SEOUL, Aug. 21 (Korea Bizwire) — The head of the financial regulator said Tuesday that technology firms could become a top shareholder of an Internet-only bank as the government moves to ease regulations on Web-only banks’ ownership structure.
Under the current banking law, a nonfinancial firm is banned from owning 4 percent of voting stocks in an Internet-only bank.
The strict rule is aimed at preventing family-run business conglomerates from using a bank as their private vault, but it makes it difficult for Internet-only banks to raise capital.
Choi Jong-ku, chairman of the Financial Services Commission (FSC), told a parliamentary committee that easing of the regulation would be “meaningful” if technology firms are allowed to become a top shareholder of a Web-only bank.
Choi also said that big companies in non-technology business sectors would be banned from becoming a top shareholder of an Internet-only bank.
Two Internet-only banks — K-Bank and Kakao Bank — were launched last year, becoming the first newcomers in the nation’s banking industry in more than two decades.
K-Bank and Kakao Bank have challenged traditional banks in South Korea, forcing them to cut commission fees and renovate their online and mobile banking services.
However, sustainable growth of online-only banks have been hampered by the regulations as both KT and Kakao are unable to buy new shares in the banks’ rights offering.