"Even if You Sell Gold, Silver Is Not Allowed"... Outdated Regulations in the Savings Bank Industry with 7 Million Traders

Positive Regulation Allows Only Permitted Tasks; Otherwise, Principally Prohibited
'Absurd' Regulations Far from Accident Prevention and Consumer Protection
Industry Appeals to Lift Unnecessary Regulations or Adopt Negative Regulation Approach

[Asia Economy Reporter Song Seung-seop] "Gold bars can be sold, but silver bars cannot."

The savings bank industry, with over 7 million traders, is sighing over unreasonable regulations that have not improved for years. These absurd standards, far from protecting financial consumers, are acting as obstacles to promotional and marketing competitiveness.

According to the industry on the 28th, under current regulations, savings banks can sell gold bars but cannot sell silver bars. The sale of gold bars began when financial authorities allowed savings banks to sell eight types of products ranging from 3.75g to 1kg, under the pretext of securing ancillary revenue and diversifying business. Although silver bars are similar minerals, they are not included in the approved list and therefore cannot be sold. Opening gold passbook accounts that allow investment in gold by 1g units is also not permitted.

The same applies to game tickets and concert tickets. Gift certificates and lottery tickets included in the types of savings bank business can be sold to customers, but certain types of "tickets" cannot be sold. Tickets for sports games sponsored or invested in, or for affiliated sports teams directly operated by the bank, are all treated the same. In the past, Welcome Savings Bank, which conducted linked sales with NC Dinos, could not sell game tickets, and currently, OK Savings Bank, which operates a volleyball team, cannot sell affiliated team tickets except for promotions.

This is because the entire financial industry, including savings banks, is subject to "positive regulation." Positive regulation is a regulatory system that lists what is permitted by law and policy and prohibits everything else. Savings banks can only conduct business specified in the "Standard Operating Procedures for Savings Banks" announced by the Financial Supervisory Service. In principle, they cannot perform any business other than those allowed by financial authorities. If they wish to change the type or method of business, they must report in advance to the Financial Services Commission.

Positive Regulation Is Particularly Strict for Savings Banks

The savings bank industry explains that although commercial banks are also subject to the same positive regulation, the level of application and the scope of permitted business are actually different. There are complaints that regulations are excessively strict even in areas unrelated to core regulatory fields such as asset or credit management and soundness. In the case of ticket sales, commercial banks had been conducting them as a customary practice even before they were officially permitted, and financial authorities now officially recognize them as ancillary business. Silver bars and gold passbooks are also possible at commercial banks.

The authorities are gradually changing regulations, but the industry believes these changes do not keep pace with the rapidly changing market. For example, after YouTube and social networking service (SNS) marketing became active, TV advertising time regulations were relaxed, or when the number of physical branches began to decrease due to COVID-19 and the activation of non-face-to-face finance, the relaxation of branch installation requirements made regulatory easing less attractive.

This is why voices are emerging among industry insiders calling for the relaxation of unnecessarily rigid regulations or the introduction of negative regulation across the industry. A savings bank official said, "Finance is a regulated industry, and strict regulations suitable for the savings bank environment must be recognized," but added, "It is problematic when incomprehensible regulations hinder competitiveness." Another official appealed, "It would be fine to list the businesses savings banks are not allowed to do, so negative regulation is needed."

Professor Lee Kyung-mook of Seoul National University’s Business Administration Department advised, "Korea’s financial industry regulations are relatively strong globally. Strong regulations should be maintained to prevent reckless business such as excessive lending to specific entities or financial accidents, but ancillary businesses should be left to the discretion of the companies."

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