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Parties agree to pass bill on deregulation for Internet-only banks

All News 16:09 August 08, 2018

SEOUL, Aug. 8 (Yonhap) -- Ruling and opposition parties agreed Wednesday to pass a bill to allow nonfiancial companies to increase their stakes in Internet-only banks at an extraordinary parliamentary session in August.

The agreement came one day after President Moon Jae-in raised the need to ease regulations on bank ownership in the case of Internet-only banks in a bid to promote innovation in the financial sector.

The floor leaders of the parties said that they've decided to handle a special bill on online banks that calls for easing regulations that ban nonfinancial firms from owning more than a 4 percent stake in a lender.

The current banking law is aimed at prevent industrial capitals, mainly conglomerates, from gaining control of banks on concerns that they could easily get credit for their expansions.

Two Internet-only banks -- K-Bank and Kakao Bank -- were launched last year, but they have faced difficulty for sustainable growth as their two biggest shareholders, KT and Kakao, are unable to issue shares for the banks' capital increase.

Currently, lawmakers have proposed bills that aim to boost the ownership cap to 34 percent or 50 percent in Internet-only banks.

Meanwhile, the floor leaders also agreed to improve lawmakers' uses of "special activity funds" in a more transparent manner.

Lawmakers' taking of massive special activity funds was recently highlighted amid criticism that the money has been spent without any oversight over its use.

"Considerable parts of the special funds are used for the purpose of public activities, so they decided to make lawmakers turn in receipts and other documents for transparency when using them," said Park Kyung-mee, a spokeswoman at the ruling Democratic Party (DP).

Parliament provided ranking lawmakers, including major party leaders, with up to 60 million won (US$53,571) every month in the name of special activity funds, according to the People's Solidarity for Participatory Democracy, a civic group.


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