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  • Interpretation
  • No.293
  • Date
  • 1992/03/13
  • Issue
    • 1) Is the confidential requirement under Article 48, Paragraph 2, of the Banking Act applicable to the request for customer information made by the legislature to review the budgets and final accounts of state-owned banks?
    • 2) If so, may the request of the legislature be made without any condition?
  • Holding
    •        Article 48, Paragraph 2, of the Banking Act stipulates: “Unless other laws or regulations promulgated by the central governing authority indicate otherwise, banks shall keep their customers’ information regarding deposits, loans and remittances in strictest confidence.”  This provision was enacted to protect bank customers’ confidential information on their individual properties and to prevent banks from freely and unilaterally disclosing such information, with a view to protect the people’s right of privacy.  However, there is a distinction to be drawn between state-owned banks and their private counterparts.  State-owned banks’ budgets and final accounts are by law subject to the legislature’s review.  Due to the necessity of review, for the state-owned banks’ non-performing loans excluding those debts, either listed as bad debts or debts with no possibility of collection, which shall be handled pursuant to current rules and regulations, the legislature may, by way of a resolution, require state-owned banks to provide related information under the conditions of banks’ nondisclosure of individual customers’ names and the legislature’s nondisclosure of such information, when the legislature has a reasonable ground to believe that state-owned banks’ non-performing loans were made improperly.  In order to balance the people’s right of privacy and the legislature’s supervision of state-owned banks, when the legislature makes such a resolution and request, state-owned banks shall furnish pertinent information.
      
  • Reasoning
    •        Article 48, Paragraph 2, of the Banking Act stipulates: “Unless other laws or regulations promulgated by the central governing authority indicate otherwise, banks shall keep their customers’ information regarding deposits, loans and remittances in strictest confidence.”  This provision was enacted and amended on July 17, 1989, to protect bank customers’ confidential information on their individual properties and to prevent banks from freely and unilaterally disclosing such information, with a view to protect the people’s right of privacy.  According to directives issued by the Ministry of Finance, the central governing authority, such a confidential requirement is inapplicable to the requests made by government agencies and authorities in charge of control, judicature, police, and taxation for their necessary investigations and verifications.  With respect to requests for furnishing related information made by the legislature, Ministry of Finance Directive Tai-Tsai-Jon-Tze No. 790189485 of July 18, 1990, Explanation 2, specifies: “When the Legislative Yuan and other local councils hold confidential sessions, information to be furnished by state-owned banks is still limited to: (a) the total number of non-performing loans and accounts receivable overdue verified and booked in accounts; (b) individual customers’ debt with no possibility of collection after the conclusion of litigation; and (c) account information on bad debts which have been reported to the auditing department and yet been approved to be written off.”  Though this Directive was issued with a view to the banking business, state-owned banks’ budgets and final accounts are by law subject to the legislature’s review.  Due to the necessity of review, for the state-owned banks’ non-performing loans (including those non-performing loans, accounts receivable overdue, and bad debts as so defined by the Rules Governing Matters of State-owned Banks’ Non-performing Loans, Accounts Receivable Overdue and Bad Debts of January 10, 1986) excluding those debts, either listed as bad debts or debts with no possibility of collection, which shall be handled pursuant to current rules and regulations, the legislature may, by way of a resolution, require state-owned banks to provide related information under the conditions of banks’ nondisclosure of individual customers’ names and the legislature’s nondisclosure of such information, when the legislature has a reasonable ground to believe that state-owned banks’ non-performing loans were made improperly.  In order to balance the people’s right of privacy and the legislature’s supervision of state-owned banks, when the legislature makes such a resolution and request, state-owned banks shall furnish the pertinent information.
      
    • *Translated by Professor Chun-Jen Chen.
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