Internet Specialized Bank Act and Korea Development Bank Act Pass National Assembly's Political Affairs Committee... Will They Clear the Plenary Session?

[Image source=Yonhap News]

[Asia Economy Reporter Kang Nahum] The "KT Special Privilege Act," which had previously reached the plenary session of the National Assembly but failed to pass, has been reintroduced and passed the National Assembly's Political Affairs Committee on the 28th. This bill is the "Partial Amendment to the Act on the Establishment and Operation of Internet-Only Banks (Internet-Only Bank Act)." Additionally, the "Partial Amendment to the Korea Development Bank Act," which will serve as the basis for establishing the Industrial Stability Fund, also passed the Political Affairs Committee.

The Political Affairs Committee held a plenary meeting in the afternoon and approved these two bills. The Internet-Only Bank Act was put to a vote despite opposition from Justice Party lawmaker Chu Hye-sun and Democratic Party of Korea lawmaker Je Yoon-kyung, but it ultimately passed.

The Internet-Only Bank Act mainly revises some of the disqualifying conditions related to violations of the Fair Trade Act during the major shareholder eligibility review. Under the current law, a major shareholder must have no history of violations such as those of the Fair Trade Act to receive approval for holding shares beyond the limit. Because KT had a history of legal violations, it could not become the largest shareholder of the internet bank K-Bank, and K-Bank, lacking support from a major shareholder, remained inactive for a long time.

This bill passed the Legislation and Judiciary Committee during last month's extraordinary session but was rejected in the plenary session on the 5th of the same month, with 75 votes in favor, 82 against, and 27 abstentions out of 184 participating lawmakers. Many lawmakers opposed it, citing it as the "KT Special Privilege Act." At that time, the United Future Party staged a mass walkout, accusing the ruling party of breaking an agreement, which led to a parliamentary deadlock. Subsequently, the leadership of both ruling and opposition parties agreed to reprocess the bill, and it finally passed the Political Affairs Committee on this day.

The amendment to the Korea Development Bank Act centers on establishing the "Industrial Stability Fund for Crisis Overcoming and Employment (Industrial Stability Fund)." This fund aims to support liquidity and capital reinforcement for key industries that significantly impact the national economy and employment. The seven target industries for support include air transportation, general-purpose machinery manufacturing, electric power industry, automobile engine and automobile manufacturing, ship and boat building, maritime transportation, and telecommunications.

The fund can be used not only for loans to companies in key industries but also for asset purchases, debt guarantees and acquisitions, and equity investments. The resources will be raised through the issuance of Industrial Stability Fund bonds and borrowings from the government and the Bank of Korea.

According to the initial agreement between the ruling and opposition parties, these two bills are scheduled to be simultaneously processed in the plenary session on the 29th.

This content was produced with the assistance of AI translation services.