Internet-primary Banks

 

The Korean government helps establish Internet-primary banks by circumventing banking-commerce separation and classifying them into non-banking institutions.

“It is not easy to relax the regulations on industrial capital’s participation in the business of financial firms, because there are a series of obstacles, including objections from the political community,” a representative explained, adding, “However, industrial capital can set up Internet-primary banks or participate in the management without restrictions if such banks are considered as non-banking companies.”

According to the current Banking Act, any industrial capital with assets of 2 trillion won (US$1.8 billion) or more is subject to a shareholding limit of 4 percent of a bank on a voting rights basis.

The Financial Services Commission, in the meantime, is planning to come up with a set of policies for the promotion of Internet-primary banks in June.

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