The government has taken control of Chinfon Commercial Bank, citing the bank's worsening finances and poor management, the Central Deposit Insurance Corp said in a statement.

State-run Bank of Taiwan has been entrusted by the Financial Supervisory Commission to run Chinfon Commercial Bank, the statement said.

At the end of Jul, Chinfon Commercial Bank had NT$7.26 billion (S$324.06 million) more in liabilities than assets, according to the commission.

The bank, which operates 33 branches islandwide, accounted for 0.4 per cent of Taiwan's bank deposits at the end of Jul.

The government has taken control of a few banks with a negative net worth in the past couple of years through a financial restructuring mechanism to guarantee full protection of the bank's depositors and employees. -- AFP