Taiwan to cap banks' credit ceiling to cos based on China investment: report

TAIPEI (AFX-ASIA) - The Mainland Affairs Council, the Ministry of Finance, and the central bank are considering creating a mechanism that will determine the credit ceiling banks grant to enterprises based on the amount of their investment in China, the Commercial Times reported, without citing its source. Any single Taiwan company with combined China investments below 50 mln usd will be allowed to remit capital outward via letters of credit issued by banks at an amount up to 50 pct of the company's China investments, the report said. The ceiling for the letter of credit will be capped at 25 pct for those companies with China investments of 50-100 mln usd, and at 10 pct for those with mainland investments above 100 mln usd, it added. The government has ordered banks to respond to the planned mechanism, it said.

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