A Non-binding Proposal
Citibank Korea and Korea Development Bank have decided to reject the proposal put forward by the Financial Supervisory Service (FSS) to arbitrate the drawn-out KIKO dispute.
Citibank made the decision at a board meeting held on March 4. It is one of the five commercial banks that pondered whether to accept the FSS proposal. They have until March 6 to make a decision on the proposal.
In addition, Hana Bank and Daegu Bank reportedly expressed their intention to request another extension of the deadline. Shinhan Bank has decided to make a decision at a board meeting on March 6. The FSS is reportedly willing to accept the request for a third extension of the deadline.
The FSS says that if a bank asks for a re-extension of the deadline for a valid reason, it will accept it. Earlier, the FSS extended the notification deadline twice at banks’ requests.
"No limit has been imposed on the number of re-extensions,” an FSS official said. "If we receive another extension request, we will make a decision after reviewing it carefully.”
Banks are known to be reluctant to accept the arbitration proposal of the FSS dispute settlement panel. “The panel’s proposal is not legally binding, but the FSS is putting pressure on banks to accept it through the repeated extension of the deadline,” a bank insider said.