Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/Non-accrual Loans Article 12

The write-off of non-performing loans and non-accrual loans shall beauthorized by a resolution passed by the board of directors, and thesupervisors shall be notified. However, when requested by theCompetent Authority or a financial examination agency (organization),loans must be immediately written off, a report must be made to thesubsequent board meeting, and the supervisors must be notified foracknowledgement. When the board of directors is in recess, the boardof executive directors may exercise its authority on [the board ofdirectors'] behalf, and shall notify the supervisors and make a reportto the board of directors for acknowledgement.With regard to the stipulations of the preceding paragraph, if any loancases exceed the limits prescribed in Article 33 of the Banking Actwhen a bank is conferring credit or writing off loans, at leasttwo-thirds of all directors must be present, and at least three-fourthsof the present directors must give their consent [to pass aresolution].The Taiwan branch of a foreign bank shall handle the authorizationsdescribed above in accordance with the authorization procedures of itshead office.