Wednesday, October 24, 2018
Regulations on Banks' Foreign Investment Eased
Overseas Investment Made Easy
Regulations on Banks' Foreign Investment Eased
  • By Yoon Young-sil
  • May 21, 2018, 17:55
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The financial regulator has simplified the regulations on banks to facilitate their advance into foreign countries.

Banks are exempted from advance notification obligation for overseas investments smaller than 1% of their equity capital.
Banks are exempted from advance notification obligation for overseas investments smaller than 1% of their equity capital.

Under the revised regulations, a bank that plans to make an investment in a foreign country will be exempted from the obligation of notifying its investment plan to financial authorities in advance, if the investment is less than 1% of the bank's equity capital.

In the past, banks were also obliged to report their investment plans in advance to the Financial Services Commission (FSC) if their capital adequacy ratios were below 10%, or if the credit rating of the country where they planned to invest was below B+.

However, in the future, if the size of a bank’s investment in a foreign country is less than 1% of their equity capital, they only have to report it ex post facto.

"Softening the regulations was necessary because it was difficult for banks to meet the regulatory requirements and make a timely entry into overseas markets at the same time,” the FSC said.