FSC relaxed the self-use ratio of a bank participating in urban renewal by amending the Rules for Investment in Real Estate by Commercial Banks(Taiwan)

Angela Wu

The Financial Supervisory Commission (hereinafter, the “FSC”) promulgated Articles 3 and 4, as amended, of the Rules for Investment in Real Estate by Commercial Banks (hereinafter, the “Rules”) and added Article 4-1 to the Rules, which relaxes the self-use ratio for a bank’s participation in urban renewal, via the Jin-Guan-Yin-Fa-10610001470 Directive of April 6, 2017.

The Rules before amendment stipulated that if a bank participates in urban renewal via old real estate, the self-use condition shall be that at least 50% of the new real estate should be obtained as a result of the reconstruction of the original real estate in the original site. Article 4-1 is added to the Rules to stipulate that if a bank participates, via its original real estate, in reconstruction implemented pursuant to relevant laws for the reconstruction of dangerous and old urban buildings such as the Statute for Urban Renewal, the self-use ratio for real estate reconstruction will be relaxed, and the new real estate so obtained only needs to account for at least 20%.

In addition, the Rules revised the previous requirement that the “short-term” self-use needs for a bank to purchase non-self-use real estate under Article 75, Paragraph 2 of the Banking Law shall be defined by a period not exceeding two years at the longest. In view of practical operation needs, however, Article 3 of the Rules is revised so that such period for a bank’s own construction in its purchased lands is extended to seven years.