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MUTUAL SAVINGS BANKS ACT — 법갈피

영문법령 / MUTUAL SAVINGS BANKS ACT

MUTUAL SAVINGS BANKS ACT

법률타법개정시행 2025-01-31금융위원회 · 제20434호 · 공포 2024-09-20

CHAPTER I GENERAL PROVISIONS

Article 1(Purpose) #

The purpose of this Act is to contribute to the growth of the national economy by guiding savings banks for sound operation to assist them in providing citizens and small and medium enterprises with greater convenience in receiving financial services, protecting customers, and maintaining credit system in good order.

[This Article Wholly Amended on Mar. 22, 2010]

Article 2(Definitions) #

The terms used in this Act are defined as follows:

1. The term "small and medium enterprise" means small and medium enterprises as defined in Article 2 (1) of the Framework Act on Small and Medium Enterprises;

2. The term "credit mutual aid deposit service" means a service for receipt and payment of mutual aid deposits provided under an agreement made with mutual aid members on condition that each member deposit mutual aid deposits in installments for a fixed number of units in an account for a fixed term on a regular basis until the amount of savings reaches a specific amount and the service provider shall, in turn, pay the money so deposited to the mutual aid members from each account by drawing lots, making a bid, or any other method;

3. The term "credit installment savings service" means a service of receipt and payment of installment savings provided under an agreement with an installment savings depositor under an agreement that the depositor shall deposit installment savings for a fixed term and the service provider shall pay a certain amount of money to the depositor earlier, than or at the expiration of the term;

4. The term "equity capital" means the aggregate of core capital and supplementary capital according to the standards set by the Bank for International Settlements, which is determined by the Financial Services Commission in accordance with the standards prescribed by Presidential Decree;

5. The term "deposits or similar" means mutual aid deposits, installment savings, deposits, installment deposits, and others prescribed by Presidential Decree;

6. The term "credit extension" means payments, loans, guarantees for payment, purchasing of securities in the nature of financial support, and other direct and indirect transactions of a mutual savings bank that are accompanied by credit risks in financial transactions, as specified further by Presidential Decree. In such cases, any credit extension made on a principal's account shall be deemed to be the credit extension made to the principal, regardless of in whose name it is made;

Article 6(Business license) #

(1) Any person who intends to carry out business activities as provided for in Article 11 (1) systematically and continuously for profit shall obtain a license from the Financial Services Commission, except as otherwise provided for in other statutes.

(2) Any person who desires to obtain a license under paragraph (1) (hereinafter referred to as "main license") shall file an application with the Financial Services Commission as prescribed by Presidential Decree.

(3) Any person who desires to obtain a main license under paragraph (2) may file an application for a preliminary license with the Financial Services Commission. In such cases, the Financial Services Commission shall review the application and inform the applicant of whether to grant a preliminary license within two months therefrom; provided, the Financial Services Commission may extend such period as prescribed by the Financial Services Commission.

(4) In granting a main license or preliminary license, the Financial Services Commission may attach conditions necessary for the sound management of a mutual savings bank and protection of customers.

(5) The Financial Services Commission shall, when a person who has obtained a preliminary license files an application for a main license, grant him or her the main license after confirming his or her implementation of the conditions set to his or her preliminary license.

(6) Necessary matters concerning further details, etc. of the procedures for granting a main license or preliminary license shall be prescribed by the Financial Services Commission.

(7) Any person who has obtained a main license or preliminary license for a mutual savings bank with conditions attached thereto as provided under paragraph (4) may file an application for the cancellation or change of the conditions under paragraph (4) with the Financial Services Commission, when there are changes in situation or legitimate grounds. In such cases, the Financial Services Commission shall decide on whether to cancel or change the conditions within two months therefrom and notify the applicant of the result in writing without delay.

[This Article Wholly Amended on Mar. 22, 2010]

Article 10-2(Matters subject to mandatory reporting) #

(1) Each mutual savings bank shall file a report with the Financial Services Commission in advance in any of the following cases: <Amended on Aug. 13, 2013; Aug. 14, 2018; Jan. 26, 2021; Jul. 18, 2023>

1. Where amending its articles of incorporation (excluding where it amends any insignificant matter prescribed by the Financial Services Commission);

2. Where changing a category or method of its business (excluding where it changes any insignificant matter prescribed by the Financial Services Commission);

3. Where transferring or acquiring part of a business;

4. Where relocating the principal office within the same business area, and such relocation falls under any of the following:

(a) When the relocation is made from an area under any subparagraph of Article 5 (2) to another area under any subparagraph of the same paragraph;

(b) When the relocation is made from a Metropolitan City to another Metropolitan City;

(c) When the relocation is made from a Special Self-Governing Province to a Do, or from a Do to a Special Self-Governing Province;

(d) When the relocation is made from a Do to another Do;

(e) When the relocation is made from a Special Self-Governing City to a Do or Special Self-Governing Province or from a Do or Special Self-Governing Province to a Special Self-Governing City;

5. It is necessary for protection of customers, as prescribed by Presidential Decree.

(2) The Financial Services Commission may recommend a mutual savings bank to correct or supplement the contents of a report filed under paragraph (1), if it finds that the contents violate relevant statutes or regulations or infringe on any right or interest of customers of the mutual savings bank. <Amended on Jan. 26, 2021>

(3) A mutual savings bank in receipt of a report under paragraph (1) shall review the details thereof and accept such report if it conforms to this Act. <Added on Jan. 26, 2021>

(4) A mutual savings bank shall file a report with the Financial Services Commission, as prescribed by the Financial Services Commission, in any of the following circumstances: <Amended on Jan. 26, 2021>

1. When any of the shareholders prescribed by Presidential Decree is changed;

2. When its largest shareholder is changed;

3. When shares held by its largest shareholder or persons specially related to him or her are changed by at least one percent of the total outstanding voting shares;

4. When it relocates its principal office or relocates or closes its branch office, etc. (excluding where a report shall be filed in advance in accordance with paragraph (1) 4);

5. When it suspends or resumes the business of its principal office or a branch office, etc.;

6. Deleted; <Jul. 31, 2015>

7. Other cases prescribed by Presidential Decree as they have a significant impact on the management of the mutual savings bank.

[This Article Wholly Amended on Mar. 22, 2010]

Article 10-6(Examination of qualifications of large shareholders) #

(1) A person who desires to hold more than 30/100 of the total outstanding voting shares in a mutual savings bank by acquiring or taking over voting shares of the mutual savings bank (which means de facto control over the relevant shares: hereafter referred to as "acquisition, etc." in this Article) or to become a large shareholder prescribed by Presidential Decree, shall meet the requirements prescribed by Presidential Decree for the prevention of financial accidents (hereafter referred to as "requirements for the prevention of financial accidents" in this Article), among the qualification requirement for a large shareholder under Article 6-2 (1) 4 and the detailed requirements for obtaining a license under paragraph (2) of the same Article, and shall obtain approval from the Financial Services Commission in advance.

(2) In cases where the acquisition, etc. of shares under paragraph (1) is caused by any grounds prescribed by Presidential Decree, such as the death of any incumbent large shareholder, the acquiring person shall file an application for approval with the Financial Services Commission within a period prescribed by Presidential Decree within three months from the date of acquisition, etc.

(3) The Financial Services Commission shall examine, at regular intervals prescribed by Presidential Decree, whether large shareholders prescribed by Presidential Decree meet the requirements prescribed by Presidential Decree (hereafter referred to as "requirements for maintaining eligibility for a large shareholder" in this Article), among the qualification requirement for a large shareholder under Article 6-2 (1) 4 and the requirements for the prevention of financial accidents. In such cases, the Financial Services Commission may, if necessary for an examination, request a mutual savings bank or its large shareholders to provide necessary materials or information.

(4) With regard to shares for which approval under paragraph (1) has not been granted or an application for approval under paragraph (2) has not been filed, the Financial Services Commission may issue an order to dispose of them within a prescribed period not exceeding six months.

(5) No person who has made an acquisition, etc. of shares without approval under paragraph (1) shall exercise his or her voting right in respect of the shares so acquired (including shares for which approval has not been granted by a person who made an acquisition, etc. of shares pursuant to paragraph (2)).

(6) With regard to large shareholders acknowledged as not fulfilling the requirements for maintaining eligibility for a large shareholder as a result of the examination conducted under paragraph (3), the Financial Services Commission may issue an order to meet such requirements within a prescribed period not exceeding six months.

(7) No large shareholder who has received an order under paragraph (6) shall exercise his or her voting right in respect of the shares held by him or her not less than 10/100 of the total outstanding voting shares in the mutual savings bank.

(8) In cases where a large shareholder who has received an order under paragraph (6) fails to comply with such order, the Financial Services Commission may order the large shareholder to dispose of the shares held by him or her not less than 10/100 of the total outstanding voting shares in the mutual savings bank within a prescribed period not exceeding six months.

(9) Other matters necessary for an approval, application for an approval, request for the provision of materials or information, and order as provided for in paragraphs (1) through (8) shall be prescribed by Presidential Decree.

[This Article Added on Mar. 22, 2010]

Article 11(Business activities) #

(1) A mutual savings bank may engage in the following business activities systematically and continuously for profit: <Amended on Aug. 13, 2013>

1. Credit mutual aid deposit service;

2. Credit installment savings service;

3. Receipt of deposits and installment deposits;

4. Extension of loans;

5. Discount of commercial notes;

6. Domestic and foreign exchange of money;

7. Receipt of deposits for safekeeping;

8. Agency service for collection and payment;

9. Intermediary or agency service for corporate mergers and purchases;

10. Agency service for the State, public organizations, and financial institutions;

11. Business affairs conducted on behalf of, or entrusted by, the Korea Federation of Savings Banks under Article 25;

12. Issuance and management of electronic means for debit payment under the Electronic Financial Transactions Act and settlement of payments therefor (In such cases, the scope of business shall be limited to where the business affairs of the Korea Federation of Savings Banks under Article 25-2 (1) 9 are jointly carried out);

13. Issuance, management, and sales of prepaid electronic means payment under the Electronic Financial Transactions Act and settlement of payments therefor (In such cases, the scope of business shall be limited to cases in which the business affairs of the Korea Federation of Savings Banks under Article 25-2 (1) 10 are jointly carried out);

14. Investment brokerage business, investment trade business, and trust business authorized by the Financial Services Commission under the Financial Investment Services and Capital Markets Act;

15. Installment financial business under the Specialized Credit Finance Business Act (only applicable to mutual savings banks that meet requirements prescribed by Presidential Decree, including financial soundness, etc., for the protection of customers, etc.);

16. Business activities incidental to those referred to in subparagraphs 1 through 15 or those required for achieving the purposes under Article 1, which are authorized by the Financial Services Commission.

(2) The minimum maintenance ratio of the aggregate of credit extensions to private individuals and small and medium enterprises within a business area to the amount of total credit, and further details to be observed otherwise by mutual savings banks in carrying out its business activities under paragraph (1) shall be prescribed by Presidential Decree.

(3) Each mutual savings bank shall facilitate convenience in financial services for ordinary citizens and small and medium enterprises in compliance with this Act and orders issued pursuant to this Act in carrying out its business activities under paragraph (1).

[This Article Wholly Amended on Mar. 22, 2010]

Article 12(Limits on extension of credit to individual borrowers) #

(1) A mutual savings bank may not extend credit to any individual borrower in excess of the limits prescribed by Presidential Decree within the extent of 20/100 of its equity capital, and the aggregate of credit extensions to an individual borrower extended by any mutual savings bank which is affiliated with the former and thus subject to the consolidated financial statement (hereinafter referred to as "same affiliated mutual savings bank"), as prescribed by the Financial Services Commission, shall not exceed the limits prescribed by Presidential Decree within the extent of 20/100 of its equity capital under the consolidated financial statement.

(2) The aggregate of large credit extensions to an individual borrower (excluding persons prescribed by Presidential Decree) may not exceed five times the equity capital of a mutual savings bank.

(3) No mutual savings bank may extend credit to any identical borrower in excess of the limits prescribed by Presidential Decree within the extent of 25/100 of its equity capital, and the aggregate of credit extensions to an identical borrower extended by a same affiliated mutual savings bank shall not exceed the limits prescribed by Presidential Decree within the extent of 25/100 of its equity capital under the consolidated financial statement.

(4) Paragraphs (1) through (3) shall not apply to the following cases as prescribed by Presidential Decree:

1. Where it is necessary for improving the national economy or raising the effectiveness in securing claims of a mutual savings bank or a same affiliated mutual savings bank;

2. Where a change in the equity capital of a mutual savings bank or a same affiliated mutual savings bank, a change in the composition of an identical borrower, or any other cause or event has caused the mutual savings bank or the same affiliated mutual savings bank to exceed the limits under paragraphs (1) through (3), although the bank has not extended additional credit;

3. Where a mutual savings bank or a same affiliated mutual savings bank extends the amount of credit which is directly required for the State, local governments, or public agencies prescribed by Presidential Decree in carrying out a local development project prescribed by Presidential Decree.

(5) In cases where a mutual savings bank or a same affiliated mutual savings bank happens to exceed the limits under paragraphs (1) through (3) due to a cause or event under paragraph (4) 2, the bank shall make efforts to comply with the limits within one year from the day on which it exceeds such limits.

(6) If there are unavoidable circumstances due to the maturity and amount, etc. of credit extended, a mutual savings bank or a same affiliated mutual savings bank may extend the period of time, notwithstanding paragraph (5), subject to the approval of the Financial Services Commission.

(7) A mutual savings bank or a same affiliated mutual savings bank that desires to obtain approval under paragraph (6) shall submit a detailed plan of its efforts to comply with the limits under paragraphs (1) through (3), no later than three months before the end of the period under paragraph (5), to the Financial Services Commission, and the Financial Services Commission shall make a decision as to whether to grant approval of the detailed plan within one month from the day on which the plan is submitted and shall notify the bank of its decision.

(8) The limits on credit extension of a same affiliated mutual savings bank shall be managed by a mutual savings bank which shall prepare the consolidated financial statement (hereinafter referred to as "holding mutual savings bank"), and the holding mutual savings bank may require the same affiliated mutual savings banks to submit data concerning the current state of their credit extensions within the scope of management purpose of their credit extension limits.

[This Article Wholly Amended on Mar. 22, 2010]

Article 18-2(Prohibited activities) #

(1) No mutual savings bank may engage in any of the following activities: <Amended on Aug. 13, 2013>

1. Investing in securities (excluding securities acquired by exercising a security right and securities prescribed by the Financial Services Commission in consideration of the stability of investment, the possibility of securitization within a short term, and the necessity of support for credit recovery or restructuring, etc.) in excess of its equity capital. In such cases, the Financial Services Commission may specially prescribe the limits of investment for each class of securities to ensure the sound management of mutual savings banks in consideration of the size of equity capital, etc.;

2. Owning any real estate other than real estate for business purposes; provided, this shall not apply to the acquisition of real estate by exercising its security rights;

3. Providing any guarantee for an obligation or offering any security (excluding provision of guarantee for an obligation or offering any security prescribed by Presidential Decree, as having significantly low credit risks in providing such guarantee or offering the security);

4. Extending credit, in a direct or indirect manner, for making the borrower purchase stocks of the mutual savings bank, or extending credit secured by the securities of the mutual savings bank;

5. Extending credit for speculating on products or securities;

6. Extending credit using another person's name;

7. Providing large shareholders under Article 37 (1) with money, services, or any other monetary gains without justifiable grounds; provided, Article 37 shall govern any prohibition of credit extension or provisional payment to large shareholders, etc.;

8. Extending credit, the total of which prescribed by Presidential Decree to a person prescribed by Presidential Decree participating in the same real estate development and supply project, the main financial resources for the repayment of which are earnings generated from the relevant real estate development and supply project, exceeds the limits prescribed by Presidential Decree within 25/100 of its equity capital;

9. Offering or selling subordinated bonds; provided, this shall not apply where a mutual savings bank that meets requirements prescribed by Presidential Decree, including financial soundness, offers or sells subordinated bonds by entrusting the offering or sale of subordinated bonds to a financial investment business operator who has obtained authorization for conducting an investment intermediary business of debt securities pursuant to Article 12 of the Financial Investment Services and Capital Markets Act;

10. Issuing subordinated bonds by private offering intended for ordinary investors (excluding large shareholders prescribed by Presidential Decree) under Article 9 (6) of the Financial Investment Services and Capital Markets Act;

11. Suspending the whole or part of business due to reasons not corresponding to any of the following:

(a) Relocation or closure of the principal office, a branch office, etc.;

(b) Suspension of the whole or part of business under this Act or statutes or regulations related to finance;

(2) No mutual savings bank in the same affiliation shall engage in any of the following activities: <Added on Aug. 13, 2013>

1. Investing in securities (excluding securities acquired by exercising a security right and securities prescribed by the Financial Services Commission in consideration of the stability of investment, the possibility of securitization within a short term, and the necessity of support for credit recovery or restructuring, etc.) in excess of its equity capital according to consolidated financial statements. In such cases, the Financial Services Commission may specially prescribe the limits of investment for each class of securities for the sound management of mutual savings banks in consideration of the size of equity capital, etc. according to consolidated financial statements;

2. Extending credit, the total of which prescribed by Presidential Decree to a person prescribed by Presidential Decree participating in the same real estate development and supply project, the main financial resources for the repayment of which are earnings generated from the relevant real estate development and supply project, exceeds the limits prescribed by Presidential Decree within 25/100 of its equity capital according to consolidated financial statements.

(3) Where a mutual savings bank or another mutual savings bank in the same affiliation exceeds the limits under paragraphs (1) and (2) due to reasons prescribed by Presidential Decree, including a change in its equity capital, it shall meet the limits within one year from the date it exceeds the limits; provided, it may extend such period upon obtaining approval from the Financial Services Commission under inevitable circumstances in consideration of the size of securities, the period of investment, etc. <Added on Aug. 13, 2013>

[This Article Wholly Amended on Mar. 22, 2010]

Article 18-3(Amendment of terms and conditions) #

(1) Each mutual savings bank shall protect the rights and interests of financial users and, when it enacts or amends any terms and conditions on financial transactions (hereinafter referred to as "terms and conditions"), report such enactments or amendments to the Financial Services Commission within 10 days after enacting or amending the terms and conditions; provided, in cases prescribed by Presidential Decree where the rights and duties of financial users are likely to be significantly affected, a mutual savings bank shall make a report to the Financial Services Commission in advance before enacting or amending any terms and conditions: <Amended on Dec. 31, 2018>

(2) Each mutual savings bank shall, whenever it enacts or amends its terms and conditions, make them public on its website, etc.

(3) In order to establish sound trade rules and prevent unfair terms and conditions from being widely used, the Chairperson of the Korea Federation of Savings Bank (which means the Korea Federation of Savings Bank established under Article 25; hereafter referred to as "Korea Federation" in this Article) may enact or amend standard terms and conditions which might serve as criteria for financial transactions in the mutual savings bank business (hereinafter referred to as the "standard terms and conditions").

(4) The Chairperson of the Korea Federation shall, whenever he or she enacts or amends the standard terms and conditions, report such enactments or amendments to the Financial Services Commission beforehand.

(5) The Financial Services Commission in receipt of a report under the proviso of paragraph (1) or paragraph (4) shall review the details of such report and accept it if it conforms to this Act. <Added on Jan. 26, 2021>

(6) The Financial Services Commission shall notify the Fair Trade Commission of the terms and conditions or the standard terms and conditions reported under paragraph (1) or (4). In such cases, if the Fair Trade Commission acknowledges that the terms and conditions or the standard terms and conditions so reported violate any provision of Articles 6 through 14 of the Act on the Regulation of Terms and Conditions, it may notify the Financial Services Commission thereof and require the Commission to take measures necessary for correcting such violation(s), and the Commission shall comply with the request in the absence of extraordinary circumstances. <Amended on Jan. 26, 2021>

(7) If the Financial Services Commission acknowledges that any terms and conditions or the standard terms and conditions violate this Act or other finance-related statutes or regulations, or might undermine the interests of financial users otherwise, it may order the relevant mutual savings bank or the Chairperson of the Korea Federation to amend the terms and conditions or the standard terms and conditions in written form detailing the violation or such. In such cases, the Financial Services Commission shall consult with the Fair Trade Commission before issuing such order for amendment. <Amended on Jan. 26, 2021>

[This Article Added on Mar. 22, 2010]

Article 18-4(Criteria for management of collective investment assets) #

(1) Where a private equity fund falls under any of the following when a mutual savings bank manages assets, the bank shall comply with criteria prescribed by Presidential Decree, such as the method for managing assets necessary for the sound management of assets:

1. Where beneficiaries, shareholders, partners, employees, etc. of a private equity fund (hereinafter referred to as "private equity fund") as defined in Article 9 (19) of the Financial Investment Services and Capital Markets Act are only comprised of the relevant mutual savings bank and persons specially related to it;

2. Where the percentage of collective investment securities (hereinafter referred to as "percentage of investment") held by the mutual savings bank among collective investment securities (hereinafter referred to as "collective investment securities") as defined in Article 9 (21) of the Financial Investment Services and Capital Markets Act issued by a private equity fund is at least 50/100;

3. Where a mutual savings bank manages assets by a money trust contract, the method of management of which is designated by the bank;

4. Other cases prescribed by Presidential Decree, corresponding to those referred to in subparagraphs 1 through 3.

(2) When the following subparagraphs are applied, assets, trusted assets, etc. of a private equity fund under each subparagraph of paragraph (1) shall be deemed assets held by a mutual savings bank or another mutual savings bank in the same affiliation to which the mutual saving bank belongs according to the percentage of investment, etc. of the relevant mutual savings bank in assets, trusted assets, etc. of the relevant private equity fund:

1. The limits of credit extension under Article 12 (1) through (3);

2. The limits of investment in securities under Article 18-2 (1) 1 and (2) 1;

3. Other matters prescribed by Presidential Decree, related to the management of assets, the soundness of management, etc. of the mutual savings bank.

(3) Detailed criteria for the scope and size of assets which are deemed held by a mutual savings bank or another mutual savings bank in the same affiliation pursuant to paragraph (2) shall be prescribed by Presidential Decree.

[This Article Added on Aug. 13, 2013]

Article 24(Administrative dispositions) #

(1) If a mutual savings bank or its executive officers or employees fall under any subparagraph of Appendix 1 or any subparagraph of Appendix of the Act on Corporate Governance of Financial Companies (limited to the measures falling under subparagraph 5), or falls under Article 51 (1) 4 or 5 of the Act on the Protection of Financial Consumers or the main clause, with the exception of the subparagraphs, of Article 51 (2) of the said Act as prescribed by Presidential Decree (limited to the measures falling under subparagraph 5), the Financial Services Commission may take any of the following measures: <Amended on Jul. 31, 2015; Apr. 18, 2017; Mar. 24, 2020>

1. Issuing a caution or warning to the mutual savings bank or demanding the bank to issue a caution, warning, or reprimand to the executive officers or employees concerned;

2. Issuing an order to correct such a violation;

3. Recommending the bank to remove the relevant executive officer (excluding operating officers under subparagraph 5 of Article 2 of the Act on Corporate Governance of Financial companies; hereafter the same applies in Article 35-3) or suspend the performance of his or her duties;

4. Recommending the Federation to dismiss the relevant employee (including an operating officer under subparagraph 5 of Article 2 of the Act on Corporate Governance of Financial Companies; hereafter the same applies in Article 35-3);

5. Suspending its business partially for a prescribed period of up to six months.

(2) If a mutual savings bank falls under any of the following cases, the Financial Services Commission may issue an order to suspend its business completely for a prescribed period of up to six months or revoke its business license: <Added on Aug. 13, 2013; Jul. 31, 2015; Mar. 24, 2020>

1. If the bank obtains the business license by fraud or other improper means;

2. If its equity capital has been completely impaired by deficits;

3. If the bank engage in an activity under any subparagraph of Article 10 (1) without authorization;

4. If the bank fails to comply with an order issued pursuant to paragraph (1) 2 for corrective measures;

5. If the bank continues its business during the business suspension period;

6. If the bank falls under any subparagraph of the Appendix of the Act on Corporate Governance of Financial Companies (limited to the case where complete suspension of its business is ordered);

7. If the bank engages in an activity falling under Article 18-2 (1) 11;

8. If the bank falls under Article 51 (1) 4 or 5 of the Act on the Protection of Financial Consumers;

9. If the bank falls under the main clause, with the exception of the subparagraphs, of Article 51 (2) of the Act on the Protection of Financial Consumers as prescribed by Presidential Decree (limited to where an order is issued to wholly suspend business);

10. Other cases where the bank violates statutes or regulations or articles of incorporation or is likely to harm the public interest significantly due to its poor financial status or business management.

[This Article Wholly Amended on Mar. 22, 2010]

Article 24-2(Business guidance) #

(1) Where a mutual savings bank falls under any of the following, the Financial Services Commission may provide business guidance for the protection of customers, including depositors, etc., the normalization of management and the preservation of property of the mutual savings bank. In such cases, the Financial Services Commission may require the Governor of the Financial Supervisory Service and the President of Korea Deposit Insurance Corporation established under Article 3 of the Depositor Protection Act (hereinafter referred to as "Korea Deposit Insurance Corporation") to dispatch its employees to the principal office, a branch office, etc. of the mutual savings bank and require them to reside there and jointly provide business guidance: <Amended on Aug. 13, 2013; Jul. 31, 2015>

1. If an inspection under Article 23 (1) reveals that the bank has extended credit to an individual borrower in excess of the limit, extended a large amount of credit illegally, or extended credit to a large shareholder, as prescribed by Presidential Decree;

2. If any of its executive officers becomes subject to a disposition under Article 24 (1) 1 or 3 (which shall be limited only to a disposition prescribed by Presidential Decree);

3. If it is deemed necessary to provide business guidance as a result of the inspection under Article 23 (1);

4. If the mutual savings bank becomes subject to a prompt corrective action pursuant to Article 10 of the Act on the Structural Improvement of the Financial Industry;

5. Other cases prescribed by Presidential Decree, where it is likely to interfere with the rights and interests of customers and order of the credit industry, such as the occurrence of bank runs.

(2) Matters necessary in relation to the prerequisites for the end, method, and time period of and procedure for the business guidance under paragraph (1) and other matters shall be prescribed by Presidential Decree.

[This Article Wholly Amended on Mar. 22, 2010]

[Title Amended on Aug. 13, 2013]

Article 24-3(Business administration) #

(1) If a mutual savings bank falls under any of the following circumstances, the Financial Services Commission may appoint an administrator without delay to assign him or her the business administration of the bank: <Amended on Mar. 24, 2020>

1. When it is found as a result of the inspection under Article 23 (1) that the illegal or non-performing credit extended by the mutual savings bank is likely to completely impair its capital and it is deemed difficult for the bank to promote business normalization on its own because it is not possible to collect such within a short period of time in an ordinary manner;

2. When there is any ground to revoke its business license under Article 24 (2) and the business administration is necessary for protecting depositors;

3. When it is deemed necessary to correct its business practices through business administration because the bank has been subject to the business guidance for a long time or repeatedly, or an order to take corrective measures against the bank was issued because of its violation of this Act or the Act on the Protection of Financial Consumers, but the bank has not taken corrective measures within a reasonable period of time;

4. When it is deemed necessary to subject the bank to business administration for protecting depositors because it has repeatedly extended credit or cross-extended credit as defined in Article 37 (1) or (2) to a person falling under any subparagraph of paragraph (1) of the said Article or the amount of credit extended to such person is excessive.

(2) Further specific conditions required for the business administration under paragraph (1) 1, 3, and 4 shall be prescribed by Presidential Decree.

(3) Once the business administration under paragraph (1) commences, the administrator shall inspect the current status of assets (hereinafter referred to as "actual inspection of assets") of the mutual savings bank without delay.

(4) The term for the business administration shall not exceed six months, but may be extended only once within the limit of six months, if the Financial Services Commission deems it inevitable for promoting business normalization; provided, the term for the business administration may be extended until a bankruptcy administrator is appointed in accordance with Article 355 of the Debtor Rehabilitation and Bankruptcy Act, in cases where an application for bankruptcy has been filed in accordance with Article 24-13.

(5) A mutual savings bank that becomes subject to business administration under paragraph (1) shall publicly announce the substance of the business administration without delay as prescribed by Presidential Decree.

(6) Articles 14-3 (2) and 14-6 (1) and (2) of the Act on the Structural Improvement of the Financial Industry shall apply mutatis mutandis to the appointment of an administrator under paragraph (1).

[This Article Wholly Amended on Mar. 22, 2010]

Article 24-5(Authority of administrator) #

(1) Any person who has an interest in or is specially related to a mutual savings bank may not be appointed as the administrator of such bank.

(2) Each administrator shall have the authority to carry out the business affairs of the mutual savings bank subject to the business administration and manage and dispose of its assets. In this case, the administrator may not assert his or her authority against a third party in performing any legal act such as disposition of assets of the bank, unless and until he or she completes registration under Article 24-6.

(3) Each administrator may, if necessary for securing claims for illegal and non-performing credit extensions, investigate into the assets of a person who is jointly liable for the obligations relating to deposits and similar in accordance with Article 37-3, a person who is liable for damage under Article 399 (1) or 414 (1) of the Commercial Act, or an obligor to take measures as may be necessary, including an application for provisional attachment.

(4) Each administrator may demand an executive officer or a large shareholder of the mutual savings bank concerned to submit a scheme for business normalization of the bank, including schemes for increasing capital and offering assets as additional security, within a prescribed period of not less than two weeks, but not exceeding one month.

(5) Each administrator shall, whenever he or she performs any act within the extent of his or her authority, indicate that such act is performed for the mutual savings bank subject to the business administration.

(6) An act performed without making the indication under paragraph (5) shall be deemed to be an act done for his or her own interest.

(7) The Financial Services Commission may, if deemed necessary, dismiss an administrator.

(8) Article 35 (1) of the Civil Act, Article 11 (1) of the Commercial Act, and Articles 30 and 360 through 362 of the Debtor Rehabilitation and Bankruptcy Act shall apply mutatis mutandis to the administrators. In such cases, the term "court" in Articles 30 and 360 through 362 of the Debtor Rehabilitation and Bankruptcy Act shall be construed as the "Financial Services Commission."

[This Article Wholly Amended on Mar. 22, 2010]

Article 25-2(Business) #

(1) The Federation shall carry out the following business activities in order to accomplish its purposes as defined in this Act:

1. Conducting research and surveys for the improvement and development of the business of mutual savings banks;

2. Carrying out business activities for encouraging business cooperation between mutual savings banks, establishing a sound credit system, and protecting their customers;

3. Receiving and managing deposits and deposits for reserve from mutual savings banks;

4. Granting loans to mutual savings banks, and purchasing commercial notes possessed or sold by mutual savings banks;

5. Providing mutual savings banks with the guarantee for performance of payment;

6. Providing domestic exchange services and carrying out business affairs commissioned by the State, a public organization, or a financial institution;

7. Offering, underwriting, and selling State bonds and local government bonds under Article 4 (3) of the Financial Investment Services and Capital Markets Act;

8. Establishing and operating subsidiaries for common interests of mutual savings banks or investing in any other corporation;

9. Issuing and managing electronic means for debit payment under the Electronic Financial Transactions Act and carrying out the settlement of payments therefor;

10. Issuing, managing, and selling electronic means for advance payment under the Electronic Financial Transactions Act and carrying out the settlement of payments therefor;

11. Carrying out business affairs entrusted by a national agency, local government, or any other public organization;

12. Carrying out business activities incidental to the business activities under subparagraphs 1 through 11;

13. Carrying out other business activities prescribed by Presidential Decree.

(2) The Federation shall, when it intends to carry out business activities under paragraph (1), prepare an operating manual as prescribed by Presidential Decree and shall obtain approval thereon from the Financial Services Commission. The foregoing shall also apply to any amendment to the manual.

[This Article Wholly Amended on Mar. 22, 2010]

Article 34-2(Vicarious exercise of authority) #

(1) The authority vested in the Financial Services Commission pursuant to Articles 23-11 (1) and (3) through (5), 24-2 (1), 24-3 (1) and (4), 24-4 (2), 24-5 (7) and (8), 24-6 (1), 24-7, 24-8 (1) and (2), 24-9 (3), 24-10, 24-11, 24-13, 24-14, and 24-15 may be delegated to the Governor of the Financial Supervisory Service, as prescribed by Presidential Decree, if deemed necessary for carrying out business activities efficiently with expertise in promoting business normalization of insolvent mutual savings banks. In such cases, the acts performed vicariously by the Governor of the Financial Supervisory Service shall be deemed to be those performed by the Financial Services Commission.

(2) The Governor of the Financial Supervisory Service shall, whenever he or she exercises any authority delegated pursuant to paragraph (1), indicate that he or she acts on behalf of the Financial Services Commission.

(3) Any act performed without making the indication under paragraph (2) shall be deemed to be an act done for his or her own interest.

(4) The Governor of the Financial Supervisory Service shall, whenever he or she acts on behalf of the Financial Services Commission pursuant to paragraph (1), report important matters to the Financial Services Commission.

(5) The standards and procedures for processing business affairs in connection with the vicarious exercise of the authority of the Financial Services Commission under paragraph (1) and other necessary matters may be prescribed by Presidential Decree.

(6) The Governor of the Financial Supervisory Service may, if necessary for vicariously exercising the authority for the business activities pursuant to paragraph (1), operate a council composed of representatives of the Korea Deposit Insurance Corporation, the Federation, and other related institutions.

(7) The Governor of the Financial Supervisory Service may, when he or she promotes business stabilization of an insolvent mutual savings bank under paragraph (1), request the heads of central administrative agencies to furnish him or her with informative materials as may be necessary. In such cases, the heads of central administrative agencies shall, upon receiving such request, comply with the request, absent any extraordinary circumstances.

[This Article Wholly Amended on Mar. 22, 2010]

Article 38-6(Extension of payment deadline for penalty surcharge and payment in installments) #

(1) The Financial Services Commission may defer the deadline for payment of a penalty surcharge imposed on a (hereinafter referred to as "person liable to pay a penalty surcharge") or allow the person to pay a penalty surcharge in installments pursuant to the proviso of Article 29 of the Framework Act on the Administration, and in such cases, the Financial Services Commission may require the person to provide security, if deemed necessary.

(2) If a person obligated to pay a penalty surcharge intends to obtain permission for the extension of the deadline for the payment of the penalty surcharge or the payment in installments under paragraph (1) shall file an application therefor with the Financial Services Commission no later than 10 days before the deadline for payment.

(3) If a person obligated to pay a penalty surcharge who has the deadline for payment extended or is permitted to pay in installments under paragraph (1) falls under any of the following subparagraphs, the Financial Services Commission may revoke the decision to extend the deadline for payment or to permit the payment in installments and may collect the penalty surcharge in a lump sum:

1. If the person obligated to pay a penalty surcharge fails to pay the penalty surcharge payable in installments by the deadline for payment;

2. Where he or she fails to comply with a request for the provision of security or commits an act that damages the value of the provided security;

3. If it is found that it is impossible to collect the whole amount or balance of a penalty surcharge due to forced execution, the commencement of an auction, the declaration of bankruptcy, the dissolution of the corporation concerned, or the disposition on the coercive collection of a national tax or delinquency of a local tax;

4. Where it is deemed possible to pay a penalty surcharge in a lump sum because the grounds prescribed in the subparagraphs of Article 29 of the Framework Act on the Administration cease to exist;

5. If any other cause or event equivalent to the causes and events under subparagraphs 1 through 4 has occurred.

(4) Matters necessary for the extension of the deadline for a penalty surcharge, payment in installments, provision of security, etc. other than those provided in paragraphs (1) through (3) shall be prescribed by Presidential Decree.

[This Article Wholly Amended on Sep. 14, 2023]

MUTUAL SAVINGS BANKS ACT

Article 1(Purpose) #

Article 2(Definitions) #

Article 3(Form of mutual savings banks) #

Article 4(Business area of mutual savings banks) #

Article 5(Capital of mutual savings banks) #

Article 6(Business license) #

Article 6-2(Requirements for licensing) #

Article 6-3(Public announcement of license) #

Article 7(Establishment of branch office and local office) #

Article 8 #

Article 9(Use of title) #

Article 10(Authorization of dissolution and merger) #

Article 10-2(Matters subject to mandatory reporting) #

Article 10-3 #

Article 10-4 #

Article 10-5 #

Article 10-6(Examination of qualifications of large shareholders) #

Article 11(Business activities) #

Article 12(Limits on extension of credit to individual borrowers) #

Article 12-2(Prerequisites for acquisition of stocks issued by large shareholders) #

Article 12-3(Prohibition on improper influence of large shareholders) #

Article 13(Credit Screening Committee) #

Article 14 #

Article 14-2(Request for reduction in interest rate) #

Article 15(Retaining assets for reserves) #

Article 16 #

Article 17(Restriction on borrowings) #

Article 18(Management of surplus funds) #

Article 18-2(Prohibited activities) #

Article 18-3(Amendment of terms and conditions) #

Article 18-4(Criteria for management of collective investment assets) #

Article 18-5 #

Article 18-6(Autonomous deliberation on advertising) #

Article 18-7(Duty of taking measures to protect employees providing face-to-face customer service) #

Article 19(Disposal of income) #

Article 20 #

Article 21(Dissolution) #

Article 22(Supervision) #

Article 22-2(Standards for soundness in business management) #

Article 22-3 #

Article 22-4(Requests to mutual savings banks for data) #

Article 22-5(Submission of business reports) #

Article 22-6(Inspection of large shareholders) #

Article 23(Inspections) #

Article 23-2(Disclosure of business management) #

Article 23-3(Report of illegal acts and protection of reporters) #

Article 23-4 #

Article 23-5 #

Article 23-6 #

Article 23-7 #

Article 23-8 #

Article 23-9 #

Article 23-10 #

Article 23-11(Liquidation) #

Article 24(Administrative dispositions) #

Article 24-2(Business guidance) #

Article 24-3(Business administration) #

Article 24-4(Suspension of payment) #

Article 24-5(Authority of administrator) #

Article 24-6(Notice and registration of business administration) #

Article 24-7(Cessation of business administration) #

Article 24-8(Demand for transfer of contracts) #

Article 24-9(Agreement and authorization on transfer of contracts) #

Article 24-10(Requests for financial aid) #

Article 24-11(Decision on transfer of contracts) #

Article 24-12(Effect and public announcement of transfer of contract) #

Article 24-13(Application for bankruptcy) #

Article 24-14(Nomination of auditor) #

Article 24-15(Coordination in promotion of business normalization) #

Article 25(Establishment) #

Article 25-2(Business) #

Article 25-3(Articles of incorporation) #

Article 25-4(Executive officers) #

Article 25-5(Membership fees) #

Article 25-6(Accounting principles) #

Article 25-7 #

Article 25-8 #

Article 25-9(Borrowings) #

Article 25-10(Appointment of agents) #