Xindian Branch, Mr./Ms. Zhang, was involved in misappropriating client funds from December 2021 (Republic of China Year 110) to October 2023 (Republic of China Year 112). Two clients were affected, both elderly individuals, involving an amount of approximately NT$1,570,000. However, the bank decided not to report this as a major sporadic event on January 22, 2024 (Republic of China Year 113), and March 11, 2024 (Republic of China Year 114). Additionally, in handling the above case, the bank failed to properly conduct asset verification with clients, failed to thoroughly understand the causes of the financial advisor's misconduct, and failed to study and implement strengthened control measures. These deficiencies indicate that the bank failed to establish and execute internal control systems properly, posing a risk to sound operations.

Reasons and Legal Basis:

1. Legal Basis: According to Article 45-1, Paragraph 1 of the Banking Act and Articles 3(1), 8(1), and 8(3) of the Internal Control and Audit Measures in effect at the time, banks must establish internal control systems. Furthermore, pursuant to Article 129, Item 7 of the Banking Act, banks that fail to establish internal control systems in accordance with Article 45-1 or fail to execute them properly shall be fined between NT$2,000,000 and NT$50,000,000. Additionally, pursuant to Article 61-1, Paragraph 1 of the same Act, when a bank violates laws, regulations, or articles of association, or poses a risk to sound operations, the competent authority may, in addition to ordering a correction and requiring improvement within a specified period, take other necessary measures based on the severity of the circumstances, such as suspending part of the bank's business, ordering the dismissal of managers or staff, etc.

2. The bank has the following deficiencies:

(1) Failure to properly establish internal control systems:

1. Failure to properly establish an ATM abnormal transaction detection mechanism: It was found that Mr./Ms. Zhang handed over stolen client debit cards to third parties, who densely withdrew client account funds from the bank's Jingmei Branch ATM between midnight on October 27 and 00:00 on October 28, 2023 (Republic of China Year 112), and between midnight on October 30 and 00:00 on October 31, 2023. These withdrawals matched the pattern of abnormal withdrawals. However, the bank's system failed to identify and detect these abnormal transactions to take appropriate measures, indicating a failure to properly establish an ATM abnormal transaction detection mechanism.

2. Failure to properly establish control mechanisms for financial advisors conducting transactions with clients in consultation rooms: The bank's control mechanisms for financial advisor consultation rooms were incomplete and lacked sampling verification mechanisms. Consequently, Mr./Ms. Zhang took advantage of clients receiving new debit cards and password letters, bringing clients into the consultation room and exploiting their trust to steal new debit cards and photograph passwords. The bank could not prevent this beforehand nor detect the violation afterwards.

3. Failure to properly establish a confirmation mechanism for financial advisors conducting transactions on behalf of clients: The bank failed to properly establish a confirmation mechanism for transactions submitted by financial advisors on behalf of clients. This resulted in instances where clients handed cash to Mr./Ms. Zhang to purchase insurance policies, but Mr./Ms. Zhang did not actually credit the funds nor establish the insurance contracts.

(2) Failure to properly execute internal control systems:

1. Failure to properly execute the major sporadic event reporting mechanism:

(1) The bank's "Major Sporadic Event Handling Guidelines," drafted with reference to the Commission's "Scope, Reporting Procedures, and Other Matters for Financial Institutions Reporting Major Sporadic Events," stipulate that the scope of major events is primarily determined by estimated losses exceeding NT$10,000,000 or equivalent foreign currency. However, loss amount is not the absolute criterion. Non-quantitative events that do not cause financial loss but affect reputation, endanger normal operations, or disrupt financial order are also included.

(2) The bank evaluated multiple times that although the case involved types listed in the regulations such as "robbery of client deposits" or "misappropriation of client funds," it decided not to report it as a major sporadic event because the loss amount did not reach the internal guideline of NT$10,000,000, there was no concrete evidence that Mr./Ms. Zhang stole client funds, or Mr./Ms. Zhang had settled with the clients, resulting in no loss to the clients or the bank. This constitutes a failure to properly execute the Commission's aforementioned regulations.

2. Failure to properly supervise employees' adherence to codes of conduct and operational guidelines: The bank's "Employee Code of Conduct" and "Branch Channel Financial Product or Service Operational Guidelines" strictly prohibit unauthorized transactions on behalf of clients or private misappropriation of client funds. They also strictly prohibit privately retaining or safeguarding client passbooks, passwords (slips), and chip cards, and prohibit improper duplication of client data. However, it was found that Mr./Ms. Zhang improperly obtained client debit cards, swapped old cards for new ones while clients applied for reissuance and online banking setup, stole new debit cards, and photographed passwords for debit cards and online banking. Mr./Ms. Zhang logged into online banking without client consent to execute currency exchanges and transfers, and subsequently instructed third parties to withdraw cash from ATMs and misappropriate the funds. This indicates that the bank failed to properly supervise and manage employees' adherence to the code of conduct and operational guidelines, leading to these deficiencies.

3. Failure to properly execute the control mechanism for financial advisors'外出 (out-of-office visits): The bank's "Employee Code of Conduct" stipulates that employees must not leave their posts without proper leave or official travel applications during working hours. Employees must fill out the purpose of their visit in the out-of-office application system and obtain supervisor approval before leaving. However, it was found that Mr./Ms. Zhang did not follow the bank's regulations for out-of-office visits and visited clients without applying. Mr./Ms. Zhang conducted transactions at clients' residences without client consent. This indicates that the bank failed to properly execute the control mechanism for financial advisors' out-of-office visits.

4. Inadequate internal audit: Regarding the matter where clients handed cash to Mr./Ms. Zhang to purchase insurance policies, but Mr./Ms. Zhang did not credit the funds nor purchase the insurance, the bank claimed it could not verify relevant audio-visual records and lacked positive evidence to determine the facts. The bank failed to provide complete relevant data and could not clarify the nodes where internal control deficiencies occurred. This indicates that the bank's internal audit capabilities were insufficient.

(3) The aforementioned deficiencies indicate that the bank failed to properly establish and execute internal control systems. This constitutes a violation of Article 45-1, Paragraph 1 of the Banking Act, Articles 3(1), 8(1), and 8(3) of the Internal Control and Audit Measures in effect at the time, and poses a risk to sound operations. Therefore, pursuant to Article 129, Item 7 of the Banking Act, a fine of NT$14,000,000 is imposed. Additionally, pursuant to Article 61-1, Paragraph 1 of the same Act, a correction is ordered. Furthermore, pursuant to Item 2 of the same paragraph, the bank is ordered to suspend accepting new clients for financial products and services applicable to high-net-worth clients, and suspending pilot business for new clients in the Kaohsiung Asset Management Zone, for one month starting from the day after the service of this decision. The bank may resume such business only after the Commission approves the improvement measures.

Payment Method:

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

Notes:

1. If the respondent disagrees with this decision, they must file an appeal with the Administrative Yuan via the Commission (18th Floor, No. 7, Section 2, Xianmin Avenue, Banqiao District, New Taipei City) within 30 days from the day after the service of this decision, in accordance with 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 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 deadline specified in this decision, the case will be transferred to the various branches of the Executive Yuan's Administrative Execution Agency for administrative execution, pursuant to the proviso of Article 4, Paragraph 1 of the Administrative Execution Act.

Original: Taishin International Commercial Bank Co., Ltd. (Representative: Mr. Wu [Redacted]) Copy: Taishin Shin Kong Financial Holding Co., Ltd. (Representative: Mr. Wu [Redacted]), Central Bank, Central Deposit Insurance Corporation (Representative: Mr./Ms. Huang [Redacted]), Commission's Inspection Bureau, Banking Bureau

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Last Updated: 2026-05-29

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