 |
Photo = FSS |
[Alpha Biz= Kim Sangjin] Gwangju Bank, which underwent a regular inspection by the Financial Supervisory Service (FSS) two years ago, has now faced sanctions. The issues raised included failure to report necessary information to the FSS and inadequate internal control systems, especially concerning overseas subsidiaries and the bank's internal control structure.
Recently, the FSS imposed a fine of 12 million KRW on Gwangju Bank. Additionally, one employee received a warning, and five former employees were notified of violations. The FSS also highlighted 16 managerial caution points and 22 areas for improvement.
The FSS found that Gwangju Bank's compliance officers had violated the obligation to report large cash transactions. Under the Specific Financial Transaction Information Reporting Act, a bank’s reporting officer is required to report transactions involving cash amounts over 20 million KRW (or 10 million KRW from July 2019) to the Financial Information Analysis Institute within 30 days. However, three former compliance officers at Gwangju Bank delayed reporting 217 cases between November 2016 and January 2020, with delays ranging from 23 to 838 days.
The FSS also criticized the improper performance evaluation criteria for compliance officers. These officers are responsible for overseeing the bank’s adherence to regulations during its operations. According to the Financial Company Governance Act, compliance officers and risk management officers should have separate evaluation and compensation criteria that are not tied to the company’s financial performance. However, from October 2016 to February 2019, Gwangju Bank applied the same performance evaluation criteria for compliance officers as for other employees, using metrics such as return on equity (ROE) and relative total shareholder return (TSR).
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
