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Gov't mulls system to supervise banks over service charges

All News 11:12 July 09, 2017

SEOUL, July 9 (Yonhap) -- South Korea's financial regulator said Sunday it is considering adopting a system to supervise banks when they raise service charges.

The move is part of President Moon Jae-in's pledges to help relieve the financial burden of consumers and strengthen transparency at banks when they raise fees and charges.

In a report made to the ruling Minjoo Party, the Financial Supervisory Service (FSS) said banks, insurers and card companies have charged a combined 27.7 trillion won (US$24 billion) in service fees since 2013, with numbers for banks accounting for 98 percent, or 27.2 trillion won.

In 2011, the Lee Myung-bak government had banks lower their charges for automatic teller machines and remittance services by 50 percent. But in 2015, banks raised the charges as the Park Geun-hye administration allowed financial institutions to raise them in accordance with market rules.

Financial institutions have long argued their service charges in South Korea are similar or low compared with other countries, such as the United States, Britain and Japan. They have also argued service rates should be decided through competition among players in the market.

But customers have held different views on the matter. They have criticized the country's lenders for making money by raising charges instead of launching new products and innovating their businesses.


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