03.28.2001
Bankers Association agrees to extension of loan maturity

• A Bankers' Association committee reached an agreement yesterday to allow all operating enterprises that repay interest on a regular basis to have loan maturity deadlines extended for six months. Presently, many of such enterprises face deadlines that will fall due in April or May 2001. The approval will be decided on a case by case basis.

• The Association also passed a resolution that will permit unemployed people to repay mortgage debt six months later. This is with the proviso that the applicant shows proof that they are not intentionally unemployed. The resolution applies to mortgages smaller than NT$6m.

• Mr Lee Yung-San, head of the Bankers' Association, said that banks have mostly shown no objection to the loan maturity scheme; we believe that this is because these banks have few alternatives in dealing with their distressed borrowers. We further believe that the extension of loan maturity is only a temporary solution that merely pushes back resolution of the fundamental problem banks face, the inability of borrowers to service debt. We remain concerned about what will happen once the six-month extension period ends.

WilliamFong@Primasia.com +886-[0]2-2547-8864