Taiwan's Financial Supervisory Commission and the Central Bank of the Republic of China (Taiwan) have agreed to allow local companies to open offshore banking unit accounts at domestic banks, Taipei Times reported May 19, citing the financial regulator's chairman, Wellington Koo.

The move will enable Taiwan-based companies to borrow foreign currency funds at domestic banks. The regulator and the central bank will discuss whether to limit the amount of foreign currency-denominated lending, Koo said.

Under current rules, only overseas companies and individuals are allowed to open offshore banking unit accounts that accept foreign currency deposits.

Up to 90% of Taiwan-based companies have set up branches or paper companies overseas so they could open such accounts, Koo said. He added that the deregulation is expected to help domestic companies manage their foreign funds more conveniently and boost local banks' wealth management business.

Koo said that his successor, Financial Supervisory Commission Vice Chairman Huang Tien-mu, will announce when the deregulation will take effect.