Deregulation for Internet Bank
The national Assembly started to review easing the regulation of the industrial capitals’ owning banks, which is so called “bank-industry separation regulation.”
On November 15, the National Policy Committee of the National Assembly made public a report on the Internet bank-related bills recently tabled by four lawmakers.
According to the report, for deregulation of the bank-industry separation, credit offering regarding major shareholders should be limited and constraints should be imposed on enterprises subject to cross-shareholding restrictions so that side effects of deregulation regarding separation between banking and commerce can be minimized.
“Internet bank establishment based on Banking Act amendment is efficient in that Internet banks are supposed to be authorized in compliance with the Banking Act, many countries other than South Korea use their banking acts to define Internet banks and additional provisions are not required to be prepared,” the committee explained. “Internet bank establishment based on a special law, which is being advocated by opposition parties, is suitable in that it can prevent the application of banking-commerce separation deregulation to banks in general, facilitate the definition of complementary marketing tools so that visually impaired persons, the elderly and the like can have a higher level of banking service accessibility and regulations applied only to Internet banks can be enacted with ease,” the committee added.
According to the four bills, banking-commerce separation deregulation can be realized based on an upward adjustment of the ceiling applied to the number of voting stocks non-financial business operators can have in Internet banks. In the current law, their voting stocks cannot exceed 4% of the total. The ratio is 50% and 34% in the bills proposed by the lawmakers advocating Banking Act revision and the special law, respectively.
The National Policy Committee is planning to hold five subcommittee meetings to deliberate on the bills. The first subcommittee meeting is scheduled for November 17.