IBK, Concerns Raised Over Side Effects of Transfer to Ministry of SMEs and Startups (Comprehensive)

Labor Union Opposes Democratic Party's Bill Proposal
"It Could Become a Financial Tool for the Regime"

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[Asia Economy Reporter Kim Min-young] Controversy is intensifying over the National Assembly's move to transfer the jurisdiction of IBK Industrial Bank of Korea (IBK) to the Ministry of SMEs and Startups. The IBK labor union argues that the bank could be reduced to a "money-dispensing window" catering to the ruling party's interests rather than functioning as a financial institution.

In the market, concerns are also raised that if IBK is moved under the Ministry of SMEs and Startups, it would escape financial regulatory supervision, potentially causing side effects. In fact, Saemaeul Geumgo, which operates under the Ministry of the Interior and Safety, has repeatedly faced issues such as moral hazard and internal discipline lapses due to lack of financial oversight.

On the 14th, the IBK branch of the National Financial Industry Labor Union issued a statement opposing the bill proposed by Kim Kyung-man, a member of the Democratic Party of Korea, which includes transferring IBK from the Financial Services Commission to the Ministry of SMEs and Startups.

The IBK labor union opposed the transfer for three reasons: "IBK could become a financial source for the ruling party," "It is like cutting open the goose that lays golden eggs," and "Efficiency and promptness are currently at their highest." The union stated, "The biggest problem is the 'politicization of IBK' that arises from leaving a specialized financial supervisory agency," adding, "It could become a money-dispensing window for the ruling party. Before discussing the advantages of transferring to the Ministry of SMEs and Startups, we should first discuss a system that is not swayed by populism depending on conservative or progressive governments."

The union also emphasized, "IBK is a sound company that generated a net profit of 1.6 trillion won last year on its own," and added, "It is not a government department funded by taxes but a profit-making company, and IBK's loan funds are generated from its own earnings, not government support." They questioned how profitability and soundness could be guaranteed if such an organization is placed under the Ministry of SMEs and Startups and prioritized for policy financial support.

They refuted the claim that transferring to the Ministry of SMEs and Startups would enable more efficient and prompt support for small and medium enterprises as "nonsense."

The union stated, "During the COVID-19 pandemic, IBK's financial support for small business owners was three times faster than commercial banks and twice as fast as during the 2008 financial crisis," criticizing, "The claim that loans would be faster if IBK is placed under the Ministry of SMEs and Startups shows a lack of understanding of the field."

In the market, there is also a view that if IBK, a listed company pursuing shareholder interests, is transferred under the Ministry of SMEs and Startups, it may face problems difficult to overcome as a financial institution. Additionally, concerns are raised about overlapping control with financial authorities, which could lead to excessive intervention in the real economy.

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