Troubles in India
A dark shadow is cast on KB Kookmin Bank’s plan to tap into the Indian market.
According to the banking industry, although KB Kookmin Bank received the approval of its plan to turn its office in Gurgaon, India into a branch from the RBI in March, no progress has been made about the main approval of the plan since then.
In addition, recently some members of the Financial Supervisory Service in Korea visited India to check the status of Korean banks' entry into overseas markets. Some media reported that Indian financial authorities showed negative attitudes about Kookmin Bank’s plan to turn its office in Gurgaon, India into a branch.
It is said that the Indian financial authorities’ negative attitudes were blamed on a bad business practice at Kookmin Bank's Tokyo branch. KB Kookmin Bank's Tokyo branch received a four-month business shutdown at the end of 2014 as Japanese financial authorities found out that former branch heads received some of loans as rebates and privately used the rebates to buy real estate among other things. In September of 2014, the Tokyo branch was even instructed by the Japanese Financial Services Agency to report quarterly performance improvements.
KB Kookmin Bank was trying to convert its Mumbai office into a branch in June 2012. but delayed approval by the local government compelled KB Kookmin Bank to move the offices to Gurgaon in January last year and since then, the bank has worked on transforming the office into a branch. Gurgaon, a new IT industry center in India, is rising as an attractive market with large Korean companies including Samsung Electronics and LG Electronics doing business there.
Woori Bank, Shinhan Bank and other commercial banks are expanding their business rapidly in India, making KB Kookmin Bank impatient.
"Kookmin Bank has received a poor global business scorecard due to the failure of its investment in the Kazakhstan Center Credit (BCC) bank and problems at the Tokyo branch," an official in the bank industry said,
On the other hand, controversy has broken out as it was found that Kookmin Bank manipulated a technology evaluation report in order to boost the performances of its technology finance in Korea.
It is said that KB Kookmin Bank fabricated 60 loans after giving them as if the loans were given via technology finance during the evaluation of about 150 additional loans given to small and mid-sized companies this year and lied to financial authorities.