TAIPEI (TVBS News) — The Ministry of Finance (MOF, 財政部) denied issuing "loan restrictions" orders to state-owned banks on Wednesday (Aug. 21), emphasizing its cooperation with the Central Bank (中央銀行) and the Financial Supervisory Commission (金管會) to supervise these institutions.
The ministry's statement followed media reports suggesting that the real estate market's surge had pushed several banks close to the warning level on real estate loans set by "The Banking Act of The Republic of China" (銀行法).
According to Article 72-2 of the Banking Act, "the total amount of loans extended for residential construction and construction for business purposes by a Commercial Bank shall not exceed thirty percent (30%) of the aggregate of such Commercial Bank's deposits and Bank Debentures issued at the time such loans is extended."
The Financial Supervisory Commission sent questionnaires to banks, asking if loan conditions had tightened and if there was still capacity for new loans. A bank official confirmed receiving these inquiries.
A bank executive admitted that while there were no explicit loan restrictions, banks were indeed controlling mortgage volumes. The executive noted, "The current situation is akin to 'running out of bullets,' meaning there's almost no capacity left for new loans."
The official expressed concern about potential disputes between consumers and developers if banks couldn't process bulk mortgage applications for new housing units.
State-owned bank officials mentioned that internal quotas would ensure smooth disbursement for already approved loans. However, new applicants might face delays due to regulatory constraints.
The MOF's denial and the ongoing scrutiny by the Financial Supervisory Commission highlight the delicate balance banks must maintain amid a booming real estate market. Stakeholders should monitor how these developments unfold, especially regarding new mortgage approvals and potential market impacts.