Lawmakers rebuke $323m capital requirement for Taiwan's web-only banks

They argue that Japan, South Korea, and Hong Kong have much lower capital requirements.

Taiwan lawmakers have denounced the NT$10b ($323.35m) capital requirement for web-only banks at a recent Finance Committee meeting, saying that neighboring countries have set lower capital requirements: ￥2b ($17.64m) in Japan, ₩50b ($43.95m) in South Korea, and HK$300m ($38.31m) in Hong Kong, reports the Taipei Times.

Also read: Can South Korea's web-only banks break out of beginner's rut to ensure sustainability?

Taiwan's Financial Services Commission (FSC) revealed in April that web-only banks are required to have a minimum capital of NT$10b ($323.35m) which is similar to that of traditional banks.

Democratic Progressive Party legislator Yu Wan-ju urged FSC to reduce the capital requirements for web-only banks in Taiwan would have a hard time raising that amount of capital and at the same time make a profit.

FSC chairman Wellington Koo had said that the commission has no plans of cutting down the requirement as raising NT$10b ($323.35m) "would not be a problem" for firms that want to set up web-only banks. He added that because of the same compliance regulations, web-only banks would cost as much as conventional banks.

Moreover, Koo said that there is consideration to apply for a lower capital requirement for a new kind of traditional bank if it does not accept deposits. The FSC is also considering a new banking licence for tech companies that will succeed in conducting financial experiments within the government's regulatory sandbox.