When handling real estate loan business, Hwatai Bank was found to have shortcomings including failure to properly conduct credit checking and lending operations, failure to establish a sound post-loan management mechanism, abnormal exchange of funds between bank lending personnel and customers receiving loans, and failure of branch managers to fulfil their responsibilities in terms of checking and supervising the sharp rise in Non-Performing Loans Ratio and the shortcomings in credit checking and lending operations, failure by the head office to have an effective balancing mechanism in place and failure of internal auditing to fulfil the functions it should have. In violation of Paragraph 1, Article 45-1 of the Banking Act, Hwatai Bank was fined NT$3 million under Subparagraph 7, Article 129 of the same Act.