Main issues surrounding separation of banking and commerce for Internet-only banks
- 6 years ago
인터넷뱅킹 은산분리 규제완화 논의...향후 전망은?
Yesterday President Moon Jae-in called for steps to slash red tape in the country's financial sector.
He focused on separating commerce and banking.
The debate continues on the call for this type of change for internet only banks.
Our Kim Hyesung provides a closer look.
The move to deregulate internet-only banks is gaining traction....pushed by not only the banking sector and the Financial Services Commission but also President Moon Jae-in.
Under the current Banking Act, non-financial business operators cannot hold more than four percent of the total number of outstanding voting stocks of a bank and ten percent of its stocks.
The law was introduced in 2002 to prevent financial banks from being used as companies' own private vaults,...but now there is a growing call to revise the law, saying that it is holding back innovation.
Due to the shared ownership limit, Kakaobank, which was launched by local IT giant Kakao last year, can own only ten percent of the bank's shares...with the majority owned by Korea Investment Holdings.
The same goes for K bank, the other internet-only bank in the country..
"Under the current banking structure, Korean tech giants need other shareholders' approval to raise capital. In other countries, there's also a separation of commerce and banking, but there are exceptions for Internet-only banks. For instance, Internet-only banks in Japan own 100 percent of their shares, some U.S. tech companies have internet banks as their affiliates as a way to raise capital and nurture innovation."
It's not just Japan, the U.S. and Europe.
China's leading tech companies Alibaba, Tencent, Xiaomi, Baidu...all have their own Internet-only banks that helped them come up with new financial investment products, and invest in AI and other areas.
With growing calls for easing of internet-only bank regulations, it's highly likely that Korea's parliament will pass a bill on raising the share ownership for non-financial business operators from the current four percent to a range between 34 percent to 50 percent.
But with opposition from civic groups, preconditions and restrictions may be included, to prevent large conglomerates from owning too many shares.
Kim Hyesung, Arirang News.
Yesterday President Moon Jae-in called for steps to slash red tape in the country's financial sector.
He focused on separating commerce and banking.
The debate continues on the call for this type of change for internet only banks.
Our Kim Hyesung provides a closer look.
The move to deregulate internet-only banks is gaining traction....pushed by not only the banking sector and the Financial Services Commission but also President Moon Jae-in.
Under the current Banking Act, non-financial business operators cannot hold more than four percent of the total number of outstanding voting stocks of a bank and ten percent of its stocks.
The law was introduced in 2002 to prevent financial banks from being used as companies' own private vaults,...but now there is a growing call to revise the law, saying that it is holding back innovation.
Due to the shared ownership limit, Kakaobank, which was launched by local IT giant Kakao last year, can own only ten percent of the bank's shares...with the majority owned by Korea Investment Holdings.
The same goes for K bank, the other internet-only bank in the country..
"Under the current banking structure, Korean tech giants need other shareholders' approval to raise capital. In other countries, there's also a separation of commerce and banking, but there are exceptions for Internet-only banks. For instance, Internet-only banks in Japan own 100 percent of their shares, some U.S. tech companies have internet banks as their affiliates as a way to raise capital and nurture innovation."
It's not just Japan, the U.S. and Europe.
China's leading tech companies Alibaba, Tencent, Xiaomi, Baidu...all have their own Internet-only banks that helped them come up with new financial investment products, and invest in AI and other areas.
With growing calls for easing of internet-only bank regulations, it's highly likely that Korea's parliament will pass a bill on raising the share ownership for non-financial business operators from the current four percent to a range between 34 percent to 50 percent.
But with opposition from civic groups, preconditions and restrictions may be included, to prevent large conglomerates from owning too many shares.
Kim Hyesung, Arirang News.