FSC to limit domestic bank branches to less than 3,500
Taiwan News, Staff Writer
2014-07-09 11:03 AM

In response to the advent of the digital finance era, the Financial Supervisory Commission (FSC) stated Tuesday, it will control the total number of domestic bank branches to within 3,500 and will discourage the large-scale expansion of branches.

However, credit cooperatives wishing to add branches or banks planning to add branches remote areas lacking financial services will not be restricted by his branch quota mechanism.

FSC Banking Bureau Deputy Director General Jean Chiu stated, in order to avoid excessive competition between banks impacting the market, there must be an “ebb and flow” to domestic bank branches. Only after branches have been abolished will new branches be approved.

Chiu further noted, currently domestic bank branches total 3,482 locations and will maintain at this scale in the future without significant increases. This year King’s Town Bank, Taishin Bank, CTBC Bank, EnTie Bank, and Cosmos Bank applied for branch licenses for an additional 10 branches. Last year, Taiwan Cooperative Bank and Citibank only abolished 6 branches. Therefore the Banking Bureau only had a “quota” of 5 branch approvals this year. The aforementioned 5 banks were only approved to add one branch each.

In order to deal with troubled financial institutions in 2004, the FSC halted the establishment of new domestic bank branches. After three years, financially and operationally sound domestic banks were allowed to again establish new branches in 2007.

Bankers stated, the FSC’s decision to control the number of branch locations is equivalent to another freeze on the issuance of branch licenses. However, with the current ubiquity of electronic and internet banking, the potential damage caused by this freeze is greatly lessened.

FSC statistics show, currently there are a total of 3,482 domestic bank branches, 39 foreign bank branches, and 281 credit cooperatives. This year, 10 credit cooperatives applied for 14 branches. The FSC approved 3.

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