Taiwan, with a population of 2.2 crore has been overbanked, with 47 domestic banks, 5 medium-sized banks and 36 foreign banks. It needs to reduce these numbers so as to become efficient and competitive. Non-performing assets pose a formidable challenge, especially when loans under surveillance also are added to the NPAs. While aggressivewrite-off is encouraged, asset management companies buy part of the bad loans. However, there is no recapitalization provision from the government.

Taiwan, also called the Republic of China (RoC), is an East Asian Country, located in the West Pacific. Its population is 2.2 crore. It was established in the year 1912, as a sovereign state that follows the democratic republican form of government. About 60% of Taiwan's population is concentrated in four metro cities namely Taipei, Kaohsiung, Taichung and Tainan. The indigenous populace constitute a tiny figure of over 4 lakh. Others are immigrants from China.

Taiwan has a large number of banks for a nation with a population of barely 2.2 crore. There are 47 domestic banks, five medium-sized banks and 36 foreign banks. While domestic banks account for over 68% of deposits and 85% of loans, medium-sized banks contribute about 4.5% of deposits and 5.8% of loans. Foreign banks have an insignificant market share with 2.5% of deposits and 2.6% of loans. Other depository institutions (which are not classified as banks) in the form of postal savings, Farmers and Fishermen's Associations and credit cooperative associations, account for the reminder of deposits (25%) and loans (6.6%).

Banks extend finance to industries, wholesale trade, retail trade besides consumer and housing sector. Construction industry also absorbs a significant portion of bank credit at 14 to 15% level.

Taiwan Overcrowded Banking Sector, deposits, population, domestic, government, account, credit, foreign, challenge, companies, competitive, constitute, Construction, consumer, cooperative, efficient, Farmers, Fishermen's, associations, housing, management, market, Republic, sector