Under the measures, Internet-only banks will be off limits to the country’s conglomerates. (image: Korea Bizwire)
SEOUL, Jun. 18 (Korea Bizwire) — South Korea’s financial regulator unveiled a set of measures Thursday aimed at encouraging big name local IT firms to invest in the Internet-only banking industry with a focus on lowering entry barriers and easing related regulations.
Under the measures, Internet-only banks will be off limits to the country’s conglomerates, including Samsung Electronics Co. and Hyundai Motor Co., the country’s No. 1 and No. 2 companies, respectively, by market capitalization.
A non-financial firm will be allowed to hold a 50 percent stake in an Internet bank. Under the current financial laws, a non-financial company is banned from holding more than a 4 percent stake in a bank. All commercial banks are also required to have brick-and-mortar offices and face-to-face channels with customers.
But as part of measures to induce IT firms to the sector, the Financial Services Commission (FSC) raised the stake ceiling, but still bans industrial companies affiliated with large business groups from investing in financial entities.
The FSC set the minimum equity capital requirement for an Internet bank at 50 billion won (US$45.1 million), half what is required under the current laws.
Internet-only bank’s businesses range from deposits, lending and cards to foreign exchange transactions, and their financial soundness is regulated in the same way as that of other commercial lenders.
The FSC expects Internet-only banks to be launched in South Korea early next year as the unveiled measures will open doors for IT firms like Naver and Daum Kakao to own an Internet bank.
The regulator said revisions to the current banking laws will be put forward to the National Assembly in September.
(Yonhap)
