Expansion of Financial Cooperation with India and Vietnam: QR Payment Linkage and IBK's Local Entry

Lee Eogwon, Chairman of the Financial Services Commission, expanded financial diplomacy during his visits to India and Vietnam, thereby broadening the foundation for Korean financial companies to enter overseas markets. The Commission is pursuing cooperation with India and Vietnam on QR payment systems, aiming to allow citizens of both countries to make immediate payments using their domestic mobile payment apps without the need for currency exchange. Additionally, Industrial Bank of Korea (IBK) received final approval from the State Bank of Vietnam to establish a local subsidiary, marking a full-fledged entry into the Vietnamese market after nine years.

On the 24th, Chairman Lee held a meeting with Pham Duc An, the newly appointed Governor of the State Bank of Vietnam since the 8th, to discuss ways to strengthen financial cooperation between the two countries and support the advance of our financial companies. Provided by the Financial Services Commission.

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According to the Financial Services Commission on April 26, Chairman Lee accompanied the presidential delegation from April 19 to 25, holding high-level meetings, financial cooperation forums, and local roundtable sessions in India and Vietnam. The visit was aimed at concretizing strategic cooperation with two rapidly growing countries, specifically in the financial sector.

In India, the establishment of a foundation for financial infrastructure cooperation was highlighted as a key achievement. The Financial Services Commission and the Financial Supervisory Service signed a memorandum of understanding (MOU) on financial hub cooperation with the International Financial Services Centres Authority (IFSCA) of India, formalizing cooperation between Seoul, Busan, and India’s GIFT City. This enables the sharing of policy experience and information for the development of financial hubs, and establishes an institutional framework to strengthen connectivity between the financial markets of both countries. Furthermore, through collaboration on payment and settlement, a foundation was established to directly link Korea’s QR payment system with India’s digital payment infrastructure, the Unified Payments Interface (UPI).

Progress was also made in payment infrastructure cooperation. With the signing of an MOU for QR payment linkage between the payment and settlement institutions of both countries, the service is expected to launch within the year. Once operational, nationals of both countries will be able to use their existing mobile payment apps for immediate payments while visiting the other country, without separate currency exchange. In addition, lower transaction fees compared to international credit cards are anticipated to reduce costs by around 2 percentage points per transaction.

In Vietnam, both the expansion of Korean financial companies and the deepening of cooperation progressed simultaneously. Chairman Lee met with Pham Duc An, Governor of the State Bank of Vietnam, to express appreciation for the recent approval of Korea Development Bank’s Hanoi branch and IBK’s local subsidiary, and requested active consideration for additional approvals involving NongHyup Bank and NICE Information Service. He particularly emphasized that NongHyup Bank’s expertise in agricultural finance and NICE Information Service’s credit evaluation infrastructure could contribute to the development of Vietnam’s financial industry. The Vietnamese side also acknowledged Korea as a strategic partner and stated that related approvals would be prioritized.

The two countries also agreed to further strengthen digital financial cooperation. For the convenience of approximately 4.8 million annual mutual visitors, both sides agreed to complete QR payment linkage between the two countries within this year. They also committed to sharing Korea’s expertise in managing non-performing loans, based on its experience overcoming the foreign exchange crisis, with the goal of jointly promoting financial market stability and development.

Policy and market cooperation were also advanced through the Financial Cooperation Forum. At the Korea-Vietnam Financial Cooperation Forum held in Hanoi, over 150 officials from both countries’ financial authorities and companies discussed cooperation agendas such as capital market infrastructure, insurance systems, payment infrastructure, and the non-performing loan market. In the presence of Chairman Lee, a ceremony was held to present the approval certificate for IBK’s local subsidiary in Vietnam, and an agreement signing ceremony for QR payment linkage between Korea Financial Telecommunications & Clearings Institute and NAPAS was also conducted, making the achievements of cooperation visible.

IBK obtained final approval from the State Bank of Vietnam to establish a local subsidiary, a result achieved approximately nine years after applying for a license in 2017. This is a significant milestone, given Vietnam’s restrictive issuance of new banking licenses, and IBK plans to expand financial support for local small and medium-sized enterprises with the goal of launching the subsidiary in October. The Financial Services Commission intends to use this visit as an opportunity to further expand financial cooperation with major emerging countries, including India and Vietnam, and to continue strengthening practical financial infrastructure cooperation, such as QR payment linkage, that citizens can experience firsthand.

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