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(2nd LD) S. Korea's parliament passes key bills on economy, deregulation

All News 21:38 September 20, 2018

(ATTN: REWRITES headline, lead; UPDATES with more info throughout)

SEOUL, Sept. 20 (Yonhap) -- South Korea's parliament on Thursday passed key bills, including a proposal aimed at easing nonfinancial firms' ownership cap in Internet-only banks, after weeks of intense partisan negotiations.

The passage of a set of bills on the economy and deregulation is expected to help buttress President Moon Jae-in's push for innovative growth and to boost the slowing economy.

One of the most contentious pieces of legislation was a bill aimed at allowing nonfinancial firms to boost their stake in Internet-only banks from the 4 percent ownership ceiling.

The new bill permits nonfinancial firms to hold up to a 34 percent interest in web-only banks, a move intended to drive innovative growth in the financial sector.

Despite easing the ownership limit, family-owned conglomerates, known as chaebol, will not be allowed to raise their stakes in Internet-only banks in principle, a move aimed at preventing them from using such lenders as private coffers.

But as an exception, information and communication technology-focused companies will be subject to the deregulation, a move designed to open the door for IT firms entering the web-only banks business.

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

Bills on protecting tenants at commercial buildings and promoting business deregulation were also passed.

Through bipartisan cooperation, rival parties earlier tentatively agreed to increase the period for guaranteeing existing tenants' contract renewal to 10 years from the current five, a move aimed at better protecting smaller businesses.

The owners of mom and pop shops and self-employed businesspersons are feeling the pinch the most amid the slowing economy and the government's minimum wage hikes.

Hours before the plenary session, a parliamentary committee approved a bill to establish regulation-free special zones to nurture innovative growth or strategic industries at municipal or provincial levels.

The compromise resulted from tough negotiations to close gaps on details about how to designate new business areas and districts with regulatory benefits.

The ruling Democratic Party submitted a law revision to temporarily ease regulations in the initial stage of business projects, while opposition parties' proposals called for across-the-board deregulation in designated industries.

But the parties agreed last month to combine their respective bills for deliberation.

The bill on protecting tenants was not put forward for a vote at last month's extraordinary session as the main opposition Liberty Korea Party called for the passage of controversial bills in a lump-sum manner.

(2nd LD) S. Korea's parliament passes key bills on economy, deregulation - 1


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