Governed under the Executive Yuan, Central Bank of China was established by Dr. Sun Yat-sen, National Father of the Republic of China in 1923. With the primary objective of financing the national development undertakings, Central Bank of China was inaugurated in Canton district of the country. The Central Bank of China is often confused as Bank of China or People's Bank of China of the People's Republic of China. The reason lies in the fact that, in December 1949, the bank was relocated from the Chinese mainland to Taipei and the bank resumed its functions in 1961. Until February 10, 2007, The Central Bank of the Republic of China (Taiwan) was called as Central Bank of China.
Some of the basic responsibilities and functions of The Central Bank of the Republic of China (Taiwan) are:
- Open market operation or the buying and selling bonds and securities by the Bank are the most important and flexible tool. It directly influences the reserves and the intensity of inter-bank loan interest rates.
- Discount policy either changes the discount rates or provides the credit capacity of the banks. There are three types of credit facilities, viz., accommodations without collateral, accommodations with collateral, and discounts.
- Reserve requirement eligible the Bank to change the cash reserve ratios according to the requirements and hence extend the credits or loans. Sometimes this task stabilizes the impacts of open market operations.
- Re-deposits of the bank are allowed by the acceptance or realization of deposits from other banks, financial institutes or through postal savings system (a way of predominant portion of deposits).
- Various other monetary instrument like the selective credit controls. It refers to actions taken by the Bank to curb certain types of credit extensions by financial institutions.
- Foreign Exchange Management includes:
- Utilizing Foreign Exchange Reserves
- Foreign Exchange Regime
- Foreign Exchange Regulations
- Payment Systems
- Central Government Securities Settlement
- Credit Card and Shared ATM System
- Clearing House System
- Inter-bank Remittance System
- CBC Inter-bank Funds Transfer System
- Eligibility of issuing of Currency notes were availed since July 1961. The Central Bank of China is responsible for designing, arranging and producing bank notes and coins, and also destroying old notes. Printing and minting that is carried out by the Central Engraving and Printing Plant and the Central Mint, are run by the Central Bank of the Republic of China (Taiwan).
The Bank of Taiwan or the Central Bank of China is also authorized to distribute and sort out the issued or printed notes and coins. The Bank closely monitors other changes, such as the demand for currency, and plans in advance accordingly to meet the economic needs.
