ICT firms to be allowed to own internet-only banks

South Korea’s financial regulator has submitted a bill to the National Assembly to allow tech firms -- such as game developer Nexon and Netmarble Games -- to become major shareholders of internet-only banks, officials said Wednesday.

The Financial Services Commission recently submitted the revision bill of the upcoming law on internet-only banks, seeking to ease the separation of banking and commerce, according to industry sources.

While attending a related parliamentary committee Wednesday, FSC Chairman Choi Jong-ku said that it would be “meaningful” for technology firms to be allowed shareholdership of internet-only banks.

The corresponding bill largely reflects the growing call from banking and information technology industries to lower barriers for internet-only bank ownership.

Naver, the country’s top internet portal operator, and Kakao, the company behind Korea’s No. 1 messenger app KakaoTalk, are also likely to benefit from the deregulation move.

Under the current banking law, a nonfinancial entity is banned from owning 4 percent of voting stocks in an internet-only bank, due to the banking-commerce separation rule.

This limit was introduced to prevent powerful conglomerates from abusing banks for their private funding. The rule, however, recently came under fire for failing to move in line with the changing reality of the industry, including the fast rise of internet-only banks.

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