FSC eases Internet-only bank rules

Financial authorities will ease regulations and lower entry barriers to encourage information technology companies to invest in Internet-only banks.

Nonfinancial companies will be allowed to hold up to a 50 percent stake in an Internet bank, up from the current 4 percent. The minimum equity capital level will be lowered to 50 billion won ($45 million), half the current requirement.

The Financial Services Commission said Thursday that it would alleviate the banking-commerce separation rule and the minimum equity capital standard, so that innovative companies may actively get involved in the financial industry.

“We decided to partially alleviate the separation of banking and commerce when it comes to Internet-only banks,” said financial services director Doh Kyu-sang.

Under the revised system, IT firms such as Naver and Daum Kakao will be able to own an Internet bank and provide financial services ranging from deposits and loans to foreign exchange transactions.

The FSC also pledged to minimize regulations in an effort to help companies come up with more diverse and creative business models.

But conglomerates with total assets of 5 trillion won or more will be excluded from the alleviated rules.

As the related revision bill is to be submitted to the National Assembly in September, the FSC is planning to keep a two-track approach ― to run one or two pilot cases within the year and to expand the range of application next year, once the bill is passed.

By Bae Hyun-jung (tellme@heraldcorp.com)