Taiwan's Chunghwa Post Refuses Corporate Deposits

Taipei, March 13, 2009 (CENS)--The global financial upheaval has forced more and more investors to avoid financial products, instead putting their money in banks, resulting in Taiwan's financial institutions awash in idle funds.

With banks in Taiwan offering near-zero interest on deposits, banks are looking for other places to park their cash for higher yields. But the state-run Chunghwa Post Co., Ltd. recently decided to accept only individual deposits and turn down corporate ones. The company reportedly just rejected a huge sum of NT$30 billion (US$909.09 million at US$1 = NT$33) to be deposited by a leading high-tech firm.

Chunghwa Post witnesses its outstanding deposits reach NT$4.6 trillion (US$139.39 billion), the highest among Taiwan's financial institutions. Currently the interest rate of general deposits offered by banks here is below 1% per annum and the one-month interest rate of large deposits over NT$3 million (US$90,909) is a mere 0.1%. However, the one-month fixed interest rate for deposits offered by Chunghwa Post is 0.29%, much higher than that of banks.

Not allowed to lend, Chunghwa Post puts most of its deposits in banks, with the central bank taking about NT$1.58 trillion (US$47.88 billion) from the post office. Besides, Chunghwa has also spent more than NT$600 billion (US$18.18 billion) to purchase the certificates of deposit issued by the central bank.