Shinhan Bank Also Decides on KIKO Compensation... Third After Woori and Citi Bank (Comprehensive)

[Asia Economy Reporter Kangwook Cho] Shinhan Bank has become the third bank, following Woori Bank and Korea Citibank, to decide on compensation for companies affected by the foreign exchange derivative product KIKO. However, the bank plans to proceed with "compensation" based on the social role of financial institutions, not "reparation" based on legal liability.

According to the financial sector on the 15th, Shinhan Bank held an extraordinary board meeting on the same day and decided to provide compensation to some affected companies related to the KIKO incident.

Shinhan Bank stated, "There is no legal liability related to the KIKO dispute," but added, "However, considering the social role of financial institutions and the current difficult situation faced by small and medium-sized enterprises, we decided to provide compensation."

The bank did not disclose the compensation targets or amounts. Shinhan Bank explained that it determined the compensation criteria by referring to existing Supreme Court rulings, legal opinions from external experts such as lawyers, and comprehensively considering the individual circumstances of each company. However, since the final stage remains, it is difficult to specify the exact amounts and compensation targets at this point.

Regarding the timing of compensation, the bank said that since the situations of individual companies vary, it is difficult to set a precise compensation deadline, but it plans to proceed with the compensation process as quickly as possible.

This compensation by Shinhan Bank will be provided to some companies discussed within the autonomous consultative body, not the four companies listed in the dispute mediation committee's proposal. Shinhan Bank still rejects the dispute mediation committee's compensation plan. To resolve the prolonged dispute and fulfill the social responsibility of financial institutions to protect consumers, Shinhan Bank decided to participate in the "Bank Council" in June.

The day before, Korea Citibank also held a board meeting and decided to compensate some KIKO-affected companies from the perspective of social responsibility.

Citibank also maintains that it has no legal liability but reportedly decided to provide compensation as part of its social responsibility toward small and medium-sized enterprises struggling due to the COVID-19 pandemic. Similarly, it did not disclose the specific compensation amounts or the number of recipient companies.

On the other hand, earlier this year, Woori Bank was the only bank in the banking sector to accept the Financial Supervisory Service's KIKO dispute mediation results and compensated two affected companies with 4.2 billion KRW.

However, the other five banks (Shinhan, Industrial, Woori, Citibank, Hana, and Daegu Bank), except for Woori Bank, rejected the mediation proposal, citing that "compensation at this point could be considered embezzlement since the statute of limitations for claims for damages under civil law has expired."

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