Scandal Over Land Office Payments to Bank Staff: FSC Conducts Financial Inspections on 15 Banks, Orders Nationwide Review

A recent scandal in Taiwan has revealed that bank staff handling real estate loans may have accepted kickbacks from land registrars. On June 6, the Financial Supervisory Commission (FSC) announced that 15 banks have reported this as a 'major unexpected event,' with approximately 60 employees implicated. The Inspection Bureau has completed a special financial examination.

The investigation was initiated in June when prosecutors discovered that certain land registration offices allegedly provided bank officers with commissions ranging from several thousand to tens of thousands of New Taiwan dollars per transaction, in exchange for assistance with mortgage setup or cancellation procedures. The New Taipei District Prosecutors Office has summoned relevant bank staff, notaries, and employees on suspicion of violating the Banking Act by accepting improper benefits, releasing them on bail after questioning.

Chou Cheng-shan, Director-General Secretary of the Banking Bureau, explained that the initial findings suggest customers did not designate their own land registrars, leading bank employees to refer acquaintances. In return, these registrars provided kickbacks. Currently, 15 banks have reported the issue, involving over 60 employees.

Ku Kun-jung, Deputy Director of the Inspection Bureau, stated that upon receiving reports of the major incident, on-site inspections at the involved banks were completed by late June. These inspections clarified the nature of the cases and assessed the asset quality of related credit transactions. Findings have been transferred to the Banking Bureau and are currently undergoing administrative procedures.

Media inquiries questioned whether such payments could be classified as 'referral fees' or 'bonuses,' especially if they did not affect credit quality or lead to over-lending. Chou emphasized that all domestic banks strictly prohibit employees from accepting any form of kickback or benefit. Failure to comply constitutes an internal control failure.

Chou further noted that the case remains under judicial investigation, with criminal liability determined by prosecutors. From a regulatory standpoint, the FSC has requested statements and internal audits from the 15 involved banks and mandated that all 38 domestic banks conduct comprehensive internal reviews. Enhanced legal education and training are also required to determine whether this reflects a long-standing systemic issue.

Regarding potential administrative penalties, Chou stated that analysis will follow based on bank submissions and audit reports. If internal controls are found deficient, fines ranging from NT$2 million to NT$50 million may be imposed. However, it is premature to discuss specific penalties at this stage.