Financial regulator accused of lax supervision of banking fees

Financial regulators have been glossing over commercial banks’ long-standing practice of charging customers irregular service fees on transactions via automated teller machines.

The Financial Services Commission recently held a low-key internal meeting to map out comprehensive measures to ease the growing financial burden of low- and middle-income households.

During the meeting composed of FSC senior officials, its chairman Kim Seok-dong commented on the high fees on money transfers or withdrawal via ATMs, sources said Wednesday.

“But it has been found that the participants reached a consensus that the FSC should prepare for appropriate excuses when the public or the media criticize regulators for lax supervision of banks,” a source said.

“It does not seem that the regulator will choose to put any pressure on banks to slash the fees.”

According to FSC officials, Kim is also taking a cautious approach toward the issue as there is a possibility that the regulatory body could face criticism if it engages in intervention in the market.

An FSC spokesman stressed that the financial authorities are not entitled to legally intervene in the fee-charging system of commercial banks, declining to mention future regulatory policies on the issue.

But observers in the market claimed that the policies have lost fairness.

“The FSC has continued to urge credit card companies to lower service fees to be charged on member stores for customers’ credit card usage,” a staffer in a financial company said.

Aside from the credit card usage, the regulator instructed credit card issuers to lower fees on member stores for customers’ “check card” usage on Wednesday.

Some banks charge fees on money transfers via ATMs 500 won per transaction, while some banks charge 1,500 won or 2,000 won.

Sources said there is a distinct possibility that the FSC will not include the banking-fee issue in its coming comprehensive measures for the debt-saddled low- and middle-income households.

The comprehensive measures will be unveiled as early as next month.

By Kim Yon-se (kys@heraldcorp.com)