[Apha Biz=(Chicago) Reporter Paul Lee] In the future, banks must also obtain approval from the Financial Services Commission when they close some of their businesses.

This is to compensate for Citibank Korea's failure to proceed with the process of approving the closure of its business due to lack of legislation when it shut down retail banking in 2021.

The Financial Services Commission announced at a Cabinet meeting on the 14th that a partial amendment to the Enforcement Decree of the Banking Act was approved. Existing banking laws require banks to be approved by the Financial Services Commission only if they close their entire operations.

For this reason, when Citibank decided to withdraw its retail banking services for individuals while maintaining wholesale financial services in Korea, it relied on the "Financial Consumer Protection Act," not the Banking Act, to reduce consumer damage in the withdrawal process. The revised enforcement ordinance defines the total amount of assets subject to closure or operating profit of 10% or more as an "important part," and if it is closed, it should be approved by the Financial Services Commission. In addition, when handing over 'important parts' work to other banks, the same standards were applied to obtain approval from the Financial Services Commission.

Meanwhile, it also specified a rule that requires banks to report to regular shareholders' meetings when reorganizing bonds for companies that have made large-scale loans.

The enforcement ordinance stipulates that if a bank readjusts new bonds to loan and payment guarantee companies worth more than 10 billion won, it must report the current status to the regular shareholders' meeting, and if violated, it will be fined up to 30 million won. The revised enforcement ordinance will take effect on the 22nd of next month.

 

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