BANKING ACT

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BANKING ACT — 법갈피

Article 8(Authorization of Banking Business) #

(1) Any person who intends to engage in banking business shall obtain authorization from the Financial Services Commission.

(2) Any person who intends to obtain authorization for banking business pursuant to paragraph (1) shall meet all of the following requirements: <Amended on Aug. 13, 2013; Jul. 31, 2015>

1. The person shall have a capital of at least 100 billion won: Provided, That a local bank's required capital may be at least 25 billion won;

2. A plan for raising funds required for the management of the banking business shall be appropriate;

3. A plan for shareholder composition shall be in compliance with Articles 15, 15-3 and 16-2;

4. Large shareholders shall have sufficient investment capabilities, sound financial conditions and social creditability;

5. The person shall have a feasible and sound business plan;

6. The person’s incorporators (limited to cases where incorporators are individuals) and executive officers shall meet the requirements under Article 5 of the Act on Corporate Governance of Financial Companies;

7. The person shall have human resources, business facilities, computer systems and other physical facilities sufficient to manage banking business.

(3) Necessary details concerning the requirements, etc. referred to in paragraph (2) shall be prescribed by Presidential Decree.

(4) The Financial Services Commission may impose necessary conditions for stabilizing financial markets, securing the soundness of banks and protecting depositors in granting authorization under paragraph (1).

(5) A person who has obtained conditional authorization under paragraph (4) may file an application with the Financial Services Commission for the revocation or modification of the imposed conditions where his or her circumstances have changed or other justifiable grounds exist. In such cases, the Financial Services Commission shall decide whether to revoke or modify the imposed conditions within two months, and promptly inform the applicant of the result thereof in writing.

[This Article Wholly Amended on May 17, 2010]

Article 15(Limits on Stock-Holding by Same Person) #

(1) No same person shall hold stocks of a bank in excess of 10/100 of the total number of its issued voting stocks: Provided, That this shall not apply in any of the following cases and cases falling under paragraph (3) and Article 16-2 (3):

1. Where the Government or the Korea Deposit Insurance Corporation established under the Depositor Protection Act holds stocks of a bank;

2. Where the same person holds not more than 15/100 of the total number of issued voting stocks of a local bank.

(2) In any of the following cases, the same person (excluding persons prescribed by Presidential Decree), he or she shall report to the Financial Services Commission the matters prescribed by Presidential Decree that are necessary for verifying changes in the status or ratio of stockholding of a bank: <Amended on Jul. 24, 2015; Apr. 20, 2021>

1. Where the same person holds stocks of a bank (excluding a local bank; hereafter in this paragraph the same shall apply) in excess of 4/100 of the total number of its voting stocks;

2. Where the same person under subparagraph 1 becomes the largest shareholder of the relevant bank;

3. Where the ratio of stockholding by the same person under subparagraph 1 changes by at least 1/100 of the total number of voting stocks of the relevant bank;

4. Where there is a change in partners of a private equity fund exclusive for institutions that holds more than 4/100 of the total number of voting stocks of a bank;

5. Where there is a change in shareholders or partners of a special purpose company that holds more than 4/100 of the total number of voting stocks of a bank (including cases where there is a change in partners of the private equity fund exclusive for institutions that is a shareholder or partner of the relevant special purpose company).

(3) Notwithstanding the main clause, with the exception of the subparagraph, of paragraph (1), the same person may hold stocks of a bank by obtaining approval from the Financial Services Commission, whenever the following limits are exceeded: Provided, That the Financial Services Commission may grant approval by setting the separate stockholding limits, other than those specified in each subparagraph only where it is deemed necessary based on the possibility of enhancing the efficiency and soundness of banking business, the stock distribution of shareholders of the relevant bank, etc., and if the same person intends to hold stocks in excess of the approved limit, he or she shall obtain approval again from the Financial Services Commission:

1. The limit specified in the main clause, with the exception of the subparagraph, of paragraph (1) (the limit specified in paragraph (1) 2 in cases of a local bank);

2. 25/100 of the total number of voting stocks of the relevant bank.

3. 33/100 of the total number of voting stocks of the relevant bank.

(4) Where the Financial Services Commission decides not to grant approval under paragraph (3), it shall notify the applicant thereof specifying the reasons therefor within the period prescribed by Presidential Decree.

(5) Procedures, methods and detailed standards for reporting in applying paragraph (2), and the qualifications for any person capable of holding stocks of a bank, the requirements and procedures for approval related to stockholding in applying paragraph (3), and other necessary matters shall be prescribed by Presidential Decree in consideration of the following matters:

1. The possibility of undermining the soundness of the relevant bank;

2. The propriety of the scale of assets and the financing standing;

3. The size of credit granting from the relevant bank;

4. The possibility of enhancing the efficiency and soundness of banking business.

(6) Where an investment company holds stocks of a bank by obtaining approval under paragraph (3), Article 81 (1) 1 (a) through (c) of the Financial Investment Services and Capital Markets Act shall not apply to the investment company.

(7) In any of the following cases, the Financial Services Commission may grant approval to the relevant bank even if the bank fails to meet the requirements for approval under paragraph (5): <Amended on Dec. 22, 2015>

1. Where the bank is an insolvent financial institution under subparagraph 2 of Article 2 of the Act on the Structural Improvement of the Financial Industry;

2. Where the bank is an insolvent financial company under subparagraph 5 of Article 2 of the Depositor Protection Act;

3. Where the bank is an insolvent-threatened financial company under subparagraph 6 of Article 2 of the Depositor Protection Act;

4. Cases determined and publicly announced by the Financial Services Commission, such as a failure to comply with standards for managerial instructions under Article 34 (2).

(8) The Financial Services Commission or a bank may request the shareholders of the bank to present necessary data in order to verify the same persons who hold the stocks of the bank and the scope of the stocks held by such same persons.

(9) Necessary matters concerning requests for the presentation of data under paragraph (8) shall be prescribed by Presidential Decree.

[This Article Wholly Amended on May 17, 2010]

Article 15-3(Approval for Holding of Stocks of Private Equity Funds Exclusive for Institutions, etc.) #

(1) Deleted. <Aug. 13, 2013>

(2) A private equity fund exclusive for institutions or a special purpose company that wishes to obtain approval under Article 15 (3) (hereinafter referred to as "private equity fund exclusive for institutions, etc.") shall meet all the following requirements: <Amended on Aug. 13, 2013; Jul. 24, 2015; Apr. 20, 2021>

1. Requirements for the executive officer of a private equity fund exclusive for institutions:

(a) It, as a corporation, shall not be a person specially related to another partner or shareholder of a private equity fund exclusive for institutions, etc. for which it serves as executive partner or to whom the management of its property is entrusted;

(b) It shall have adequate ability, experience, and social credibility to the extent that it can preclude any other partner or shareholder of the private equity fund exclusive for institutions, etc. which it serves as executive partner or to whom the management of its property is entrusted, from exercising control over stocks or shares that are the property of the relevant private equity fund exclusive for institutions, etc.;

2. Other requirements prescribed by Presidential Decree in consideration of the impact that the holding of stocks of the private equity fund exclusive for institutions, etc. has on the soundness of the relevant bank.

(3) Where the Financial Services Commission deems it necessary for verifying whether a private equity fund exclusive for institutions, etc. fulfills the requirements under paragraph (2) in order to conduct an examination for approval under Article 15 (3), it may request the private equity fund exclusive for institutions, etc. or the executive partner responsible for management of its property, etc. to provide the information or data prescribed by Presidential Decree, such as the articles of association of the relevant private equity fund exclusive for institutions, etc. and terms and conditions of contracts concluded by and among its shareholders or partners. <Amended on Aug. 13, 2013; Jul. 24, 2015; Apr. 20, 2021>

(4) Where the Financial Services Commission decides not to grant approval under Article 15 (3), it shall notify the applicant thereof, specifying the reasons therefor, within the period prescribed by Presidential Decree. <Amended on Aug. 13, 2013>

(5) Deleted. <Aug. 13, 2013>

(6) Where the Financial Services Commission grants approval pursuant to Article 15 (3), it may impose necessary conditions in connection with involvement of the relevant private equity fund exclusive for institutions, etc. in the management, etc. of the bank, if the relevant private equity fund exclusive for institutions, etc. is highly likely to exercise a de facto influence on major management issues of the relevant bank, in consideration of such factors as the distribution and composition of shares held by shareholders of the relevant bank, the composition of partners or shareholders of the relevant private equity fund exclusive for institutions, etc.. <Amended on Aug. 13, 2013; Jul. 24, 2015; Apr. 20, 2021>

(7) Procedures for approval and methods of examining approval under Article 15 (3), detailed criteria for the requirements referred to in paragraph (2), and other necessary matters shall be prescribed by Presidential Decree. <Amended on Aug. 13, 2013>

[This Article Wholly Amended on May 17, 2010]

[Title Amended on Jul. 24, 2015; Apr. 20, 2021]

Article 16(Restrictions on Voting Rights of Limit Excess Stocks) #

(1) Where the same person holds stocks of a bank in excess of the stockholding limits referred to in Article 15 (1) and (3) or 16-2 (1) and (2), such person shall exercise no voting rights on the stocks held in excess of the limits under Article 15 (1) and (3) or 16-2 (1) and (2); and shall take measures to meet the limits, without delay. <Amended on Aug. 13, 2013>

(2) In any of the following cases as a consequence of conversion of contingent bonds convertible into a bank's stocks, issued under Article 33 (1) 3, into the bank's stocks, the same person shall comply with the following subparagraphs, notwithstanding paragraph (1): <Newly Inserted on Mar. 29, 2016>

1. Where the person holds stocks of a bank in excess of the stockholding limits under Article 15 (1) and (3): The person shall complete all the following procedures and shall exercise no voting right on the stocks held in excess of the stockholding limits until such procedures are completed:

(a) The person shall report the holding of stocks of a bank in excess of the limits under Article 15 (1) and (3) to the Financial Services Commission within the period specified by Presidential Decree;

(b) The person shall complete either of the following measures within the period specified by Presidential Decree: Provided, That the period may be extended with approval thereof from the Financial Services Commission by not more than six months, in extenuating circumstances:

(i) Measures to obtain the approval under Article 15 (3) from the Financial Services Commission;

(ii) Measures not to exceed the limits set under Article 15 (1) and (3);

2. Where a person holds stocks of a bank in excess of the stockholding limit under Article 16-2 (1) (excluding cases of a local bank) but holds such stocks within the stockholding limit under Article 16-2 (2): The person shall exercise no voting right on the stocks held in excess of the stockholding limit and complete all the following procedures:

(a) The person shall report the holding of stocks of a bank in excess of the limit under Article 16-2 (1) to the Financial Services Commission within the period specified by Presidential Decree;

(i) Measures to obtain the approval under Article 16-2 (2) from the Financial Services Commission;

(ii) Measures not to exceed the limits under Article 16-2 (1);

3. Where a person holds stocks of a bank in excess of the stockholding limit under Article 16-2 (1) (limited to a local bank) or of the stockholding limit under Article 16-2 (2): The person shall exercise no voting right on the stocks held in excess of the stockholding limit and shall take measures to meet the limits, without delay.

(3) If the same person fails to comply with paragraph (1) or (2), the Financial Services Commission may order the person to dispose of the stocks held in excess of the limit within a specified period of not more than six months. <Amended on Aug. 13, 2013; Mar. 29, 2016>

(4) The procedure, method, etc. for reporting under paragraph (2) 1 (a) and 2 (b) shall be determined and publicly announced by the Financial Services Commission. <Newly Inserted on Mar. 29, 2016>

[This Article Wholly Amended on May 17, 2010]

Article 16-2(Restrictions on Stockholding by Non-Financial Investors) #

(1) No non-financial investor (including a person who is excluded from an enterprise group subject to the limitations on mutual contribution, etc. under Article 32 of the Monopoly Regulation and Fair Trade Act and so ceases to be a non-financial investor, but for whom a period prescribed by Presidential Decree has not yet passed since the date of the exclusion; hereafter in paragraph (2) the same shall apply) may hold more than 4/100 of the total number of outstanding voting stocks of a bank (15/100 in cases of a local bank), notwithstanding Article 15 (1). <Amended on Aug. 13, 2013; Dec. 29, 2020>

(2) Notwithstanding paragraph (1), if a non-financial investor obtains approval from the Financial Services Commission for stocks of a bank he or she intends to hold beyond the limit set out in paragraph (1) (excluding cases related to a local bank) on condition that he or she will not exercise his or her voting rights in the stocks, after satisfying the requirements prescribed by Presidential Decree including financial soundness, he or she may hold such stocks up to the limit set in the main clause, with the exception of the subparagraph, of Article 15 (1).

(3) The main clause, with the exception of the subparagraph, of Article 15 (1) and paragraph (3) of the same Article shall apply to any of the following non-financial investors, notwithstanding paragraphs (1) and (2): <Amended on Aug. 13, 2013>

1. A non-financial investor who has submitted to the Financial Services Commission a plan for converting itself into a person who is not a non-financial investor within two years (hereinafter referred to as "conversion plan") and has obtained approval therefor;

2. A non-financial investor who holds stocks within the scope of the stockholding ratio of a bank by a foreigner under the Foreign Investment Promotion Act (hereinafter referred to as "foreigner");

3. A non-financial investor who has obtained approval from the Financial Services Commission by satisfying the following requirements as a fund under Article 5 of the National Finance Act or a juristic person managing and operating the fund (including such juristic persons entrusted with the management and operation of the fund by law; hereafter referred to as "fund, etc." in this subparagraph):

(a) To equip itself with systems prescribed by Presidential Decree in order to prevent potential conflicts of interest between the fund, etc. holding stocks of banks and the interested parties, such as depositors and other shareholders of the banks;

(b) To undergo supervision or inspections from an agency determined and announced by the Financial Services Commission within the necessary extent to prevent conflicts of interest referred to in item (a);

(c) Other requirements prescribed by Presidential Decree considering the effect of the fund, etc.'s stockholding on the soundness of a bank.

(4) Where a non-financial investor exceeds the ratio of stockholding by a foreigner as a result of holding stocks of a bank under paragraph (3) 2, he or she shall not exercise voting rights in the excess stocks.

(5) The Financial Services Commission may order a non-financial investor to dispose of the stocks held in excess under paragraph (4) within a specified period of not more than one year: Provided, That if the Financial Services Commission deems it inevitable in light of the number of stocks held in excess by a non-financial investor and the situation of the securities market, etc., it may extend the period for disposing of the stocks within a specified limit.

(6) The number of banks, the stocks of which may be held by a non-financial investor under paragraph (3) 2 shall be limited to one.

(7) Requirements for approval of the conversion plan under paragraph (3) 1 and procedures for and methods of approval referred to in paragraph (3) 3 and other matters necessary for the examination for approval shall be prescribed by Presidential Decree.

[This Article Wholly Amended on May 17, 2010]

Article 16-3(Appraisal and Inspections of Conversion Plans) #

(1) Any non-financial investor who intends to apply for approval under Article 16-2 (3) 1 shall submit a conversion plan to the Financial Services Commission, and if it is necessary for a specialized institution to appraise the conversion plan, the Financial Services Commission may have the specialized institution conduct such appraisal, as determined by the Financial Services Commission.

(2) The Financial Services Commission shall regularly inspect the implementation status of a conversion plan by a non-financial investor (hereinafter referred to as "person subject to conversion") who holds stocks of a bank in excess of the limit set in Article 16-2 (1) with approval on the conversion plan under paragraph (3) 1 of the same Article, as prescribed by Presidential Decree, and shall publicly announce its results on its website and through other media.

(3) Where the Financial Services Commission deems that a person subject to conversion fails to implement such conversion plan as a result of an inspection under paragraph (2), it may order him or her to implement it within a fixed period of not more than six months.

(4) No person subject to conversion falling under any of the following subparagraphs may exercise the voting rights of the stocks of a bank held by himself/herself in excess of the limit set in Article 16-2 (1):

1. Any person subject to conversion who is in receipt of an order for implementation under paragraph (3) from the Financial Services Commission;

2. Any person subject to conversion who is found to have engaged in an illegal transaction with a bank through the inspection by the Governor of the Financial Supervisory Service under Article 43-2 (1) due to any cause referred to in Article 48-2 (1) 1 (b).

(5) Where a person subject to conversion falls under any of the following subparagraphs, the Financial Services Commission may order him or her to dispose of the stocks of a bank held in excess of the limit set in Article 16-2 (1) within a specified period of not more than six months:

1. Where he or she fails to comply with an order for execution under paragraph (3);

2. Where he or she falls under paragraph (4) 2.

[This Article Wholly Amended on May 17, 2010]

Article 16-4(Examination of Qualifications of Shareholders, etc. Holding Stocks in Excess of Limit) #

(1) The Financial Services Commission shall examine whether a person holding stocks of a bank under Articles 15 (3) and 16-2 (3) (hereafter in this Article referred to as "shareholder, etc. holding stocks in excess of limit") continues to meet the qualifications and approval requirements under Article 15 (5) and 15-3 (7) (hereafter in this Article referred to as "excess holding requirements, etc.") even after acquiring such stocks, as prescribed by Presidential Decree. <Amended on Aug. 13, 2013>

(2) The Financial Services Commission may, where necessary for the examination referred to in paragraph (1), request a bank or a shareholder, etc. holding stocks in excess of limit to furnish necessary data or information.

(3) Where the Financial Services Commission deems that a shareholder, etc. holding stocks in excess of limit has failed to meet the excess holding requirements, etc., based on the findings of the examination under paragraph (1), it may order him or her to meet such requirements within a specified period of not more than six months.

(4) No shareholder, etc. holding stocks in excess of limit, upon receipt of an order under paragraph (3), may exercise any voting right on the stocks of a bank held in excess of the limit set in Article 15 (3) 1 (referring to the limits set in Article 16-2 (1), if such shareholder, etc. holding stocks in excess of limit is a non-financial investor; hereafter in paragraph (5) the same shall apply) before he or she complies with such order. <Amended on Aug. 13, 2013>

(5) Where a shareholder, etc. holding stocks in excess of limit in receipt of an order under paragraph (3) fails to comply with the order, the Financial Services Commission may order him or her to dispose of the stocks of a bank held by himself/herself in excess of the limit set in Article 15 (3) 1 within a specified period not exceeding six months.

(6) Where the Financial Services Commission examines whether a person satisfies excess holding requirements, etc. under paragraph (1), it shall examine whether a person falling under Article 16-2 (3) 3 satisfies the requirements under the items of the same subparagraph.

[This Article Wholly Amended on May 17, 2010]

Article 27-2(Operation of Incidental Services) #

(1) A bank may be engaged in all services incidental to banking services (hereinafter referred to as "incidental services").

(2) Where a bank intends to be engaged in incidental services, it shall file a report thereon with the Financial Services Commission within seven days prior to the date on which it intends to start such services: Provided, That it may be engaged in the services provided for in the following among the incidental services without reporting thereon:

1. Guarantee of debts or takeover of notes;

2. Mutual savings;

3. Factoring (referring to purchase and recovery of bonds on sales price of a company and affairs related thereto);

4. Safeguard deposits;

5. Execution of collection and payment as an agent;

6. A credit depository of a local government as an agent;

7. Execution of payment related to electronic commercial transactions as an agent;

8. Sale and lease of computer systems and software related to banking business;

9. Training on finance and publication of books and periodicals on finance;

10. Surveys and research on finance;

11. Other incidental services to banking services prescribed by Presidential Decree.

(3) Where a bank files a report under paragraph (2), such report shall be accompanied by documents prescribed by Presidential Decree, such as business plans, documents on a profit and loss forecast, etc.

(4) Where the reported details under paragraph (2) fall under any of the following cases, the Financial Services Commission may order the restriction or correction of the relevant incidental services:

1. Where the reported details undermine soundness in the management of the bank in question;

2. Where the reported details cause hindrance to the protection of bank users, such as depositors, etc.;

3. Where the reported details undermine the stability of financial markets, etc.

(5) The Financial Services Commission shall give public announcement of the incidental services reported under paragraph (2) and the incidental services subject to a restriction or corrective order under paragraph (4) on its website according to the method and procedure prescribed by Presidential Decree.

[This Article Newly Inserted on May 17, 2010]

Article 33(Issuance of Bank Debentures) #

(1) A bank may issue the following debentures (hereinafter referred to as "bank debentures") within the limit specified by Presidential Decree by up to five times its equity capital: Provided, That the debentures under subparagraph 4 may be issued only by an unlisted bank (referring to a bank not listed on a stock exchange under Article 9 (15) 4 of the Financial Investment Services and Capital Markets Act; the same shall apply hereinafter):

1. Debentures issued under the Commercial Act;

2. Debentures issued under the condition that the issuer shall be discharged from the obligation to redeem the debentures and pay interest thereon upon the occurrence of any of the trigger events pre-specified (hereinafter referred to as "trigger events") according to objective and reasonable standards as at the time of issuing the debentures (hereinafter referred to as "write-down contingent convertible bonds"), among debentures issued under Article 165-11 (1) of the Financial Investment Services and Capital Markets Act;

3. Debentures issued under the condition that the debentures shall be converted into stocks of a bank upon the occurrence of any of the trigger events specified as at the time of issuing the debentures (hereinafter referred to as "contingent bonds convertible into stocks of a bank"), among debentures issued under Article 165-11 (1) of the Financial Investment Services and Capital Markets Act;

4. Debentures issued under the condition that the debentures shall be converted into stocks of a unlisted bank upon the occurrence of any of the trigger events as at the time of issuing the debentures; and the converted stocks shall be exchanged with stocks of a bank holding company listed on the stock exchange (referring to a bank holding company listed on the stock exchange established under Article 9 (15) 3 of the Financial Investment Services and Capital Markets Act, which holds all outstanding stocks of the unlisted bank as at the time of issuing the relevant debentures; the same shall apply hereinafter) simultaneously (hereinafter referred to as "contingent bonds convertible into stocks of a bank holding company"), among debentures different in type from debentures issued under Articles 469 (2), 513, and 516-2 of the Commercial Act;

5. Other debentures specified by Presidential Decree as those similar to the debentures referred to in subparagraphs 1 through 4.

(2) Necessary matters concerning the conditions, methods, etc. of the issuance of bank debentures shall be prescribed by Presidential Decree.

(3) If a bank issues bank debentures without a resolution by the board of directors or the general meeting of shareholders under Article 33-2 or 33-3, the Financial Services Commission may issue an order to prohibit the bank from issuing bank debentures for a specified period not exceeding six months.

[This Article Wholly Amended on Mar. 29, 2016]

Article 33-3(Procedure for Issuing Contingent Bonds Convertible into Stocks of Bank Holding Company) #

(1) In order for an unlisted bank to issue contingent bonds convertible into stocks of a bank holding company, the unlisted bank and the listed bank holding company shall make a contract on the exchange of stocks, which shall contain the matters specified by Presidential Decree, including the total amount of the contingent bonds convertible into stocks of the bank holding company, in accordance with the articles of incorporation and shall complete the following procedures, respectively:

1. In cases of the unlisted bank: Resolution by the board of directors;

2. In cases of the listed bank holding company: Resolution by the board of directors and by the general meeting of shareholders made under Article 434 of the Commercial Act.

(2) In order for an unlisted bank to issue contingent bonds convertible into stocks of a bank holding company, it shall register the bonds with the registry under Article 3 of the Registration of Bonds and Debentures Act. In such cases, such contingent bonds convertible into stocks of a bank holding company shall be registered by the method prescribed in Article 309 (5) of the Financial Investment Services and Capital Markets Act.

(3) Where an unlisted bank issues contingent bonds convertible into stocks of a bank holding company, the unlisted bank and the listed bank holding company shall register the matters specified by Presidential Decree, including the total amount of the contingent bonds convertible into stocks of the bank holding company, with the registry having jurisdiction over the head office, respectively within two weeks the payment made under Article 476 of the Commercial Act is completed.

(4) Where a shareholder of the listed bank holding company that has adopted a resolution at its board of directors under paragraph (1) 2 notifies the listed bank holding company of a dissent from the resolution, in writing, before a general meeting of shareholders is held, such shareholder may demand the listed bank holding company to purchase the stocks held by him or her in a written statement specifying the type and number of the stocks, within 20 days from the date of resolution. In such cases, Article 374-2 (2) through (5) of the Commercial Act shall apply mutatis mutandis to the determination, etc. of the period for purchase of stocks and the purchase price of stocks.

(5) An unlisted bank and a listed bank holding company shall reserve the number of stocks to be issued for conversion and exchange during the period from the date of issuance of contingent bonds convertible into stocks of the bank holding company to the effective date set under paragraph (6) or the maturity, whichever comes earlier.

(6) The conversion of contingent bonds convertible into stocks of a bank holding company into stocks of an unlisted bank and the exchange of the converted stocks into stocks of the listed bank holding company shall come into force on the day specified by Presidential Decree during the period from the date any trigger event occurs to the fifteenth business day thereafter.

(7) Notwithstanding Article 355 (1) of the Commercial Act, an unlisted bank may decide not to issue stock certificates even where the conversion and exchange come into force under paragraph (6).

(8) If a listed bank holding company ceases to have control (referring to the control defined by Article 2 (1) 1 of the Financial Holding Companies Act) over an unlisted bank after the unlisted bank issues contingent bonds convertible into stocks of the bank holding company, the contingent bonds convertible into stocks of the bank holding company, which have been issued until that time and in which case no trigger event has occurred, shall be deemed to be changed to contingent bonds convertible into bank stocks under the same conditions of conversion and subject to the occurrence of any of the same trigger events: Provided, That this shall not apply where the contract on the exchange of stocks made under paragraph (1) stipulates otherwise.

(9) An unlisted bank and a listed bank holding company shall register a modification to contingent bonds convertible into stocks of the bank holding company with the registry having jurisdiction over the head office, respectively, as follows:

1. Registration of a modification due to the conversion and exchange made under paragraph (6): Within two weeks from the effective date referred to in the same paragraph;

2. Registration of a modification due to a change made under paragraph (8): Within two weeks from the date of change made under the same paragraph.

(10) Articles 424, 424-2, and 429 through 432 of the Commercial Act and Article 165-6 (1), (2), and (4) and Articles 165-9 and 314 (8) of the Financial Investment Services and Capital Markets Act shall apply mutatis mutandis to the issuance of contingent bonds convertible into stocks of a bank holding company; and Articles 339, 348, 350 (2) and (3), 360-4, 360-7, 360-11, 360-12, and 360-14 of the Commercial Act shall apply mutatis mutandis to the conversion of stocks of an unlisted bank into contingent bonds convertible into stocks of a bank holding company and the exchange of such converted stocks with stocks of the listed bank holding company.

(11) Except as provided in paragraphs (1) through (10), matters that shall be stipulated by articles of incorporation, the specific standards for trigger events, and other detailed matters necessary for the issuance, etc. of contingent bonds convertible into stocks of a bank holding company shall be prescribed by Presidential Decree.

[This Article Newly Inserted on Mar. 29, 2016]

Article 33-4(Special Cases concerning Procedure for Issuance of Small Number of Contingent Bonds Convertible into Stocks of Bank Holding Company) #

(1) Where the value of issuance of contingent bonds convertible into stocks of a bank holding company, which are issued by an unlisted bank, does not exceed 5/100 of the total shareholders' equity (referring to the amount calculated by subtracting the total liabilities from the total assets on the statement of financial position) of the listed bank holding company, the resolution by the general meeting of shareholders of the listed bank holding company made under Article 33-3 (1) 2 (hereafter referred to as "special resolution" in this Article) may be substituted by resolution by the board of directors of the listed bank holding company made under the same subparagraph (a resolution by the general meeting of shareholders, if its articles of incorporation requires a resolution by the general meeting of shareholders under Article 368 (1) of the Commercial Act). In such cases, the contract on the exchange of stocks made under Article 33-3 (1) shall contain a clause that contingent bonds convertible into stocks of the bank holding company may be issued without a special resolution. <Amended on Apr. 20, 2021>

(2) A listed bank holding company shall publicly announce the trade name and head office of the unlisted bank involved, the scheduled issue date of the contingent bonds convertible into stocks of the bank holding company, and the fact that it will issue the contingent bonds convertible into stocks of the bank holding company without a special resolution or shall notify each shareholder of such facts, within two weeks from the date it makes a contract on the exchange of stocks under the latter part of paragraph (1).

(3) If a shareholder who holds stocks equivalent to not less than 20/100 of the total number of outstanding stocks of a listed bank holding company notifies a dissent from the issuance of contingent bonds convertible into stocks of the bank holding company, in writing, to the listed bank holding company within two weeks from the date of the public announcement or notification made under paragraph (2), the listed bank holding company may issue no contingent bonds convertible into stocks of the bank holding company in the manner prescribed in paragraph (1).

(4) Article 33-3 (4) shall not apply to the cases of paragraph (1).

(5) Except as otherwise provided for in paragraphs (1) through (4), Article 360-10 (6) of the Commercial Act shall apply mutatis mutandis to the issuance, etc. of a small number of contingent bonds convertible into stocks of a bank holding company.

[This Article Newly Inserted on Mar. 29, 2016]

Article 35-2(Credit Granting Limits for Large Shareholders of Banks) #

(1) The credit that a bank can extend to its large shareholders (including any person specially related to him or her excluding an overseas local corporation; hereafter the same shall apply in this Article) shall not exceed an amount equivalent to the ratio prescribed by Presidential Decree within the scope of 25/100 of the relevant bank's equity capital or an amount equivalent to the ratio of any contribution by the relevant large shareholder to the relevant bank, whichever is less.

(2) The credit that a bank can extend to all of its large shareholders shall not exceed an amount equivalent to the ratio prescribed by Presidential Decree within the scope of 25/100 of the relevant bank's equity capital.

(3) No bank shall extend credit to its large shareholders under mutual crossover for the purpose of circumventing the credit limit referred to in paragraphs (1) and (2).

(4) Where a bank intends to extend its large shareholders credit of not less than an amount prescribed by Presidential Decree (including any transaction prescribed by Presidential Decree; hereafter in this Article the same shall apply), it shall undergo resolution thereon by the board of directors in advance. In such cases, the resolution shall be passed by an affirmative vote of all incumbent members of the board of directors.

(5) Where a bank has extended its large shareholders credit of not less than an amount prescribed by Presidential Decree, it shall report thereon to the Financial Services Commission without delay, and disclose it through its web site, etc.

(6) A bank shall disclose the matters concerning credit granting to its large shareholders through its web site, etc. each quarter, as prescribed by Presidential Decree.

(7) No bank shall extend credit to support investment of large shareholders of the relevant bank in another company.

(8) No bank shall gratuitously transfer its assets to any large shareholder of the relevant bank, or trade or exchange its assets or extend credit to or with the relevant bank under substantially unfavorable conditions compared with ordinary terms and conditions of transactions.

[This Article Wholly Amended on May 17, 2010]

Article 35-3(Acquisition Limits on Equity Securities Issued by Large Shareholders) #

(1) No bank shall acquire (including acquisition by running the trust business, as prescribed by Presidential Decree; hereafter in this Article the same shall apply) equity securities (referring to equity securities provided for in Article 4 (4) of the Financial Investment Services and Capital Markets Act; hereafter in this Article the same shall apply) issued by large shareholders of the bank in excess of an amount equivalent to the ratio prescribed by Presidential Decree within the scope of 1/100 of the relevant bank's equity capital: Provided, That this shall not apply where a bank that is a subsidiary, etc. of a bank holding company under Article 2 (1) 5 of the Financial Holding Companies Act (referring to a subsidiary defined by Article 4 (1) 2 of the Financial Holding Companies Act; hereafter the same shall apply in this paragraph) invests in a private equity fund for which any other subsidiary, etc. of the bank holding company serves as executive partner. <Amended on Jul. 24, 2015; Apr. 20, 2021>

(2) The Financial Services Commission may set a separate acquisition limit on equity securities by type within the acquisition limit referred to in the main clause of paragraph (1).

(3) Where a bank exceeds the limit referred to in paragraph (1) as a person who has not been its large shareholder newly becomes its large shareholder, it shall dispose of equity securities in excess of the limit within a period set by Presidential Decree.

(4) Where a bank intends to acquire equity securities issued by its large shareholders not less than an amount prescribed by Presidential Decree, it shall undergo resolution thereon by the board of directors in advance. In such cases, the resolution shall be made by an affirmative vote of all incumbent members of the board of directors.

(5) Where a bank has acquired equity securities issued by its large shareholders of not less than an amount prescribed by Presidential Decree, it shall report thereon to the Financial Services Commission without delay and give public notice thereof through its web site, etc.

(6) A bank shall disclose the matters concerning the acquisition of equity securities issued by its large shareholders through its web site, etc. each quarter, as prescribed by Presidential Decree.

(7) A bank shall exercise its voting rights in the equity securities issued by its large shareholders in such a manner as not affecting the contents of resolution by the number of equity securities at the general meeting of the large shareholders less the number of equity securities owned by the bank: Provided, That this shall not apply to cases of a merger of large shareholders, transfer or acquisition of business, appointment of executive officers, or other similar matters, which would obviously cause any loss to the bank.

[This Article Wholly Amended on May 17, 2010]

Article 37(Restrictions on Investment in other Companies) #

(1) No bank shall hold more than 15/100 of the voting equity securities issued by another company, etc.

(2) Notwithstanding paragraph (1), a bank may hold equity securities in excess of 15/100 of the voting equity securities if it invests in a company, etc. falling under the type of business determined by the Financial Services Commission, or obtains approval from the Financial Services Commission as necessary for promoting corporate restructuring: Provided, That this only applies where total investments made by a bank in a company, etc. (hereinafter referred to as "subsidiaries, etc."), the equity securities of which are held by the bank in excess of 15/100 of the voting equity securities do not exceed any of the following amounts:

1. An amount equivalent to the ratio prescribed by Presidential Decree within the limit of 20/100 of the equity capital of the bank;

2. An amount equivalent to the ratio prescribed by Presidential Decree within the limit of 40/100 of the equity capital of the bank where the bank meets the requirements determined and publicly announced by the Financial Services Commission, in consideration of the management condition, etc. of the bank, its subsidiaries, etc.

(3) No bank shall perform any of the following activities in doing business with its subsidiaries, etc.:

1. Extending credit to its subsidiaries, etc. in excess of the ceiling prescribed by Presidential Decree (excluding cases prescribed by Presidential Decree, such as merger, etc. of its subsidiaries, etc.);

2. Extending credit in which the equity securities of the bank's subsidiaries, etc. are offered as security, and extending credit to purchase the equity securities of the bank's subsidiaries, etc.;

3. Extending loans to executive officers or employees of the bank's subsidiaries, etc. (excluding petty loans determined by the Financial Services Commission);

4. Other acts prescribed by Presidential Decree that could undermine the sound management of the bank or infringe the interests of the bank users, including depositors, etc.

(4) Detailed matters concerning a bank’s investment in its subsidiaries, etc. shall be prescribed by Presidential Decree.

(5) The terms "parent bank" and "subsidiary bank" in paragraphs (6) through (8) mean a bank that owns more than 15/100 of the total number of the voting stocks issued by another bank, and such another bank. In such cases, if a parent bank and its subsidiary bank collectively hold more than 15/100 of the total number of the voting stocks issued by a bank that is not the subsidiary bank, the bank shall be deemed a subsidiary bank of the parent bank.

(6) No subsidiary bank shall perform any of the following acts:

1. Owning stocks issued by the parent bank and another subsidiary bank of the parent bank (hereinafter referred to as "parent bank, etc.") (excluding cases prescribed by Presidential Decree);

2. Owning stocks of another bank in excess of 15/100 of its voting stocks issued;

3. Extending credit to the parent bank, etc. in excess of the ceiling prescribed by Presidential Decree;

4. Other acts prescribed by Presidential Decree that could undermine the sound management of the parent bank or infringe on the interests of bank users, including depositors, etc.

(7) Where a subsidiary bank and its parent bank, etc. extend credit to each other, they shall do so under appropriate security according to the standards prescribed by Presidential Decree: Provided, That this shall not apply where it satisfies the requirements prescribed by Presidential Decree, such as credit granting necessary for restructuring the subsidiary bank and parent bank.

(8) A subsidiary bank and its parent bank, etc. shall not mutually transact bad assets prescribed by Presidential Decree: Provided, That this shall not apply where it satisfies the requirements set by the Financial Services Commission, such as transactions necessary for restructuring the subsidiary bank and parent bank.

[This Article Wholly Amended on May 17, 2010]

Article 38(Prohibited Business) #

No bank shall perform any of the following activities:

1. Investment in the following stocks or securities, the sum of which exceeds an amount equivalent to the ratio prescribed by Presidential Decree within the limit of 100/100 of the equity capital of the bank. In such cases, the Financial Services Commission may, if necessary, otherwise determine the ceiling on investment in the following stocks and securities within the said limit on investment:

(a) Debt securities provided for in Article 4 (3) of the Financial Investment Services and Capital Markets Act, the redemption period of which exceeds three years: Provided, That national bonds, currency stabilization bonds issued by the Bank of Korea, and bonds provided for in Article 11 (6) 2 of the Act on the Structural Improvement of the Financial Industry shall be excluded;

(b) Equity securities: Provided, That stocks provided for in Article 11 (6) 1 of the Act on the Structural Improvement of the Financial Industry shall be excluded;

(c) Those prescribed by Presidential Decree, among derivative-combined securities provided for in Article 4 (7) of the Financial Investment Services and Capital Markets Act;

(d) Other securities prescribed by Presidential Decree, among securities provided for in the subparagraphs of Article 4 (2) of the Financial Investment Services and Capital Markets Act;

2. Owning real estate (excluding real estate acquired through the exercise of a security right, such as mortgage, etc.) other than real estate for business purposes;

3. Owning real estate for business purposes in excess of an amount equivalent to the ratio prescribed by Presidential Decree within the limit of 100/100 of equity capital;

4. Loans on the security of stocks of the relevant bank, whether direct or indirect;

5. Loans contingent on the purchase of stocks of the relevant bank, whether direct or indirect;

6. Loans to executive officers or employees of the relevant bank (excluding petty loans determined by the Financial Services Commission).

[This Article Wholly Amended on May 17, 2010]

Article 52(Modification of Standard Terms and Conditions) #

(1) A bank shall protect the rights and interests of bank users in handling the affairs under this Act, and where it intends to establish or modify the standard terms and conditions relating to financial transactions, it shall file a report thereon to the Financial Services Commission no later than 10 days after establishing or modifying the terms and conditions: Provided, That in cases prescribed by Presidential Decree which are likely to have a significant impact on the rights or duties of users, the bank shall in advance report such fact to the Financial Services Commission before establishing or modifying the terms and conditions. <Amended on Dec. 31, 2018>

(2) Where a bank intends to establish or modify the standard terms and conditions, it shall comply with the following matters: <Newly Inserted on Dec. 7, 2021>

1. The standard terms and conditions shall not include details violating this Act or other statutes and regulations;

2. They shall not unduly include details disadvantageous to bank users;

3. They meet the standards determined and publicly notified by the Financial Services Commission to protect the rights and interests of bank users, such as depositors, and to maintain sound practices in financial transactions.

(3) Where a bank establishes or modifies the standard terms and conditions, it shall publicly notify the established or modified terms and conditions on its website or by other means. <Amended on Dec. 7, 2021>

(4) The Financial Services Commission, upon receipt of a report on the standard terms and conditions pursuant to paragraph (1), shall notify the Fair Trade Commission of such standard terms and conditions. In such cases, where the Fair Trade Commission deems that the notified terms and conditions contain any clause prescribed in Articles 6 through 14 of the Act on the Regulation of Terms and Conditions, it shall notify the Financial Services Commission of such fact and request it to take measures necessary for the rectification thereof, and the Financial Services shall comply therewith unless any special reason exists to the contrary. <Amended on Dec. 31, 2018; Dec. 7, 2021>

(5) The Financial Services Commission may recommend that a bank modify its standard terms and conditions referred to in paragraph (1), where necessary to maintain sound practices in financial transactions. <Amended on Dec. 7, 2021>

(6) The procedures and methods for reporting under paragraph (1), the guidelines for examination regarding recommendations for modification of the standard terms and conditions under paragraph (5), and other matters shall be determined and publicly notified by the Financial Services Commission. <Amended on Dec. 7, 2021>

[This Article Wholly Amended on May 17, 2010]

Article 53(Sanctions against Banks) #

(1) Where a bank is deemed likely to undermine soundness in its management, in violation of this Act or any regulation, order, or instruction under this Act, or where it falls under any subparagraph of the attached Table of the Act on Corporate Governance of Financial Companies (limited to a measure prescribed in subparagraph 2) or cases prescribed by Presidential Decree in Article 51 (1) 4 or 5 or the main clause, with the exception of the subparagraphs, of paragraph 2 of the same Article of the Act on the Protection of Financial Consumers (limited to a measure prescribed in subparagraph 2), the Financial Services Commission may take either of the following measures upon the recommendation of the Governor of Financial Supervisory Service or may require the Governor of the Financial Supervisory Service to take appropriate measures, such as ceasing the relevant violation or giving a warning: <Amended on Jul. 31, 2015; Mar. 24, 2020>

1. A corrective order for the relevant violation;

2. Suspension of part of business operations for not more than six months.

(2) Where a bank falls under any of the following subparagraphs, the Financial Services Commission may order the bank to suspend all of its business operations for a specified period not to exceed six months or may revoke authorization for the banking business: <Amended on Jul. 31, 2015; Mar. 24, 2020>

1. Where it obtains authorization for banking business by fraud or other improper means;

2. Where it violates the details or conditions of authorization;

3. Where it operates its business during the period of business suspension;

4. Where it fails to implement a corrective order under paragraph (1) 1;

5. Cases other than those prescribed in subparagraphs 1 through 4, where the interests of depositors or investors are likely to be significantly undermined due to a violation of this Act or any order or dispositions issued or taken under this Act;

6. Where it falls under any subparagraph of the attached Table of the Act on Corporate Governance of Financial Companies (limited to where an order to suspend all of business operations is issued);

7. Where it falls under Article 51 (1) 4 or 5 of the Financial Consumers Protection Act;

8. Cases prescribed by Presidential Decree in the main clause, with the exception of the subparagraphs, of Article 51 (2) of the Financial Consumers Protection Act (limited to where an order to suspend all of business operations is issued).

[This Article Wholly Amended on May 17, 2010]

Article 53-2(Sanctions against Private Equity Funds Exclusive for Institutions, etc.) #

(1) If a private equity fund exclusive for institutions, etc. (limited to a private equity fund exclusive for institutions, etc. that holds stocks of a bank with approval granted under Article 15 (3); hereafter in paragraphs (2) through (4) of this Article, the same shall apply) or any of its shareholders or partners violates Article 15-5, no such private equity fund exclusive for institutions, etc. shall exercise its voting rights on the stocks held in excess; and such private equity fund exclusive for institutions, etc. shall dispose of the stocks held in excess, without delay. <Amended on Aug. 13, 2013; Jul. 24, 2015; Apr. 20, 2021>

(2) If a private equity fund exclusive for institutions, etc. fails to comply with paragraph (1), the Financial Services Commission may order the private equity fund exclusive for institutions, etc. to dispose of stocks held in excess, for a specified period not more than one month. <Amended on Jul. 24, 2015; Apr. 20, 2021>

(3) If a private equity fund exclusive for institutions, etc. falls under any subparagraph of Article 15-5, the Financial Services Commission may take any of the following measures: <Amended on Jul. 24, 2015; Apr. 20, 2021>

1. Issuing an order to correct or suspend the relevant act;

2. Issuing an order to publicly announce or post the fact that it has been taken measures due to the relevant act;

3. Issuing an institutional warning;

4. Issuing an institutional caution;

5. Other measures prescribed by Presidential Decree, as necessary for correcting or preventing the relevant act.

(4) If the executive partner responsible for management, etc. of property of a private equity fund exclusive for institutions, etc. falls under any of the subparagraphs of Article 15-5, the Financial Services Commission may take any of the following measures: <Amended on Jul. 24, 2015; Apr. 18, 2017; Apr. 20, 2021>

1. Measures in relation to the executive partner:

(a) A request for dismissal;

(b) Suspension from office for up to six months;

(d) An institutional caution;

(e) Other measures prescribed by Presidential Decree, as necessary for correcting or preventing the relevant act;

2. Measures in relation to an executive officer (excluding operating officers defined in subparagraph 5 of Article 2 of the Act on Corporate Governance of Financial Companies; hereafter in Articles 54 and 54-2, the same shall apply) of the executive partner:

(a) A request for dismissal;

(b) Suspension from office for up to six months;

(d) A cautionary warning;

(e) Other measures prescribed by Presidential Decree, as necessary for correcting or preventing the relevant act;

3. A request for measures in relation to an employee (including operating officers defined in subparagraph 5 of Article 2 of the Act on Corporate Governance of Financial Companies; hereafter in Articles 54 and 54-2, the same shall apply) of the executive partner:

(a) Dismissal;

(b) Suspension from office for up to six months;

(d) Reprimand;

(e) Caution.

(f) Other measures prescribed by Presidential Decree, as necessary for correcting or preventing offenses.

(5) Paragraphs (2) through (4) shall apply mutatis mutandis to a private equity fund exclusive for institutions, etc. falling under any of the following cases (including its shareholders or partners). In such cases, paragraph (4) 2 shall apply mutatis mutandis where the executive partner is an individual: <Amended on Jul. 24, 2015; Apr. 20, 2021>

1. Where it holds stocks of a bank in excess of the holding limit of stocks stipulated under Article 15 (1) and (3);

2. Deleted; <Aug. 13, 2013>

3. Where it has received an order to dispose of stocks pursuant to Article 16-4 (5).

(6) No private equity fund exclusive for institutions, etc. falling under paragraph (5) 1 shall be governed by Article 16 (3). <Amended on Aug. 13, 2013; Jul. 24, 2015; Mar. 29, 2016; Apr. 20, 2021>

[This Article Wholly Amended on May 17, 2010]

[Title Amended on Jul. 24, 2015; Apr. 20, 2021]

Article 65-3(Penalty Surcharges) #

Where a bank violates Article 35, 35-2, 35-3, 37, 38, or 62 or its large shareholder violates Article 35-4, the Financial Services Commission may impose penalty surcharges thereon according to the following classifications: <Amended on Apr. 18, 2017>

1. Where a bank exceeds the credit granting limits referred to in Article 35 (1), (3), or (4), or Article 37 (3) 1 or (6) 3: Not more than 30/100 of the amount of excess credit;

2. Where a bank exceeds credit granting limits referred to in Article 35-2 (1) or (2): Not more than the amount of excess credit;

3. Where a bank exceeds the acquisition limit on equity securities referred to in Article 35-3 (1): Not more than the total book value of the equity securities acquired in excess;

4. Where a bank exceeds the limit on holding equity securities referred to in Article 37 (1), (2), or (6) 2: Not more than 30/100 of the total book value of the equity securities owned in excess;

5. Where a bank extends credit, in violation of Article 37 (3) 2: Not more than 5/100 of the amount of extended credit;

6. Where a bank holds stocks, in violation of Article 37 (6) 1: Not more than 5/100 of the total book value of the stocks held;

7. Where a bank extends credit without securing any proper security, in violation of the main clause of Article 37 (7): Not more than 30/100 of the amount of extended credit;

8. Where a bank trades bad assets, in violation of the main clause of Article 37 (8): Not more than 30/100 of the book value of such bad assets;

9. Where a bank exceeds the investment ceiling referred to in subparagraph 1 of Article 38: Not more than 30/100 of the amount of excess investment;

10. Where a bank owns real estate, in violation of subparagraph 2 of Article 38: Not more than 30/100 of the acquisition value of the real estate owned;

11. Where a bank exceeds the limit on real estate holdings referred to in subparagraph 3 of Article 38: Not more than 30/100 of the acquisition value of the real estate owned in excess of the limit;

12. Where a bank offers loans on the security of the stocks of the relevant bank, in violation of subparagraph 4 of Article 38: Not more than 5/100 of the amount of loans;

13. Where a bank offers loans, in violation of subparagraph 5 of Article 38: Not more than 5/100 of the amount of loans;

14. Where a bank fails to hold assets under Article 62 (1): Not more than 5/100 of the amount of violation;

15. Where a bank extends credit or gratuitously transfers, trades or exchanges assets, in violation of Article 35-2 (7) or (8): Not more than the amount of extended credit or the book value of such assets;

16. Where a large shareholder violates Article 35-4, and thus a bank extends credit in excess of the credit granting limit under Article 35-2 (1) or (2) to the large shareholder: Not more than the amount of excess credit;

17. Where a large shareholder violates Article 35-4, and thus a bank extends credit to the large shareholder or gratuitously transfers, trades or exchanges assets, in violation of Article 35-2 (7) or (8): Not more than the amount of extended credit or the book value of such assets;

18. Where a large shareholder violates Article 35-4, and thus a bank acquires stocks of the large shareholder in excess of the acquisition limit under Article 35-3 (1): Not more than the total book values of stocks acquired in excess.

[This Article Wholly Amended on May 17, 2010]

Article 65-7(Extension of Payment Deadline of Penalty Surcharges and Payment of Penalty Surcharges in Installments) #

(1) Where the Financial Services Commission deems that a person on whom a penalty surcharge is imposed (hereinafter referred to as "person liable to pay a penalty surcharge") has difficulty in paying the penalty surcharge in lump sum for any of the following causes, it may extend the payment deadline or permit him or her to pay the penalty surcharge in installments. In such cases, it may require him or her to provide security, if necessary:

1. Where he or she has sustained any substantial loss to property due to disaster, etc.;

2. Where his or her business is in serious crisis due to the aggravation of business conditions;

3. Where it is expected that his or her financial circumstances will become significantly difficult if he or she pays the penalty surcharge in a lump sum.

(2) Where a person liable to pay a penalty surcharge intends to have the payment deadline of the penalty surcharge extended or the penalty surcharge paid in installments under paragraph (1), he or she shall make an application therefor to the Financial Services Commission by not later than 10 days before the payment deadline.

(3) Where a person liable to pay a penalty surcharge falls under any of the following cases after he or she has obtained an extension of the payment deadline or approval for the payment in installments under paragraph (1), the Financial Services Commission may cancel the extension of the payment deadline or the decision for the payment in installments and then collect the penalty surcharge in a lump sum:

1. Where he or she fails to pay the penalty surcharge, the payment of which has been decided to be made in installments, within the payment deadline;

2. Where he or she fails to execute an order to change his or her security or other orders issued by the Financial Services Commission, which are necessary to preserve such security;

3. Where it is deemed impossible to collect all or residual penalty surcharges imposed on him or her, on the grounds that he or she is subjected to compulsory execution, the commencement of an auction, the declaration of bankruptcy, the dissolution of a corporation, or a disposition taken to collect national or local taxes in arrears, etc.;

4. Other causes prescribed by Presidential Decree which are equivalent to subparagraphs 1 through 3.

(4) Matters necessary for the extension of a payment deadline for penalty surcharges, the payment in installments, or the furnishing of security, etc. under paragraphs (1) through (3) shall be prescribed by Presidential Decree.

[This Article Wholly Amended on May 17, 2010]

Article 69(Administrative Fines) #

(1) Any of the following persons shall be subject to an administrative fine of not more than 100 million won: <Amended on Aug. 13, 2013; Mar. 29, 2016; Apr. 18, 2017>

1. A person who fails to file a report, in violation of Article 13 (2), 27-2 (2), or 28 (2);

2. A person who uses a similar trade name, in violation of Article 14;

3. A person who fails to file a report, in violation of Articles 15 (2) and 15-4;

4. A person who fails to comply with a request to submit data, etc. under Article 15-3 (3) (including cases for examination for approval under Article 15 (3)), 16-4 (2), or 35-5 (1) and (2);

5. A bank that violates Article 30;

5-2. A bank that violates Article 34-2 (1);

5-3. Any bank that violates Article 34-3 (1);

6. A bank that fails to undergo a decision by the board of directors, in violation of Article 35-2 (4) or 35-3 (4);

7. A bank that fails to file a report to the Financial Services Commission or to make public disclosure, in violation of Article 35-2 (5) and (6) or 35-3 (5) and (6);

7-2. A bank that makes a false public announcement under Article 41;

7-3. A bank that submits a report in violation of Article 43-2 or states incorrect information on the report;

7-4. A bank that discloses information in violation of Article 43-3 or discloses incorrect information;

7-5. A bank that refuses, obstructs, or evades an inspection under Article 48;

8. A person who refuses, obstructs, or evades an inspection under Article 48-2;

9. A bank that violates Article 52-2;

10. Deleted; <Mar. 24, 2020>

11. Other banks that violate this Act or any regulation, order, or instruction under this Act.

(2) Any of the following persons shall be subject to an administrative fine not exceeding 50 million won: <Newly Inserted on Mar. 29, 2016; Apr. 18, 2017; Mar. 21, 2023>

1. A person who fails to file a report or give a public notice in violation of Article 34-3 (3);

2. A person who fails to submit a report or submits a false report to a regular general meeting of shareholders, in violation of Article 43-4 (1).

(3) A bank that fails to take measures for protecting its employees or gives a disadvantage to the employees in violation of Article 52-4 shall be subject to an administrative fine of not more than 30 million won. <Newly Inserted on Mar. 29, 2016; Apr. 18, 2017>

(4) A bank that fails to inform the relevant person of a right to request a reduction in interest rate, in violation of Article 30-2 (2), shall be subject to an administrative fine of not more than 20 million won. <Newly Inserted on May 19, 2020>

(5) In any of the following cases, an executive officer, etc. or employee of a bank shall be subject to an administrative fine not exceeding 20 million won: <Amended on Mar. 29, 2016; Apr. 18, 2017; Dec. 11, 2018; May 19, 2020>

1. Deleted; <May 19, 2020>

2. Deleted; <Jul. 31, 2015>

2-2. Deleted; <Apr. 18, 2017>

2-3. Deleted; <Apr. 18, 2017>

3. Deleted; <Apr. 18, 2017>

4. Deleted; <Apr. 18, 2017>

5. Where he or she refuses, obstructs, or evades an inspection under Article 48;

6. Deleted; <Apr. 18, 2017>

7. Where he or she neglects to keep, submit, report, publicly announce, or disclose documents under this Act;

8. Other cases where he or she violates this Act or any regulation, order, or instruction under this Act.

(6) Administrative fines under paragraphs (1) through (5) shall be imposed and collected by the Financial Services Commission, as prescribed by Presidential Decree. <Amended on Mar. 29, 2016; May 19, 2020>

[This Article Wholly Amended on May 17, 2010]

Article 1(Purpose) #

Article 2(Definitions) #

Article 3(Applicable Acts) #

Article 4(Juristic Persons) #

Article 5 #

Article 6(Insurers, etc.) #

Article 7(Determination on whether Juristic Persons are Banks) #

Article 8(Authorization of Banking Business) #

Article 9(Minimum Capital) #

Article 10(Approval for Capital Reduction) #

Article 11(Submission of Applications) #

Article 11-2(Preliminary Authorization) #

Article 12(Public Announcement of Authorization) #

Article 13(Establishment of Overseas Local Corporations) #

Article 14(Prohibition of Use of Similar Trade Names) #

Article 15(Limits on Stock-Holding by Same Person) #

Article 15-2 #

Article 15-3(Approval for Holding of Stocks of Private Equity Funds Exclusive for Institutions, etc.) #

Article 15-4(Matters to be Reported by Private Equity Funds Exclusive for Institutions, etc.) #

Article 15-5(Duty of Private Equity Funds Exclusive for Institutions, etc.) #

Article 16(Restrictions on Voting Rights of Limit Excess Stocks) #

Article 16-2(Restrictions on Stockholding by Non-Financial Investors) #

Article 16-3(Appraisal and Inspections of Conversion Plans) #

Article 16-4(Examination of Qualifications of Shareholders, etc. Holding Stocks in Excess of Limit) #

Article 16-5(Special Cases for Foreign Banks, etc.) #

Article 17 #

Article 18 #

Article 19 #

Article 20 #

Article 21 #

Article 21-2(Prohibition on Divulgence of Confidential Information) #

Article 22 #

Article 23 #

Article 23-2 #

Article 23-3 #

Article 23-4 #

Article 23-5 #

Article 24 #

Article 25 #

Article 26 #

Article 27(Scope of Services) #

Article 27-2(Operation of Incidental Services) #

Article 28(Operation of Concurrent Business) #

Article 28-2(Management of Conflict of Interest) #

Article 29 #

Article 30(Matters to be Observed on Reserves for Deposits and Interest Rate) #

Article 30-2(Request for Reduction in Interest Rate) #

Article 31(Commercial Financial Business and Long-Term Financial Business) #

Article 32(Handling of Current Accounts) #

Article 33(Issuance of Bank Debentures) #

Article 33-2(Procedure, etc. for Issuing Write-Down Contingent Convertible Bonds and Contingent Bonds Convertible into Bank Stocks) #

Article 33-3(Procedure for Issuing Contingent Bonds Convertible into Stocks of Bank Holding Company) #

Article 33-4(Special Cases concerning Procedure for Issuance of Small Number of Contingent Bonds Convertible into Stocks of Bank Holding Company) #

Article 33-5(Registration of Debentures) #

Article 34(Guidance for Sound Management) #

Article 34-2(Prohibition of Unsound Business Conduct) #

Article 34-3(Prevention of Financial Accidents) #

Article 35(Credit Granting Limit on Same Borrowers) #

Article 35-2(Credit Granting Limits for Large Shareholders of Banks) #

Article 35-3(Acquisition Limits on Equity Securities Issued by Large Shareholders) #

Article 35-4(Bans on Exercise of Unfair Influence by Large Shareholders) #

Article 35-5(Requests for Data from Large Shareholders) #

Article 36(Loans to Government Agencies) #

Article 37(Restrictions on Investment in other Companies) #

Article 38(Prohibited Business) #

Article 39(Reporting on and Disposal of Assets for Non-Business Use) #

Article 40(Accumulation of Legal Reserves) #

Article 41(Public Announcement of Financial Statements) #

Article 42(Presentation of Statement of Financial Position) #

Article 43(Refusal to Disclose Materials) #

Article 43-2(Submission of Business Reports) #

Article 43-3(Public Disclosure of Management) #

Article 43-4(Reporting to Regular General Meetings of Shareholders) #

Article 44(Supervision over Banks) #

Article 45 #

Article 46(Measures for Insolvency of Deposits) #

Article 47(Reports on Amendment of Articles of Association) #

Article 48(Inspections) #

Article 48-2(Inspections of Large Shareholders) #