In response to the impact of COVID-19 on industry, the Banking Bureau of the Financial Supervisory Commission (FSC) asked all financial institutions to support the relief measures adopted by various ministries by handling assistance measures for enterprises and individuals affected by the epidemic. Banks have been asked to use their lending expertise to make loans conveniently and quickly available, providing loans first to those who need them most, so that relief and stimulus measures will yield their intended benefits.
The Bureau has invited financial institutions to support the relief measures proposed by various ministries in accordance with the "Special Act for Prevention, Relief and Revitalization Measures for Severe Pneumonia with Novel Pathogens," including the rescheduling of existing corporate loans, provision of working capital loans and interest subsidies for stimulus loans, and provision of loan guarantees by the Small and Medium Enterprise Credit Guarantee Fund of Taiwan to assist industry in overcoming difficulties, and to help stabilize the industrial economy.
2. Relief measures
(1) Enterprises: The FSC is stepping up efforts to provide enhanced relief and stimulus measures to prevent financial institutions from withdrawing their help in times of need.
a. Not withdrawing help in times of need: If the original loan principal expires before June 30, 2021 and payments need to be rescheduled, the bank may agree to defer the loan for 6 months if the borrowing company applies for deferral.
b. Lower threshold for corporate debt workouts: In the past, a corporate debt workout procedure would only be initiated if creditors holding at least two-thirds of all creditor claims agreed to it. This threshold has now been reduced to creditors holding at least one-half of all creditor claims, and the deadline for application has been extended to the end of December 2021.
c. Guarantee conditions for the rescheduling of existing loans: In principle, banks are not to require borrowers to furnish a certificate of deposit as collateral, nor are they to require anyone other than a company's responsible person or actual person in charge to act as a guarantor.
d. Expedited handling of loan applications: Banks have been given time limits for completing the rescheduling of existing loans and provision of new loans.
(a) The rescheduling of old loans must in principle be completed within 2 weeks.
(b) New loans of less than NT$5 million: Approval must be granted within 10 business days for working capital loans and 15 business days for stimulus loans.
(c) New loans of less than NT$1 million: Approval must be granted within 7 business days.
e. The FSC promotes streamlining of small business entity loan applications: For small business entities to apply for loans of less than NT$500,000, the use of a simple credit scoring table has been proposed to simplify banks' loan approval process. For small business entities with a credit score above a certain level, the Small and Medium Enterprise Credit Guarantee Fund of Taiwan can make an immediate underwriting decision on a 100% credit guarantee with an interest rate not exceeding 1%, which will help members of the public obtain needed funds quickly. The program was launched on April 20, 2020.
a. For individuals affected by the epidemic, private-sector banks will take the initiative to assess their situation and provide them with interest rate reductions on personal loans based on rate reductions provided by public-sector banks. Private-sector banks willing to lower interest rates will announce their measures on their websites starting April 10, 2020.
b. Personal debt relief measures:
(a) For individuals affected by the epidemic, loan payments (including housing loans, car loans, and consumer loans) and credit card payments have been deferred for 3 to 6 months. During the deferral period, payment of default penalties, default interest, and revolving interest will be waived.
(b) Personal credit record: During the period of debt rescheduling or deferred payment, because the settlement period has not yet expired, there will be no record of delayed payment, so personal credit records will not be affected.
c. Service charges for relief loans provided by banks: Banks will waive their NT$300 service charge for NT$100,000 labor relief loans.
3. Measures to encourage financial institutions:
The FSC has adopted the "Program For Encouraging Domestic Banks to Expedite Processing Relief and Stimulus Loans" to encourage banks to process loan applications efficiently. The rewards -- which are granted on the basis of three types of lending performance, namely: "lending amount," "number of loans," and "efficiency" -- are granted to commend banks that perform well in these areas. Domestic banks were informed of this reward program on April 9, 2020, and have been asked to actively cooperate and formulate incentive measures for branches and employees.
Visitor： 666 Update： 2020-07-09