Taiwan FSC Sets Up Panel to Review Internet-only Bank Applications

The new panel will assess formal applications for internet-only bank licences. Chunghwa Telecom, Waterland Financial and Line Financial are each seeking licences.

Taiwan’s FSC (Financial Supervisory Commission) has announced the establishment of a panel to review internet-only bank licence applications, according to local media reports.

The panel will comprise five commissioners and four independent experts who will be picked based on strict qualification requirements. Selected panellists will be barred from working for the banks that win internet-only licences for two years.

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Three groups – led by Chunghwa Telecom, Waterland Financial Holdings and Line Financial Taiwan – have expressed interest so far in obtaining an internet-only bank licence.

  • The Chunghwa Telecom group seeks to establish Next Bank, an internet-only bank that will take deposits, provide loans, sell insurance policies, promote mobile transfers and offer wealth management services. Chunghwa will hold a 41.9 percent stake. Mega International will be the second-largest shareholder with a 25.1 percent stake.
  • Taiwan’s Waterland Financial plans to invest up to USD 159 million for a 40 percent stake in a new internet-only bank, with Japanese e-commerce firm Rakuten Inc holding the majority 51 percent in the new bank.
  • Line Financial Taiwan in November said it would hold a majority 49.9 percent stake in its planned internet-only bank providing payments, money transfers, loans, and money management and insurance services. Four different financial institutions – Taipei Fubon Bank, CTBC Bank, Standard Chartered Bank Taiwan and Union Bank of Taiwan – will hold a collective 40.1 percent stake.

Issuing internet-only bank licences is the FSC’s response to the developing trend of offering digital services for banks. It will increase competition in the sector and better address current consumer needs, the regulator said in a statement.

According to reports, the deadline for applications to be made is 15 February. The review of applications will be based on “fairness and impartiality” and the approval will be released by the end of June this year, the FSC said.

 

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