99.1 Billion Won Financial Accident at 5 Major Banks... Embezzlement Most Frequent, Recovery Rate Only 10%

Customer Deposits and Company Fund Embezzlement Most Frequent
Recovery Rate Drops as Follow-Up Actions Delay After Incidents

Amid recurring financial incidents such as embezzlement in the banking sector every year, it has been reported that nearly 100 billion KRW worth of financial accidents occurred in just the five major banks. However, due to delayed recognition of these incidents, the recovery amount was found to be only about 10%.

According to data submitted by the Financial Supervisory Service to the office of Yoon Chang-hyun, a member of the People Power Party, for the national audit on the 12th, the total amount of financial accidents that occurred from 2019 to July of this year at the five major banks?KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, and NongHyup Bank?was calculated to be 99.193 billion KRW.

According to the National Assembly audit data, the amount of financial accidents that occurred at the five major banks?KB Kookmin Bank, Shinhan Bank, Hana Bank, Woori Bank, and NongHyup Bank?from 2019 to July of this year totaled 99.193 billion KRW.
[Photo by Yonhap News]

In particular, last year, a 60 billion KRW embezzlement incident at Woori Bank and a 15 billion KRW real estate collateral loan document forgery case (breach of duty) at KB Kookmin Bank (currently under investigation, with loss amount not yet finalized) were significant in scale.

Among the financial accidents, embezzlement cases involving the misappropriation of customer deposits or company funds were the most frequent. Additionally, fraud by external parties and armed robbery incidents at overseas branches were also included in the financial accidents.

The amount recovered from the total financial accident losses was only 10.825 billion KRW. The recovery rate was low because the recognition of the incidents was delayed, which in turn delayed subsequent measures.

Regarding this, Representative Yoon Chang-hyun pointed out, "Although financial incidents such as embezzlement have been repeated over several years, detection is suspected to be just the 'tip of the iceberg,' and recovery is also extremely insufficient."

He added, "Until trust in finance enters a recovery phase, banks should significantly expand the implementation of mandatory leave systems for employees handling customer funds, and the Financial Supervisory Service should review the operation of effective systems."

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