Financial Supervisory Service Grants More Time to Banks Unable to Conclude 'KIKO Compensation' Case
Financial Supervisory Service Extends Deadline for Banks to Accept 'KIKO Dispute Resolution Proposal' Notification
Extension Likely Until the End of This Month
[Asia Economy Reporter Kwon Haeyoung] The Financial Supervisory Service (FSS) has decided to extend the deadline once again for banks to decide whether to accept the compensation recommendation related to the foreign exchange derivative product 'KIKO'.
According to the financial sector on the 5th, Shinhan Bank and Hana Bank plan to request the FSS to extend the deadline for deciding on KIKO compensation, which is currently set for the 7th.
An FSS official stated, "No bank has yet requested an extension of the deadline for deciding whether to accept the KIKO compensation," adding, "If banks request an extension in the future, we plan to consider the reasons and then decide on the extension."
Previously, in December last year, the FSS recommended six banks?Shinhan, Woori, KDB Industrial, Hana, Daegu, and Korea Citi Bank?to compensate four KIKO-affected companies a total of 25.5 billion KRW (15-41% of the damages). Shinhan Bank was recommended to pay 15 billion KRW, Woori Bank 4.2 billion KRW, KDB Industrial Bank 2.8 billion KRW, Hana Bank 1.8 billion KRW, Daegu Bank 1.1 billion KRW, and Citi Bank 600 million KRW. The first deadline for deciding on compensation was January 8, but at the banks' request, the FSS extended the deadline once more until February 7.
Currently, the only bank that has expressed its intention to accept the compensation recommendation is Woori Bank. Last week, Woori Bank held a board meeting and resolved to compensate two affected companies with 4.2 billion KRW.
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Hana Bank held a board meeting on the 3rd but could not decide on compensation, and Shinhan Bank planned to put the matter on the agenda for its board meeting on the 4th but judged that additional review time was necessary. Both banks intend to request another extension from the FSS. The next deadline is expected to be around the end of February.
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