Shinhan Bank Accepts Lime Fund Arbitration Committee Settlement... Compensation Proceeding (Comprehensive)

The Financial Supervisory Service held a Subcommittee on the 19th
Recommended Shinhan Bank to compensate two investors 69% and 75% respectively

[Asia Economy Reporter Park Sun-mi] Shinhan Bank held a board meeting on the 21st and resolved to accept the Financial Supervisory Service Dispute Mediation Committee's (hereinafter referred to as the Dispute Mediation Committee) mediation proposal regarding the Lime CI (Trade Insurance) Fund.

Shinhan Bank plans to immediately pay compensation to two customers whose compensation ratios have been confirmed according to the Dispute Mediation Committee's compensation plan, provided they agree, and intends to promptly proceed with compensation procedures for other customers in the same manner.

On the 19th, the Financial Supervisory Service held a Dispute Mediation Committee regarding Shinhan Bank's sale of the Lime Fund and recommended that the seller, Shinhan Bank, compensate two investors at rates of 69% and 75%, respectively. The Dispute Mediation Committee recognized the bank's liability for damages in both cases, finding that Shinhan Bank neglected investor protection efforts, causing losses. The bank was investigated for failing to properly verify investor profiles or for falsifying information while selling high-risk products.

The minimum compensation rate, or basic compensation ratio, is 55%. First, a 30% compensation ratio was assigned for violations of the suitability principle and duty to explain by the branch sales staff, consistent with basic dispute mediation cases. An additional 25% was added considering the head office's negligence in investor protection.

The Dispute Mediation Committee ordered Shinhan Bank to compensate at the highest rate of 75% for cases where risky products were sold to elderly customers seeking principal protection. For cases where the investment profile of small businesses desiring safe products was arbitrarily classified as "aggressive investment type" and ultra-high-risk products were sold, a 69% compensation was recommended. The Financial Supervisory Service plans to allow voluntary adjustments with compensation ratios ranging from 40% to 80% for individual investors and 30% to 80% for corporations for other investors not covered by the Dispute Mediation Committee.

Meanwhile, Shinhan Bank had made an advance payment of 50% of the subscription amount to customers who subscribed to the Lime CI Fund in June last year. A Shinhan Bank official stated, "We will do our best to recover the assets of the Lime CI Fund to minimize the damage to customers who trusted and waited for Shinhan Bank."

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