Even Partial Closure of Bank Branches Requires Approval

Amendment to the Enforcement Decree of the Banking Act Approved at the Cabinet Meeting

From now on, when a bank partially closes its operations, it must obtain approval from the financial authorities if the total amount of assets subject to closure or the operating profit accounts for 10 percent or more of the total.

Photo by Dongju Yoon doso7@

On the 14th, the Financial Services Commission announced that the partial amendment to the Enforcement Decree of the Banking Act containing this provision was approved at the Cabinet meeting.

According to this amendment, the same criteria apply when partially transferring operations. In the case of business acquisition, in addition to the asset amount and total profit criteria, approval from the Financial Services Commission is required if the amount of liabilities to be assumed accounts for 10 percent or more of the total liabilities.

Additionally, banks are required to report the status of debt restructuring newly incurred during the fiscal year for borrowers and guarantors with loans of 10 billion KRW or more at the regular shareholders' meeting. The penalty for banks violating the obligation to report at the regular shareholders' meeting has been specified as "up to 30 million KRW."

This amendment to the Enforcement Decree will take effect on September 22, in line with the Banking Act.

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