Taipei, March 9, 2010 (CENS)--Taiwan`s Financial Supervisory Commission (FSC) recently revised rules to raise the threshold to establish branches by financial institutions here.

The new rules stipulate that domestic and foreign financial institutions intending to set up branches must show non-performing loan (NPL) rate lower than 1.5% and NPL coverage rate over 80%, with the earlier percentages of the former being 2% and the latter 50%.

T.L. Lin, deputy director at the Bureau of Monetary Affairs, indicated that the FSC usually receives in May applications to set up financial branches. Currently 10 banks and four credit cooperatives meet the new rules.

Lin said that the FSC felt it`s time to revise the old rules since the average NPL rate at domestic banks had already reached 1.15% at the end of 2009 and the average NPL coverage rate rose as high as 90.5%, both much better than the standards set by the FSC at 2% for the former and 50% for the latter.

FSC statistics showed that in January of this year the average NPL rate of 37 domestic banks hit a record low of 1.13% and the average NPL coverage rate a record high of 91.23%, of which 34 showed NPL rate below 2.5%.

(by Judy Li)