Hua Nan Bank Fined NT$8 Million for Employee Embezzlement; Bank Pledges Internal Control Overhaul

The Financial Supervisory Commission (FSC) announced an NT$8 million fine against Hua Nan Bank for failing to implement effective internal controls, following the discovery that three former employees at three branches had embezzled a total of NT$4.6286 million from nine clients. Embezzlement methods included unauthorized use of client stamps and forgery of signatures on deposit withdrawal slips.

Hua Nan Bank stated that upon discovering the irregularities, it actively reported the cases to the authorities and cooperated fully with investigations. The bank has since implemented remedial measures and internal control enhancements to protect client interests. The bank emphasized its commitment to reinforcing risk management and operational integrity to prevent future recurrence.

FSC Banking Bureau Deputy Director-General Chang Chia-kuei noted that the cases involved irregularities at the Jisui, Shilin, and Tainan branches, dating back as far as 2017. Beyond direct embezzlement, some employees were found to have withheld excess settlement funds. All three involved individuals have since been dismissed and have returned the misappropriated funds.

The FSC identified two primary systemic failures: inadequate detection mechanisms for anomalous employee behavior and insufficient audit controls within the deposit and foreign exchange systems. The regulator has issued five supervisory requirements, including a comprehensive review of transaction systems, an organizational culture overhaul, an assessment of managerial responsibility, legal pursuit of the former employees, and the reporting of these individuals to the Joint Credit Information Center.