Yoon Suk-heun, the governor of the Financial Supervisory Service, had declared war against financial institutions to protect consumers.
The top regulator said on July 9 that he would start a war with financial institutions to protect consumers from incomplete sales of financial products.
"Incomplete sales have been on the rise in many financial institutions," Yoon said after announcing plans to reform the FSS.
Yoon said the FSS would cope with the growth in incomplete sales by stepping up oversight of the practices of financial companies before and after sales of financial products.
Referring to the three banks that were recently found to have imposed unreasonable lending rates on their customers, Yoon acknowledged that it is difficult to impose sanctions on them because under the current law, banks are allowed to determine lending rates based on their bylaws.
But he said the FSS would find a way to punish the banks that overcharged their customers intentionally. The three banks were Kyungnam Bank, KEB Hana Bank and Citibank Korea.
"When a bank was found to have applied wrong interest rates to customers in more than 10,000 cases, they cannot be seen as caused by errors," Yoon said, adding, "We will look into other banks to see whether their interest calculation systems are appropriate.”
He said that while it is difficult to say that all loans are predatory, some loans have such aspects to them. “This is why we are planning to look into how banks calculate their interest rates,” he said.
Yoon also said the FSS would tighten accounting rules on big companies and impose tougher penalties against corporate crimes. He said the FSS would step up its monitoring of accounting practices in the nation's top 50 companies and would swiftly launch a probe into cases of stock price manipulation or illegal short selling.