ENFORCEMENT DECREE OF THE BANKING ACT

Article 1(Purpose) #

The purpose of this Decree is to prescribe matters mandated by the Banking Act and matters necessary for the enforcement thereof.

[This Article Wholly Amended on Nov. 15, 2010]

Article 1-2(Scope of equity capital) #

The core capital and supplementary capital to be included in the equity capital under Article 2 (1) 5 of the Banking Act (hereinafter referred to as the "Act") shall be determined and publicly notified by the Financial Services Commission according to the following standards: <Amended on Dec. 28, 2011>

1. The core capital shall be the sum of the followings:

(a) The amount that can first make up for the loss of a bank, such as capital, capital surplus, and earned surplus, which incurs from the issuance of common stocks;

(b) The amount that can make up for the loss of a bank in subsequent to the core capital under item (a), such as capital and capital surplus, which incurs from the issuance of equity securities that have permanent characteristics;

2. Supplementary capital, which is equivalent to the capital under subparagraph 1 such as junior bonds that are not included in those referred to in subparagraph 1, shall make up for the losses incurred when a bank is liquidated;

3. Those that do not make any substantial contribution to the improvement of the debt-to-equity balance, such as treasury stocks held by the relevant banks shall not be included in the core capital and supplementary capital.

[This Article Wholly Amended on Nov. 15, 2010]

Article 1-3(Scope of credit granting) #

(1) The scope of credit granting under Article 2 (1) 7 of the Act shall include the following, as determined and publicly notified by the Financial Services Commission:

1. Loan;

2. Payment guarantee;

3. Giving substitute payments following payment guarantee;

4. Purchase of notes and bonds;

5. Other transactions that may bring any loss on banks in the event of default of payment of the other party to the transactions;

6. Transactions that may incur loss on banks even if the banks do not engage directly in the transactions corresponding to those under subparagraphs 1 through 5.

(2) The Financial Services Commission may choose not to include the following transactions in the scope of credit granting, notwithstanding paragraph (1):

1. Transactions that may have negligible probability of incurring loss on banks;

2. Transactions that the Financial Services Commission determines as reasonable to be excluded from the scope of credit granting in light of factors, such as the consequent effect on the financial market.

[This Article Wholly Amended on Nov. 15, 2010]

Article 1-4(Scope of specially related persons) #

(1) "A person having a special relationship prescribed by Presidential Decree with the principal" in Article 2 (1) 8 of the Act means a person in a relationship with the principal, as provided for in the following subparagraphs (hereinafter referred to as "specially related person"): <Amended on Dec. 28, 2021; Dec. 27, 2022>

1. A spouse, blood relatives in a second cousin relationship, and affines in a first cousin relationship; provided, the same shall not apply to an independent manager under Article 5 (1) 2 (a) of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act, and a person recognized by the Fair Trade Commission to be excluded from the scope of persons related to the same person under the same item;

2. A non-profit corporation, association or organization in which the principal and the persons under subparagraph 1 or 4 hold majority position of executive officers, or the said persons together with those defined in subparagraph 3 or 5 have made an amount of at least 50/100 of investment, or one of these persons is the founder;

3. A company in which the principal and the persons under subparagraphs 1, 2, and 4 own at least 30/100 of the total number of issued voting stocks (including the shares; hereinafter the same shall apply), or they participate in management as the largest stockholders;

4. A person employed by the principal or a person under subparagraph 2 or 3 (referring to an executive officer if the employer is a corporation, association, or organization, and if the employer is an individual, referring to a commercial employer, an employee under an employment contract, or a person who maintains his or her livelihood on the money or the property of such individual);

5. A company in which the principal and persons under subparagraphs 1 through 4 own at least 30/100 of the total number of issued voting stocks, or they participate in management as the largest stockholders;

6. Where the principal is a person who controls (hereinafter referred to as "affiliated holder") the enterprise group under subparagraph 11 of Article 2 of the Monopoly Regulation and Fair Trade Act (hereinafter referred to as "enterprise group"), a company that belongs to the enterprise group controlled by such person (including a foreign corporation in which an affiliated holder fulfills the requirements stipulated in subparagraphs 1 and 2 of Article 4 (1) of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act, independently or jointly with persons in a relationship corresponding to any item of subparagraphs 1 and 2 of that paragraph; hereafter the same shall apply in this Article), and the executive officers of such company;

Article 1-5(Scope of financial business) #

(1) "Financial business prescribed by Presidential Decree" in Article 2 (1) 9 (a) of the Act means any of the following business types or business affairs: <Amended on Oct. 17, 2017; Oct. 1, 2025>

1. Financial or insurance activities under the Korea Standard Industrial Classification publicly notified by the Minister of Data and Statistics under Article 22 (1) of the Statistics Act (excluding any holding companies other than financial holding companies under Article 2 (1) 1 of the Financial Holding Companies Act; hereinafter referred to as "financial business");

2. Any of the following business affairs:

(a) Offering services including computer network and electronic data processing to a company carrying on financial business;

(b) Management of real estate and other assets retained by a company carrying on financial business;

(c) Survey and research related to financial business;

(d) Other business affairs directly relevant to proper business affairs of a company carrying on financial business.

(2) "Amount prescribed by Presidential Decree" in Article 2 (1) 9 (b) of the Act means two trillion won.

[This Article Wholly Amended on Nov. 15, 2010]

Article 1-6(Standards for exercising de facto influences and standards for participating in management) #

(1) A person exercising de facto influence over major managerial matters of the bank under Article 2 (1) 10 (b) of the Act means a person falling under any of the following subparagraphs:

1. A stockholder who has selected the president of a bank or a majority of its executive officers, either independently or under an agreement, contract, etc. with other stockholders;

2. A person deemed to exercise dominant influence over principal decision-making, such as management strategy and organizational change, or business execution, who is designated by the Financial Services Commission.

(2) Deleted. <Feb. 11, 2014>

[This Article Wholly Amended on Nov. 15, 2010]

Article 1-7(Detailed requirements for authorization of banking business) #

(1) A business plan under Article 8 (2) 5 of the Act (hereinafter in this Article, referred to as "business plan") shall meet all of the following requirements:

1. The estimated financial statements and profitability prospect shall be feasible and realizable;

2. To be able to satisfy management instruction standards referred to in Article 34 (2) of the Act;

3. To have an appropriate internal control system in place for risk management and prevention of financial incidents;

4. To be equipped with appropriate business practices for the protection of bank users.

(2) Human resources, business facilities, computer systems, and other physical facilities under Article 8 (2) 7 of the Act shall meet the following requirements:

1. To have the appropriate level of necessary human resources, including, but not limited to, human resources having expertise and soundness in banking business and computer personnel for managing banking business;

2. To be equipped with the following physical facilities:

(a) Computer facilities and means of communications necessary for managing banking business;

(b) Security facilities capable of safely protecting physical facilities, such as computer facilities, etc.;

(c) Supplementary facilities necessary for maintaining continuity in business affairs in case a power failure or fire, etc. occurs.

(3) Detailed requirements for the authorization of banking business, in addition to the matters provided for in paragraphs (1) and (2), shall be determined and publicly notified by the Financial Services Commission.

(4) Where the Financial Services Commission has imposed conditions in granting authorization for banking business pursuant to Article 8 (4) of the Act, it shall verify whether such conditions are fulfilled.

[This Article Wholly Amended on Nov. 15, 2010]

Article 2(Approval for capital reduction) #

(1) "An act that reduces its capital, as prescribed by Presidential Decree" in Article 10 (1) of the Act means a bank's substantial reduction of its capital by reducing the number of stocks or by lowering the value of stocks.

(2) A person who intends to obtain the approval under Article 10 (1) of the Act shall file an application for approval with the Financial Services Commission, stating the following information: <Amended on Jun. 28, 2016>

1. The purpose of capital reduction;

2. Details of the change in capital;

3. Matters concerning the procedure for capital reduction, time schedule, etc. of capital reduction;

4. Other matters determined and publicly notified by the Financial Services Commission as necessary for filing an application for approval.

(3) An application form for approval filed under paragraph (2) shall be accompanied by the following documents: <Added on Jun. 28, 2016>

1. Articles of incorporation;

2. Meeting minutes, if there is a resolution by the board of directors or by the general meeting of stockholders on the reasons for filing an application for approval;

3. A copy of a contract, if there is a contract related to the reasons for filing an application for approval;

4. Other documents determined and publicly notified by the Financial Services Commission as necessary for examining the approval.

[This Article Wholly Amended on Nov. 15, 2010]

[Title Amended on Jun. 28, 2016]

Article 3(Content of applications for authorization of banking business) #

(1) The following matters shall be stated in an application for authorization to be submitted to the Financial Services Commission pursuant to Article 11 (1) of the Act:

1. Trade name;

2. Locations where places of business, such as the head office and branches, are located;

3. Matters concerning promoters (only applicable to individuals) and executive officers;

4. Matters concerning financial affairs, such as capital;

5. Matters concerning business plans;

6. Matters concerning human resources, business facilities, computer systems, and other physical facilities;

7. A plan for the composition of stockholders;

8. Other matters determined and publicly notified by the Financial Services Commission as necessary for examining requirements for authorization.

(2) An application for authorization referred to in paragraph (1) shall be accompanied by the following documents: <Amended on Feb. 11, 2014; Jul. 28, 2016>

1. Articles of incorporation;

2. Documents stating locations and names of the head office, branches, and other places of business;

3. Documents attesting to decision-making on the establishment or application for authorization, such as meeting minutes, of the general meeting of promoters, inaugural general meeting of stockholders, or the board of directors;

4. Documents attesting that any promoter (only applicable where promoters are individuals) or executive officer does not fall under any subparagraph of Article 5 (1) of the Act on Corporate Governance of Financial Companies;

5. Financial statements and supplementary schedules for the last three years (excluding a corporation in the process of establishment; referring to financial statements and supplementary schedules from the date of establishment to the recent business year in cases of a corporation for whom three business years have not passed yet since the date of its establishment);

6. Business plans (including estimated financial statements) and estimated statement of income and expense for three business years following the commencement of business affairs;

Article 3-2(Preliminary authorization) #

(1) A person who intends to apply for preliminary authorization pursuant to Article 11-2 (1) of the Act shall submit an application for preliminary authorization stating the following matters to the Financial Services Commission:

1. Trade name;

2. Locations where places of business, such as the head office and branches, are located;

3. Matters concerning promoters (only applicable to individuals) and executive officers;

4. Matters concerning financial affairs, such as capital;

5. Matters concerning business plans;

6. Matters concerning human resources, business facilities, computer systems, and other physical facilities;

7. A plan for the composition of stockholders;

8. Other matters determined and publicly notified by the Financial Services Commission as necessary for examining requirements for preliminary authorization.

(2) An application for preliminary authorization under paragraph (1) shall be accompanied by the following documents: <Amended on Feb. 11, 2014; Jul. 28, 2016>

1. Articles of incorporation or draft articles of incorporation;

2. Documents stating locations and names of the head office, branches, and other places of business;

3. Documents attesting to decision-making on the establishment or application for authorization, such as meeting minutes, of the general meeting of promoters, inaugural general meeting of stockholders, or the board of directors;

4. Documents attesting that any promoter (only applicable where promoters are individuals) or executive officer does not fall under any subparagraph of Article 5 (1) of the Act on Corporate Governance of Financial Companies;

5. Financial statements and supplementary schedules for the last three years (excluding a corporation in the process of establishment; referring to financial statements and supplementary schedules from the date of establishment to the recent business year in cases of a corporation for whom three business years have not passed yet since the date of its establishment);

6. Business plans (including estimated financial statements) and estimated statement of income and expense for three business years following the commencement of business affairs;

Article 3-3(Objects subject to prior reporting on establishment plan of overseas local corporation) #

"Cases prescribed by Presidential Decree" in the provisions, with the exception of its subparagraphs, of Article 13 (2) of the Act means cases where the amount of investments by the relevant bank to an individual overseas local corporation (referring to an overseas local corporation under Article 13 (1) of the Act; hereinafter the same shall apply) or overseas branch (referring to an overseas branch under Article 13 (1) of the Act; hereinafter the same shall apply) exceeds 1/100 of the equity capital of the relevant bank, which fall under any of the following: <Amended on Feb. 11, 2014; May 29, 2018>

1. Where the relevant bank falls under any of the following cases:

(a) Where the relevant bank's capital adequacy ratio to risk-weighted assets based on the standards set by the Bank for International Settlement as at the end of the previous quarter falls short of the standards determined and publicly notified by the Financial Services Commission;

(b) Where the results of evaluating the relevant bank about its management soundness fall short of the standards determined and publicly notified by the Financial Services Commission;

2. Where the relevant bank intends to establish an overseas local corporation through investment in, or merger and acquisition with either of the following corporations, the size of which exceeds the size publicly notified by the Financial Services Commission in consideration of equity capital, etc. of the relevant bank:

(a) A corporation rated below the investment grade determined and publicly notified by the Financial Services Commission;

(b) A corporation for which the evaluation results of management soundness fall short of the standards determined and publicly notified by the Financial Services Commission;

3. Where an overseas local corporation or overseas branch is scheduled to run the services or perform business affairs other than those classified in the following:

(a) In cases of an overseas local corporation:

(i) Banking services referred to in Article 27 of the Act (hereinafter referred to as "banking services");

(ii) Incidental services referred to in Article 27-2 of the Act (hereinafter referred to as "incidental services");

(iii) Concurrent business affairs referred to in Article 28 of Act (hereinafter referred to as "concurrent business affairs");

Article 3-4(Restrictions on trade names) #

"Characters prescribed by Presidential Decree" in Article 14 of the Act means bank or banking (including its Korean transcription), or any other foreign language script having the same meaning (including its Korean transcription).

[This Article Added on Nov. 15, 2010]

Article 4(Request for submission of data) #

(1) In order to fix the scope of stocks held by the same person, a bank may request the related stockholder to submit the required data.

(2) Where the related stockholders in receipt of a request for submitting the data under paragraph (1) fail to submit it within 10 days from the date so requested, or submit false data, a bank shall fix the scope of stocks held by the same person on the basis of data known or available to the bank.

(3) Where a bank fixes the scope of stocks to be held by a same person under paragraphs (1) and (2), it shall notify the related stockholder thereof, and report the current stockholding status of the relevant bank by the same person to the Governor of the Financial Supervisory Service established under the Act on the Establishment of Financial Services Commission (hereinafter referred to as the "Governor of the Financial Supervisory Service"), as determined by the Governor of the Financial Supervisory Service.

(4) Where it is deemed that an error exists in the scope of stocks held by the same person as fixed by a bank, the Governor of the Financial Supervisory Service may directly request the related stockholder to submit the required data.

[This Article Wholly Amended on Nov. 15, 2010]

Article 4-2(Reporting on stockholding status) #

(1) "Persons prescribed by Presidential Decree" in the provisions, with the exception of the subparagraph, of Article 15 (2) of the Act means any of the following persons: <Amended on Dec. 30, 2014>

1. The Government;

2. The Korea Deposit Insurance Corporation established under the Depositor Protection Act;

3. The Korea Development Bank established under the Korea Development Bank Act (limited to cases where stocks are acquired at the expense of the Financial Stabilization Fund established under the Act on the Structural Improvement of the Financial Industry).

(2) "Matters prescribed by Presidential Decree" in the provisions, with the exception of the subparagraph, of Article 15 (2) of the Act means any of the following: <Amended on Feb. 11, 2014; Oct. 23, 2015; Oct. 21, 2021>

1. Matters concerning the same person;

2. Matters related to the following items in cases of a private equity fund exclusive for institutions, etc. (referring to a private equity fund exclusive for institutions, etc. under Article 15-3 (2) of the Act; hereinafter the same shall apply):

(a) Stockholders or partners;

(b) The amount of investments by limited partners or general partners of a private equity fund exclusive for institutions;

3. Matters concerning the status of stockholding and change, and reasons therefor;

4. Matters concerning the purpose of stockholding, and whether the private equity fund participates in management of a bank;

5. Other details necessary to verify changes in stockholding status and stock holding ratio, as determined and publicly notified by the Financial Services Commission.

(3) Pursuant to Article 15 (2) of the Act, the same person shall report the matters under the subparagraphs of paragraph (2) to the Financial Services Commission within 10 business days from the date the grounds for reporting under the subparagraphs of Article 15 (2) of the Act become applicable (in cases where the grounds for reporting become applicable even without acquiring or selling the bank's stocks, it refers to the date of becoming aware of the fact that such grounds are applicable; hereafter the same shall apply in paragraph (4)). In such cases, if the principal and specially related persons jointly file a report, such report may be jointly signed and filed by the person who holds the greatest number of stocks as the representative selected by and from among them. <Amended on Jun. 28, 2016; May 9, 2022>

Article 4-3(Processing period of approval for stockholding) #

"Period prescribed by Presidential Decree" in Article 15 (4) of the Act means 60 days from the date on which an application for approval is filed; provided, periods determined and publicly notified by the Financial Services Commission, including a period, etc. to supplement any deficiencies in an application for approval, shall not be included in the processing period.

[This Article Wholly Amended on Nov. 15, 2010]

Article 5(Requirements for excess holding of stocks by limit excess stockholders) #

A person who intends to hold stocks of a bank pursuant to Article 15 (5) of the Act shall meet the requirements stated in Appendix 1.

[This Article Wholly Amended on Nov. 15, 2010]

Article 6 #

Deleted. <Aug. 21, 2002>

Article 7 #

Deleted. <Aug. 21, 2002>

Article 8(Methods and procedures for approval of stockholding) #

(1) The Financial Services Commission may restrict the time, methods, etc. of acquiring stocks, where deemed necessary in light of the qualification requirements for applicants and the distribution of equities of the bank, etc. in granting approval under Article 15 (3) of the Act.

(2) A person who intends to obtain approval under Article 15 (3) of the Act shall submit an application for approval stating the following matters to the Financial Services Commission:

1. Matters concerning an applicant;

2. Status of holding stocks issued by a bank;

3. A plan for acquiring stocks issued by a bank.

(3) The following documents shall be attached to the application for approval under paragraph (3): <Amended on Oct. 30, 2018>

1. Articles of incorporation (limited to a corporation);

2. In cases of a foreign company, a document equivalent to a corporation registration certificate;

3. Financial statements as at the end of the latest business year and semi-annual financial statements since the end of the latest business year (limited to a corporation);

4. An audit report and a review report on financial statements under subparagraph 3 by an accounting auditor (referring to an auditor under subparagraph 7 of Article 2 of the Act on External Audit of Stock Companies; hereinafter the same shall apply);

5. Where a person intending to obtain approval is an institution to be inspected by the Financial Services Commission under Article 38 of the Act on the Establishment of Financial Services Commission, a financial condition calculated according to financial soundness standards applicable to such institution and an accounting auditor's review report on such document;

6. Other documents that are necessary for examination of approval requirements and determined and publicly notified by the Financial Services Commission.

(4) The Financial Services Commission in receipt of the application for approval under paragraph (2) shall check the following administrative information through joint use of administrative information under Article 36 (1) of the Electronic Government Act; provided, where the applicant does not agree to check a certified copy of a residential registration card under subparagraph 2, it shall have the applicant attach such document to the application for approval:

Article 9 #

Deleted. <Feb. 11, 2014>

Article 10(Approval for stockholding of private equity funds exclusive for institutions) #

(1) Deleted. <Feb. 11, 2014>

(2) In cases of a private equity fund exclusive for institutions, etc. that intends to obtain approval under Article 15-3 (2) of the Act, the executive partner of the private equity fund exclusive for institutions or an executive officer of such executive partner (including persons referred to in Article 401-2 (1) 3 of the Commercial Act; hereafter in this paragraph, the same shall apply) shall meet all of the following requirements: <Amended on Feb. 11, 2014; Oct. 23, 2015; Jul. 28, 2016; Oct. 21, 2021>

1. An executive partner shall be a corporation, and three years shall have elapsed since the establishment of the corporation;

2. Any executive officer of the executive partner shall not fall under any subparagraph of Article 5 (1) of the Act on Corporate Governance of Financial Companies;

3. The executive partner or the executive officer shall meet the following requirements; provided, cases where the Financial Services Commission finds that the degree of a violation, etc. is minor shall be excluded herefrom:

(a) The executive partner or the executive officer shall have no record of a criminal penalty equivalent to or heavier than a fine imposed for a violation of any of the statutes specified in Article 5 of the Enforcement Decree of the Act on Corporate Governance of Financial Companies (hereinafter referred to as "finance-related statutes"), the Monopoly Regulation and Fair Trade Act, or the Punishment of Tax Offenses Act during the latest five years;

(b) The executive partner or the executive officer shall not be the largest stockholder of an institution that was designated as an insolvent financial institution under the Act on the Structural Improvement of the Financial Industry or an institution whose business license or authorization was revoked under any finance-related statute nor a stockholder who holds voting stocks in excess of 10/100 of the total number of outstanding voting stocks or any of specially related person of such stockholder, during the latest five years; provided, the persons who meet the criteria determined and publicly notified by the Financial Services Commission, including the persons held not liable for insolvency by a court judgment or the persons who assume financial liability for insolvency, shall be excluded herefrom;

4. A private equity fund exclusive for institutions, etc. in which the person serves or served as an executive partner shall satisfy any of the following conditions:

Article 10-2(Restrictions on voting rights to stocks held in excess of limits) #

(1) "The period specified by Presidential Decree" in Article 16 (2) 1 (a) and 2 (a) of the Act means five business days from the day on which any of the trigger events pre-specified in accordance with objective and reasonable standards (hereinafter referred to as "trigger events") as at the time of issuing contingent bonds convertible into stocks of a bank under Article 33 (1) 3 of the Act (hereinafter referred to as "contingent bonds convertible into stocks of a bank") occurs.

(2) "The period specified by Presidential Decree" in the main clause of Article 16 (2) 1 (b) of the Act and the main sentence of Article 16 (2) 2 (b) of the Act means six months from the date on which a trigger event for contingent bonds convertible into stocks of a bank occurs.

[This Article Added on Jun. 28, 2016]

Article 11(Period to be regarded as non-financial business entities) #

(1) "Period prescribed by Presidential Decree" in Article 16-2 (1) of the Act means three months.

(2) "Requirements prescribed by Presidential Decree including financial soundness, etc." in Article 16-2 (2) of the Act means the requirements listed in Appendix 2. <Amended on Feb. 11, 2014>

[This Article Wholly Amended on Nov. 15, 2010]

Article 11-2(Requirements for approval of conversion plans) #

(1) A conversion plan under Article 16-2 (3) 1 of the Act (hereafter referred to as "conversion plan" in this Article) shall meet the following requirements:

1. An assumption constituting the premise for the conversion plan, such as the market outlook, shall be rational;

2. The conversion plan shall be able to be realized within the implementing period presented in view of the size of issued stocks and property of a non-financial company subject to disposition;

3. Quarterly implementation plans shall be contained.

(2) The Financial Services Commission shall quarterly check a conversion plan pursuant to Article 16-3 (2) of the Act.

(3) The Financial Services Commission may determine and publicly notified matters necessary to check the implementation of a conversion plan, including detailed standards for requirements under each subparagraph of paragraph (1) and the check methods, etc. under paragraph (2).

[This Article Wholly Amended on Nov. 15, 2010]

Article 11-3(Requirements for preventing conflicts of interest between funds) #

(1) "Systems prescribed by Presidential Decree" in Article 16-2 (3) 3 (a) of the Act means systems equipped with all of the following requirements:

1. To formulate standards for exercising voting rights to prevent conflicts of interest. In such cases, where a voting right is exercised for matters for which the standards for exercising voting rights are not formulated and the number of stocks for a bank retained by funds, etc. exceeds the number of the limit prescribed by Article 16-2 (1) of the Act, the relevant standards shall include details of exercising voting rights with no influence on resolution of the number of stocks calculated by subtracting the number of stocks exceeding the limit prescribed by Article 16-2 (1) of the Act from the number of stocks retained by funds, etc. among the number of stocks held by the stockholders present at the general meeting of stockholders of the bank that has issued stocks retained by funds, etc.;

2. To establish internal control standards to understand, evaluate, and manage the potential for conflicts of interest by controlling in such a manner that information obtained as a stockholder of a bank shall not be used for the purpose, other than exercising stockholder's right;

3. Other matters necessary to prevent conflicts of interest, which are determined and publicly notified by the Financial Services Commission.

(2) "Requirements prescribed by Presidential Decree" in Article 16-2 (3) 3 (c) of the Act means that funds, etc. comply with guidelines for assets management set forth under Article 79 of the National Finance Act.

[This Article Wholly Amended on Nov. 15, 2010]

Article 11-4(Procedures for examinations on qualifications of limit excess stockholders) #

(1) The Financial Services Commission shall periodically examine every half year whether stockholders, etc. holding stocks in excess of limit meet the excess holding requirements, etc. under Article 16-4 (1) of the Act; provided, when the said Commission deems it specially necessary, such as cases where a sign of illegal trade exists between stockholders, etc. holding stocks in excess of limit and banks, it may perform occasional examinations.

(2) Details regarding procedures, methods, etc. for examinations on qualifications for stockholders, etc. holding stocks in excess of limit under paragraph (1) shall be determined and publicly notified by the Financial Services Commission.

[This Article Wholly Amended on Nov. 15, 2010]

Article 12 #

Deleted. <Jul. 28, 2016>

Article 13 #

Deleted. <Jul. 28, 2016>

Article 13-2 #

Deleted. <Aug. 21, 2002>

Article 14 #

Deleted. <May 12, 1999>

Article 15 #

Deleted. <Jul. 28, 2016>

Article 16 #

Deleted. <Jul. 28, 2016>

Article 17 #

Deleted. <Jul. 28, 2016>

Article 17-2 #

Deleted. <Jul. 28, 2016>

Article 17-3 #

Deleted. <Jul. 28, 2016>

Article 17-4 #

Deleted. <Jul. 28, 2016>

Article 17-5 #

Deleted. <Jul. 28, 2016>

Article 18(Scope of incidental services) #

(1) "Services prescribed by Presidential Decree" in Article 27-2 (2) 11 of the Act means any of the following: <Amended on Feb. 11, 2014; Jun. 28, 2016>

1. Leasing of real estate; provided,, if real estate is not for business under Article 21-2 (4), the services shall be limited to those for leasing until the day by which real estate shall be disposed of under Article 39 of the Act;

2. Sale of revenue stamps, lotteries, gift certificates, admission tickets, etc. as an agent;

3. Advertisement utilizing physical facilities such as the website, books, publications, computer facilities, etc. of a bank as an agent;

4. Other services determined and publicly notified by the Financial Services Commission that are unlikely to fall under any subparagraph of Article 27-4 (4).

(2) "Documents prescribed by Presidential Decree, such as business plans, documents on a profit and loss forecast, etc." in Article 27-2 (3) of the Act means the following documents:

1. An operational plan;

2. An estimated statement on profits and losses;

3. Articles of incorporation;

4. A copy of the minutes of the board of directors that has resolved on the operation of incidental services;

5. Other documents determined and publicly notified by the Financial Services Commission, related to the operation of incidental services.

(3) Where a bank reports incidental services pursuant to the main clause, with the exception of the subparagraphs, of Article 27-2 (2) of the Act, the Financial Services Commission shall give public announcement of the following matters on the website:

1. The name of the bank;

2. The reporting date of incidental services;

3. The scheduled commencement date of incidental services;

4. Particulars on incidental services.

(4) Where the Financial Services Commission issues a restriction or corrective order pursuant to Article 27-2 (4) of the Act, it shall give public announcement of the details and reasons therefor on the website, etc.

[This Article Wholly Amended on Nov. 15, 2010]

Article 18-2(Scope of concurrent business affairs) #

(1) "Finance-related statutes prescribed by Presidential Decree" in Article 28 (1) 1 of the Act means finance-related statutes. <Amended on Jul. 28, 2016>

(2) "Financial business prescribed by Presidential Decree" in Article 28 (1) 1 of the Act means any of the following: <Amended on Sep. 9, 2013; Jun. 28, 2016; Aug. 4, 2020>

1. Sale, purchase and brokerage of derivatives under Article 3 (2) 2 of the Financial Investment Services and Capital Markets Act;

2. Sale and purchase of derivatives-combined securities (limited to derivatives-combined securities determined and publicly notified by the Financial Services Commission) under Article 4 (2) 5 of the Financial Investment Services and Capital Markets Act;

3. Underwriting and sale of state bonds, local government bonds and special bonds under Article 4 (3) of the Financial Investment Services and Capital Markets Act;

4. Sale and purchase of state bonds, local government bonds, special bond, and corporate bonds under Article 4 (3) of the Financial Investment Services and Capital Markets Act;

5. Brokerage of subscription and sale of state bonds, local government bonds and special bonds under Article 4 (3) of the Financial Investment Services and Capital Markets Act;

6. Collective investment business under Article 6 (4) of the Financial Investment Services and Capital Markets Act (limited to the collective investment business through an investment trust under Article 9 (18) 1 of the said Act; hereinafter referred to as "collective investment business" in Article 18-3);

7. Investment advisory business under Article 6 (6) of the Financial Investment Services and Capital Markets Act (hereinafter in Article 18-3, referred to as "investment advisory business");

8. Trust business under Article 6 (8) of the Financial Investment Services and Capital Markets Act (hereinafter in Article 18-3, referred to as "trust business");

9. Investment trading business of collective investment securities under Article 9 (21) of the Financial Investment Services and Capital Markets Act (hereinafter in Article 18-3, referred to as "investment trading business of collective investment securities");

10. Investment brokerage business of collective investment securities under Article 9 (21) of the Financial Investment Services and Capital Markets Act (hereinafter in Article 18-3, referred to as "investment brokerage business of collective investment securities");

Article 18-3(Control of conflicts of interest) #

(1) Pursuant to Article 28-2 (1) of the Act, a bank shall impartially manage the following business operations by recognizing and evaluating the possibility for occurrence of a conflict of interest between the business operations and blocking the exchange of information between such business operations: <Amended on Sep. 9, 2013; May 16, 2023>

1. Between the following business operations:

(a) Banking services [referring to banking services, incidental services, and concurrent business operations, excluding the business operations provided for in items (b) through (d), the business operations provided for in subparagraph 2 (c), and investment advisory business, investment trading business, etc. provided for in subparagraph 4 (b) (limited to cases specified in the main clause of the said subparagraph)];

(b) Collective investment business;

(c) Trust business;

(d) Business operations of a general administration company;

2. Between the following business operations:

(a) Collective investment business;

(b) Business operations of a general administration company;

(c) Business operations of a retirement pension trustee, trust business for secured bonds, entrusted business for the management of securitization assets and for debt collection of a special purpose company under Article 18-2 (4) 1;

3. Between investment advisory business and the business operations provided for in Article 18-2 (4) 5;

4. Between the following business operations where a person concurrently engages in trust business [excluding the business of safekeeping and management of collective investment property under Article 9 (20) of the Financial Investment Services and Capital Markets Act (hereinafter in this subparagraph, referred to as "collective investment property")] along with investment advisory business or investment trading business (referring to the investment trading business of collective investment securities, the investment brokerage business of collective investment securities, or the trading with repurchase/resale agreement; hereinafter in this subparagraph, the same shall apply):

(a) Collective investment business;

(b) Trust business (excluding the business of safekeeping and management of collective investment property), investment advisory business, and investment trading business, etc.;

Article 18-4(Request for reduction in interest rates) #

(1) A person who concludes a contract on credit granting with a bank may request a reduction in interest rates to the relevant bank in accordance with Article 30-2 (1) of the Act, in any of the following cases: <Amended on Aug. 4, 2020>

1. Where an individual concludes a contract of credit granting: Where the credit standing is deemed to have been improved through employment, promotion, increase of property or increase in personal credit score;

2. Where a person who is not an individual (including an individual business entity) concludes a contract on credit granting: Where the credit standing is deemed to have been improved through enhancement of financial position, or an increase in credit rating or personal credit score.

(2) A bank which received a request for a reduction in interest rates pursuant to paragraph (1) may consider matters determined and publicly notified by the Financial Services Commission, such as whether the improved credit standing affects the calculation of interest rates, in deciding whether to accept such request.

(3) The bank shall notify a person who requests a reduction in interest rates of a decision whether to accept such request and grounds therefor within 10 business days from the date of receipt of a request for a reduction in interest rates pursuant to paragraph (1) (not including the period from the date a person who requests a reduction in interest rates is required to supplement materials to the date such materials are submitted) in writing, or by telephone, text message, electronic mail or fax or in other manners similar thereto.

(4) Except as provided in paragraphs (1) through (3), matters regarding requirements, procedures, etc. for a request for a reduction in interest rates shall be determined and publicly notified by the Financial Services Commission.

[This Article Added on Jun. 11, 2019]

Article 19(Issuance of bank debentures) #

(1) "The limit specified by Presidential Decree" in the main clause, with the exception of the subparagraph, of Article 33 (1) of the Act means five times the amount of equity capital; provided,, if the issue amount of bank debentures exceeds five times the amount of equity capital due to the reduction of equity capital, a merger, conversion, etc., although no debenture defined in any subparagraph of Article 33 (1) of the Act (hereinafter referred to as "bank debentures") has been newly issued, the issuance of new bank debentures shall not be allowed until the amount of issuance thereof decreases to not more than five times the amount of equity capital. <Amended on Dec. 28, 2011; Jun. 28, 2016>

(2) Where a bank issues new bank debentures in order to redeem bank debentures issued, the amount of issuance of the bank debentures to be redeemed shall not be included in the limit on the issuance of debentures in the main clause, with the exception of the subparagraph, of Article 33 (1) of the Act. In such cases, the bank debentures to be redeemed shall be redeemed within one month after new bank debentures are issued. <Amended on Jun. 28, 2016>

(3) A bank may issue bank debentures by selling them for a pre-specified period.

(4) Deleted. <Jun. 28, 2016>

(5) "Debentures specified by Presidential Decree" in Article 33 (1) 5 of the Act means the debentures determined and publicly notified by the Financial Services Commission, among debentures that a bank issued in accordance with the standards of the Bank for International Settlements or the debentures that a person who engages in a financial business may issue in accordance with any finance-related statutes or any equivalent finance-related statutes of a foreign country. <Added on Jun. 28, 2016>

(6) Where debentures referred to in Article 33 (1) 2 through 4 of the Act (hereinafter referred to as "contingent convertible bonds") are issued, the time when the issuing bank is liquidated or bankrupt may be deemed the maturity of such debentures. <Added on Jun. 28, 2016>

(7) The trigger events under Article 33 (1) 2 through 4 of the Act shall meet all the following criteria: <Added on Jun. 28, 2016>

1. A trigger event shall be an event in which there is a significantly low possibility of a change or an occurrence caused by ordinary efforts of the bank that issued or intends to issue contingent convertible bonds, stockholders or investors of the issuing bank, or other persons who have an interest in the issuance of contingent convertible bonds and shall meet the criteria determined and publicly notified by the Financial Services Commission;

Article 19-2(Procedure of issuing contingent bonds convertible into stocks of bank holding company) #

(1) "Matters specified by Presidential Decree, including the total amount of the contingent bonds convertible into stocks of the bank holding company" in the provisions, with the exception of its subparagraphs, of Article 33-3 (1) of the Act means any of the following:

1. The total amount of the contingent bonds convertible into stocks of the bank holding company;

2. Matters that shall be stipulated by articles of incorporation of the unlisted bank and the listed bank holding company under Article 33-3 (11) of the Act;

3. Matters concerning the capital or reserve, in cases of an increase of the capital or reserve of the unlisted bank or the listed bank holding company;

4. The date of resolution by the board of directors of the unlisted bank under Article 33-3 (1) 1 of the Act and the date of resolution by the board of directors and the date of resolution by the general meeting of stockholders of the listed bank holding company under Article 33-3 (1) 2;

5. Matters to be otherwise stipulated pursuant to the proviso to Article 33-3 (8) of the Act;

6. A clause that contingent bonds convertible into stocks of the bank holding company may be issued without a special resolution under the latter part of Article 33-4 (1) of the Act.

(2) "Matters specified by Presidential Decree, including the total amount of the contingent bonds convertible into stocks of the bank holding company" in Article 33-3 (3) of the Act means:

1. The total amount of the contingent bonds convertible into stocks of the bank holding company;

2. The amount of each contingent bond convertible into stocks of the bank holding company;

3. The amount paid for each contingent bond convertible into stocks of the bank holding company;

4. Matters specified in paragraph (5).

(3) "Day specified by Presidential Decree" in Article 33-3 (6) of the Act means the tenth business day from the day on which a trigger event occurs.

(4) Matters that shall be stipulated in articles of incorporation of the unlisted bank and the listed bank holding company pursuant to Article 33-3 (11) of the Act are as follows:

1. A clause that the bank may issue the contingent bonds convertible into stocks of the bank holding company;

Article 19-3(Scope of debentures) #

"Rights prescribe by Presidential Decree" in Article 33-5 (1) of the Act means any of the following:

1. Rights that may be or must be indicated on Small and Medium Business Financial Bonds pursuant to Article 36-2 of the Industrial Bank of Korea Act;

2. Rights that may be or must be indicated on industrial Finance Bonds pursuant to Article 23 of the Korea Development Bank Act;

3. Rights that may be or must be indicated on negotiable certificates of deposit.

[This Article Added on Jun. 25, 2019]

Article 19-4(Application for registration of debentures) #

(1) Where a holder, pledgee or any other interested party of debentures, etc. pursuant to Article 33-5 (1) of the Act intends to register such rights, a bank which issues such debentures, etc. (hereinafter referred to as "issuing bank") shall submit a registration application stating the amount and serial number of each debenture and other matters necessary for registration thereof.

(2) Where the reason for registration pursuant to Article 33-5 (1) of the Act lies in an activity which has the other party, such as transfer or establishment of a pledge, a person who acquires rights by registration (including an agent; hereinafter referred to as "registered obligee") and the other party (including an agent; hereinafter referred to as "registered obligor") shall make a joint registration thereof; provided, where a written consent of a registered obligor is attached to a registration application, a registered obligee may independently make a registration thereof.

(3) Matters necessary for registration application, such as a registration application, methods and procedures for registration and documents to be submitted, pursuant to paragraphs (1) and (2) shall be determined and publicly notified by the Financial Services Commission.

[This Article Added on Jun. 25, 2019]

Article 19-5(Issuance of registration certificate) #

Where an issuing bank completes the registration of debentures, etc., it shall issue a registration certificate, as determined and publicly notified by the Financial Services Commission.

[This Article Added on Jun. 25, 2019]

Article 19-6(Application for cancellation of registration of debentures) #

(1) A person who applies for cancellation of registration of registered debentures, etc. shall state the amount and serial number of each debenture, etc. to be canceled in a registration cancellation application and submit the application attached with a registration certificate pursuant to Article 19-5.

(2) Matters necessary for application for cancellation of registration, such as a registration cancellation application under paragraph (1), methods and procedures for registration cancellation and documents to be submitted, shall be determined and publicly notified by the Financial Services Commission.

[This Article Added on Jun. 25, 2019]

Article 19-7(Cancellation of registration for missing registered obligor) #

(1) Where a registered obligee is unable to apply for cancellation of registration due to unknown whereabout of a registered obligor, he or she may request a public summons pursuant to the Civil Procedure Act.

(2) Where a registered obligee is unable to apply for cancellation of registration due to unknown whereabout of a registered obligor and a nullification judgement is made, he or she may apply for cancellation of registration by attaching an authenticated copy or certified copy of the nullification judgement to the application for cancellation of registration.

[This Article Added on Jun. 25, 2019]

Article 19-8(Preparation, keeping, and management of registry) #

(1) Upon receipt of an application for registration pursuant to Article 19-4 (1), an issuing bank shall prepare a registry, stating matters necessary for registration such as registration number, registration date, name and address of a registered obligee and grounds for registration.

(2) Matters necessary for methods and procedures of preparing a registry pursuant to paragraph (1) and keeping and management thereof shall be determined and publicly notified by the Financial Services Commission.

[This Article Added on Jun. 25, 2019]

Article 19-9(Precedence of rights to registered debentures) #

(1) The precedence of rights to registered debentures, etc. shall be in order of registration.

(2) The order of registration shall be according to the precedence number when registered in the same columns of the registration form, and shall be according to the receipt number when registered in separate columns.

(3) The precedence of additional registration shall be according to the precedence of main registration; provided, the precedence of additional registrations relating to the same main registration shall be in order of additional registration.

[This Article Added on Jun. 25, 2019]

Article 19-10(Deposit of registered bearer debentures) #

In applying Articles 491 (4) and 492 (2) of the Commercial Act and Articles 45 (2) and 84 (2) of the Secured Bond Trust Act to a holder of a registered bearer debenture, etc., deposit of a registration certificate shall be deemed deposit of the securities or certificate.

[This Article Added on Jun. 25, 2019]

Article 20(Standards for management instruction) #

(1) The standards for management instruction provided in Article 34 (2) of the Act shall include the following matters: <Amended on Dec. 28, 2011>

1. Matters concerning the standards for a bank to hold equity capital to address credit risk of the bank, such as the ratio of equity capital to risk-weighted assets based on the standards of the Bank of International Settlement;

2. Matters concerning the forward-looking criteria applicable to assets held by a bank, such as loan credits, etc.;

3. Matters concerning the standards for controlling credit granting to persons determined and publicly notified by the Financial Services Commission as the integrated control of credit granting is deemed necessary;

4. Matters concerning the standards for holding liquid assets against floating debts;

5. Other matters determined and publicly notified by the Financial Services Commission to secure soundness of a bank.

(2) The Financial Services Commission may request the relevant bank to submit a plan or a contract to improve the vulnerabilities or may conclude an agreement with the relevant bank to improve its management, as part of the measures pursuant to Article 34 (4) of the Act, if the Commission considers that the bank fail to comply with the standards for management instruction provided in paragraph (1) or determines to have vulnerabilities in its management. <Added on Dec. 28, 2011>

(3) The Financial Services Commission shall determine and publicly notify the request to submit a plan or a contract provided in paragraph (2), procedures and methods for concluding an agreement and other necessary matters. <Added on Dec. 28, 2011>

[This Article Added on Nov. 15, 2010]

[Title Amended on Dec. 28, 2011]

Article 20-2(Specific types of unsound business conduct) #

Specific types of, or criteria for, the unsound business conduct under Article 34-2 (1) of the Act are as follows: <Amended on May 29, 2018>

1. Issuing a cashier's check or a negotiable certificate of deposit to a bank user or making the entry of a deposit without receiving any deposit from a bank user in order to give an undue benefit to the bank user;

2. Aiding and abetting a bank user to borrow a loan, deposit the borrowed money, and then borrow another loan secured by the deposit, in order to assist the bank user in unlawful transactions, such as evading a tax, window-dressing accounts, and making an unlawful inside transaction; or aiding and abetting other people to issue and sell a negotiable certificate of deposit or a debenture under Article 4 (3) of the Financial Investment Services and Capital Markets Act in the name of any bank user;

3. Providing an interest in property to a bank user in excess of the normal level determined and publicly notified by the Financial Services Commission in relation to banking services, incidental services, or concurrently-provided services (excluding services under Article 18-2 (2) 1 through 6, 8 through 10, and 13 through 18);

4. Using information, etc. obtained in connection with banking services, incidental services, or concurrently-provided services (hereinafter referred to as "banking services, etc.") in order to utilize the information, etc. for a transaction in which a conflict of interest is likely to arise between the bank and a bank user or between a specific bank user and any other bank user;

5. Other acts determined and publicly notified by the Financial Services Commission that undermine sound operation of banks or sound practices in credit transaction in connection with banking services, etc.

[This Article Added on Jun. 28, 2016]

[(Previous) Article 26-2 moved to Article 26-3 <Nov. 15, 2010>]

Article 20-3(Preventive measures against financial accidents) #

(1) "Measures prescribed by Presidential Decree" in Article 34-3 (1) 1 of the Act means any of the following:

1. Measures for preventing suspicious criminal acts of executive officers and/or employees of the bank, such as fraud, embezzlement, misappropriation, theft, and bribery;

2. Measures for preventing recurrence of financial accidents that occurred in the past or similar financial accidents;

3. Other measures determined and publicly notified by the Financial Services Commission for preventing acts that hinder the protection of bank users by handling business affairs illegally or wrongfully.

(2) "Measures prescribed by Presidential Decree" in Article 34-3 (1) 2 of the Act means internal inspection plans and guidelines for conducting inspections in regard to business operations of branch offices, including monitoring and evaluation of the performance of preventive measures against financial accidents.

(3) "Measures prescribed by Presidential Decree" in Article 34-3 (1) 3 of the Act means the guidelines and procedure for the use of information of bank users, which shall be observed in the course of promotion, sales, etc. of bank products, such as deposits and loans, for the protection of information of bank users. <Amended on Mar. 23, 2021>

(4) "Measures prescribed by Presidential Decree" in Article 34-3 (1) 4 of the Act means measures for developing and implementing inspection techniques necessary for business affairs with a high possibility of financial accidents, such as electronic computerization and cash transportation, and preventive measures against financial accidents in relation to such business affairs.

(5) If the amount of a financial accident (referring to the amount of the loss that a bank sustains upon the occurrence of a financial accident without subtracting the amount that is expected to be recovered; hereinafter the same shall apply) is at least 300 million, the bank shall report details of the financial accidents to the Financial Services Commission in accordance with Article 34-3 (3) of the Act by the day immediately after the day on which the financial accident occurs and shall give a public notice thereof through the bank's website and by other means within 15 days from the date of occurrence of the financial accident; provided, if the amount of the relevant financial accident is less than one billion won, the relevant bank many not give a public notice thereof.

(6) Matters necessary for the procedure, methods, etc. for a report and public notice made under Article 34-3 (3) of the Act shall be determined and publicly notified by the Financial Services Commission.

Article 20-4(Scope of persons sharing credit risk) #

"Person with whom it shares credit risk prescribed by Presidential Decree" in the main clause of Article 35 (1) of the Act means companies that belong to an enterprise group defined by subparagraph 11 of Article 2 of the Monopoly Regulation and Fair Trade Act. <Amended on Dec. 28, 2021>

[This Article Wholly Amended on Nov. 15, 2010]

[Moved from Article 20-2; (Previous) Article 20-4 moved to Article 20-6 <Jun. 28, 2016>]

Article 20-5(Grounds for exceeding credit ceiling) #

(1) Credit granted by a bank may exceed 25/100 of its equity capital on the grounds prescribed by Article 35 (1) 1 of the Act in any of the following cases:

1. Where any credit is additionally granted to a company for which the rehabilitation procedure under the Debtor Rehabilitation and Bankruptcy Act is in progress, or for which management normalization is jointly implemented by banks for corporate restructuring, etc.;

2. Where an additional credit is extended to a person who acquires a company falling under subparagraph 1 in compliance with acquisition agreement;

3. Where the Financial Services Commission recognizes that it is essential for industrial development, such as facilitating projects for infrastructure, or the stabilizing the national life.

(2) Credit granted by a bank may exceed 25/100 of its equity capital on the grounds prescribed by Article 35 (1) 2 of the Act in any of the following cases:

1. Where the value converted into Korean won increases following a fluctuation of exchange rates;

2. Where the equity capital of the relevant bank is reduced;

3. Where the constitution of same borrowers changes;

4. Where a merger or a transfer and/or acquisition of business occurs among the companies subjected to credit granting;

5. Where the Financial Services Commission recognizes that the credit ceiling is exceeded due to inevitable reasons, such as radical changes in economic conditions, and without any causes attributable to a bank.

[This Article Wholly Amended on Nov. 15, 2010]

[Moved from Article 20-3; (Previous) Article 20-5 moved to Article 20-7 <Jun. 28, 2016>]

Article 20-6(Grounds for extension of period for credit ceiling) #

"Cases falling under extenuating circumstances prescribed by Presidential Decree" in the proviso to Article 35 (2) of the Act means any of the following cases: <Amended on Jun. 28, 2016>

1. Where it is impracticable to make a recovery by the due date because the maturity of credit granting provided has yet to arrive;

2. Where grounds referred to in Article 20-5 (2) 1 or 2 continue to exist for a long period and the recovery of such credit granting is likely to significantly harm the business stability of the party to whom credit has been granted;

3. Other cases corresponding thereto under subparagraphs 1 and 2 where the Financial Services Commission recognizes that a prolonged excess of the credit for a specified period does not significantly harm the asset quality of the relevant banks.

[This Article Wholly Amended on Nov. 15, 2010]

[Moved from Article 20-4; (Previous) Article 20-6 moved to Article 20-8 <Jun. 28, 2016>]

Article 20-7(Credit ceiling on large stockholders of banks) #

(1) "Ratio prescribed by Presidential Decree" in Article 35-2 (1) of the Act means 25/100 of the equity capital.

(2) The amount equivalent to the contribution ratio to the relevant bank by a large stockholder provided for in Article 35-2 (1) of the Act shall be the amount obtained by multiplying the ratio, computed by dividing the number of voting stocks of the relevant bank a large stockholder retains by the gross number of voting stocks the said bank issued, by the equity capital of the relevant bank.

(3) "Ratio prescribed by Presidential Decree" in Article 35-2 (2) of the Act means 25/100 of the equity capital.

(4) Where a bank exceeds a ceiling prescribed in paragraphs (1) through (3) due to any of the following causes, notwithstanding that it has not extended any additional credit, it shall submit a plan for making it back in compliance with the ceiling to the Financial Services Commission within three months from the occurrence of such causes, and shall obtain its approval:

1. Where the value converted into Korean won increases following a fluctuation of exchange rates;

2. Where the equity capital of the relevant bank is reduced;

3. Where the constitution of the same borrowers changes;

4. Where a merger or acquisition of the business occurs among the companies;

5. Other inevitable causes recognized by the Financial Services Commission.

(5) "Amount prescribed by Presidential Decree" in the former part of Article 35-2 (4) and (5) of the Act means the value of a single transaction equivalent to 10/10,000 of the equity capital, or five billion won, whichever is a lesser amount. In such cases, the detailed standard for computing a single transaction shall be determined and publicly notified by the Financial Services Commission.

(6) "Transaction prescribed by Presidential Decree" in the former part of Article 35-2 (4) of the Act means a transaction to acquire debentures issued by offering or sale under Article 9 (7) and (9) of the Financial Investment Services and Capital Markets Act.

(7) Pursuant to Article 35-2 (6) of the Act, a bank shall give a public notice of the scale of credit granting to large stockholders as at the end of each quarter, the amount of credit granting increased or decreased during a quarter, terms and conditions of transactions for credit granting, and other matters determined and publicly notified by the Financial Services Commission within one month after the end of each quarter.

Article 20-8(Acquisition limits on equity securities issued by large stockholders) #

(1) "Ratio prescribed by Presidential Decree" in the main clause of Article 35-3 (1) of the Act means 1/100 of the equity capital.

(2) An acquisition of equity securities (referring to equity securities provided in Article 4 (4) of the Financial Investment Services and Capital Markets Act; hereinafter the same shall apply) by a bank under a trust, for which a truster (including a person designated by the truster) designates the method for operating money that is trust property, shall not be deemed an acquisition of equity securities pursuant to the main clause of Article 35-3 (1) of the Act.

(3) "Period set by Presidential Decree" in Article 35-3 (3) of the Act means one year; provided, where the Financial Services Commission deems that it is inevitable in consideration of the size of equity securities owned in excess by the bank, and the situations of stock markets, etc., it may extend such period.

(4) "Amount prescribed by Presidential Decree" in the former part of Article 35-3 (4) and (5) of the Act means the lesser of the value of a single transaction (in cases of Article 35-3 (4) of the Act, excluding the amount acquired at the overseas markets, which are the stock markets or those similar thereto under the Financial Investment Services and Capital Markets Act) equivalent to 10/10,000 of the equity capital or five billion won.

(5) Pursuant to Article 35-3 (6) of the Act, a bank shall give public notice of the scale of the issued equity securities acquired by the large stockholders as at the end of each quarter, the amount of the owned equity securities increased or decreased during a quarter, acquisition price of owned equity securities, and other matters determined and publicly notified by the Financial Services Commission within one month after the end of each quarter.

[This Article Wholly Amended on Nov. 15, 2010]

[Moved from Article 20-6; (Previous) Article 20-8 moved to Article 20-10 <Jun. 28, 2016>]

Article 20-9(Prohibition of exercising undue influence by large stockholders) #

"Acts prescribed by Presidential Decree" in subparagraph 4 of Article 35-4 of the Act means the following acts: <Amended on Jun. 28, 2016>

1. Demanding to establish disadvantageous terms and conditions of a contract, such as interest rate, security, etc., without any justifiable ground, when extending credit to competitive business entities;

2. Having a bank gratuitously transfer its assets to a public service corporation, etc. provided for in Article 20-7 (8), or trade and/or exchange its assets or extend credit under conditions that are substantially unfavorable to the relevant bank compared to ordinary terms and conditions of transactions.

[This Article Wholly Amended on Jul. 8, 2013]

[Moved from Article 20-7 <Jun. 28, 2016>]

Article 20-10(Restrictions on transactions with large stockholders) #

(1) "Cases as prescribed by Presidential Decree" in Article 35-5 (2) of the Act means cases where large stockholders are highly likely to conduct an illegal transaction with the relevant bank, falling under any of the following cases: <Amended on Aug. 27, 2013>

1. Where its liabilities exceed its assets;

2. Where the bank that has granted the largest amount of credit to large stockholders (excluding a bank in which the relevant large stockholder is the large stockholder) is classified below the standards determined by the Financial Services Commission as a result of evaluation on credit risk of the relevant large stockholder in accordance with the forward-looking criteria determined and publicly notified by the Financial Services Commission;

3. Where at least two credit rating agencies engaging in credit rating service authorized pursuant to Article 335-3 of the Financial Investment Services and Capital Markets Act rate a bank in the non-investment grade category.

(2) "Measures prescribed by Presidential Decree against the bank, including, but not limited to, issuing an order for the bank to restrict credit granting to the large stockholder" in Article 35-5 (2) of the Act means the following measures: <Amended on Jun. 28, 2016>

1. Prohibition of new credit granting to the large stockholders;

2. Restrictions on transactions under Article 20-7 (6);

3. Prohibition of new acquisition of stocks issued by the large stockholders.

[This Article Wholly Amended on Nov. 15, 2010]

[Moved from Article 20-8 <Jun. 28, 2016>]

Article 21(Limit on investments in subsidiaries) #

(1) "Ratio prescribed by Presidential Decree" in Article 37 (2) 1 of the Act means 20/100. <Amended on Jun. 28, 2016>

(2) Pursuant to Article 37 (2) of the Act, the Financial Services Commission may determine the following conditions as the requirements for banks that are eligible to acquire the equity securities issued by other companies:

1. Management status of a bank;

2. Management status of a subsidiary, etc. (referring to a subsidiary, etc. in the proviso to Article 37 (2) of the Act; hereinafter the same shall apply) prior-invested by a bank;

3. Gross ceiling on investments in a subsidiary, etc.

(3) In the application of Article 37 (2) 2 of the Act, when computing the total amount of investment, the amount of investment in a trust account stipulating for the replenishment of capital shall be included, but an amount invested under statutes and amount for corporate restructuring, etc., recognized by the Financial Services Commission shall be excluded.

(4) "Ratio prescribed by Presidential Decree" in Article 37 (2) 2 of the Act means 30/100.

(5) "Ceiling prescribed by Presidential Decree" in Article 37 (3) 1 of the Act means 10/100 of the equity capital of the relevant bank for respective subsidiaries, etc. and 20/100 of the equity capital of the relevant bank for all subsidiaries, etc.

(6) "Cases prescribed by Presidential Decree, such as merger, etc. of the subsidiaries, etc. of the bank" in Article 37 (3) 1 of the Act means any of the following cases:

1. Where it is essential to grant credit to subsidiaries, etc., the merger of which is resolved at the board of directors of a bank;

2. Where banks have agreed to jointly grant credit to subsidiaries, etc. which is implementing the normalization of their management.

(7) Where a bank exceeds the ceilings stipulated in paragraphs (5) due to any of the following causes, notwithstanding that it has not granted any additional credit, it shall submit a plan for making it to satisfy the ceilings to the Financial Services Commission within one month from the occurrence of such causes:

1. Where the value converted into Korean won increases following a fluctuation of exchange rates;

2. Where the equity capital of the relevant bank is reduced;

Article 21-2(Limit on investment in securities) #

(1) "Ratio prescribed by Presidential Decree" in the former part, with the exception of the items, of subparagraph 1 of Article 38 of the Act means 100/100. <Amended on Dec. 9, 2014>

(2) "Those prescribed by Presidential Decree" in subparagraph 1 (c) of Article 38 of the Act means derivatives-combined securities under Article 4 (7) of the Financial Investment Services and Capital Markets Act, the redemption period of which exceeds three years.

(3) "Securities prescribed by Presidential Decree" in subparagraph 1 (d) of Article 38 of the Act means beneficiary certificates, investment contract securities, and securities depositary receipts under Article 4 (2) of the Financial Investment Services and Capital Markets Act, the redemption period of which exceeds three years.

(4) "Real estate for business purposes prescribed by Presidential Decree" in subparagraph 2 of Article 38 of the Act means any of the following real estate:

1. Business facilities, such as a place of business and office;

2. Training facilities;

3. Welfare facilities;

4. Land, buildings, and its appurtenant facilities to be used for purposes stipulated under subparagraphs 1 through 3.

(5) "Ratio prescribed by Presidential Decree" in subparagraph 3 of Article 38 of the Act means 60/100. <Added on Dec. 9, 2014>

(6) Where a bank has come to exceed the limit under paragraph (5) as its equity capital inevitably decreased due to an occurrence of losses, etc. though it had not acquired any new real estate for business purposes under paragraph (4) (hereinafter in this paragraph, referred to as "real estate for business purposes"), it shall endeavor to satisfy the said limit within one year from the date on which it exceeded the limit; provided, the Financial Services Commission may extend the said period if deemed inevitable in view of the size of the real estate for business purposes excessively owned by a bank, situations of real estate markets, etc. <Amended on Dec. 9, 2014>

[This Article Wholly Amended on Nov. 15, 2010]

Article 21-3 #

Deleted. <Nov. 15, 2010>

Article 22 #

Deleted. <Aug. 21, 2002>

Article 23(Timing for branches of foreign banks to accumulate legal reserves) #

Where a branch of a foreign bank (referring to a branch of a foreign bank provided for in the main clause of Article 59 (1) of the Act; hereinafter the same shall apply) accumulates the legal reserves pursuant to Article 40 of the Act, the term "whenever it pays dividends on earned net profits" under Article 40 of the Act shall be construed as "when it settles accounts."

[This Article Wholly Amended on Nov. 15, 2010]

Article 24(Public disclosure of management) #

(1) "Matters prescribed by Presidential Decree" in Article 43-3 of the Act means the following matters:

1. Matters concerning financial affairs, and profits and losses;

2. Matters concerning fund-raising and operation;

3. Details of sanctions under Article 53 of the Act or measures or dispositions under Articles 10 and 14 of the Act on the Structural Improvement of the Financial Industry, if any.

(2) The Financial Services Commission may set forth detailed standards concerning matters to be disclosed as referred to in paragraph (1) 1 through 3.

[This Article Wholly Amended on Nov. 15, 2010]

Article 24-2(Reporting for regular general meeting of shareholders) #

"Amount prescribed by Presidential Decree" in Article 43-4 (1) 2 of the Act means 10 billion won.

[This Article Added on Aug. 22, 2023]

[(Previous) Article 24-2 moved to Article 24-3 <Aug. 22, 2023>]

Article 24-3(Reports on modification of articles of incorporation) #

(1) Where a bank falls under any subparagraph of Article 47 of the Act, it shall report such fact to the Financial Services Commission without delay; provided, where a bank falls under subparagraph 7 of Article 47 of the Act and, as a limited partner, invests in a subsidiary company, etc. determined and publicly notified by the Financial Service Commission, it may report such fact semi-annually. <Amended on Dec. 9, 2014>

(2) "Where it performs acts prescribed by Presidential Decree" in subparagraph 10 of Article 47 of the Act means cases where a bank falls under any of the following cases: <Amended on May 9, 2022>

1. Where an overseas local corporation or overseas branch of a bank is subject to a sanction (excluding monetary sanctions of less than USD2,000) from a local supervisory agency, or major changes, such as a financial accident, occur;

2. Where a branch of a foreign bank falls under any of the following cases:

(a) Where the articles of incorporation, trade name or capital of a foreign bank is altered;

(b) Where the head of a foreign bank is dismissed;

(c) Where a foreign bank is merged with another bank or is dissolved;

3. Where part of business is transferred or acquired; provided, this shall not apply where authorization is obtained under Article 55 (1) 3 of the Act;

4. Where a bank falls under a matter determined and publicly notified by the Financial Services Commission.

[This Article Wholly Amended on Nov. 15, 2010]

[Moved from Article 24-2; (Previous) Article 24-3 moved to Article 24-4 <Aug. 22, 2023>]

Article 24-4(Requests for holding reserves) #

"Measures prescribed by Presidential Decree, such as holding reserves for unsound assets" in Article 50 of the Act means the following measures:

1. To hold reserves for unsound assets;

2. To change the book values of assets;

3. To write off valueless assets.

[This Article Wholly Amended on Nov. 15, 2010]

[Moved from Article 24-3; (Previous) Article 24-4 moved to Article 24-5 <Aug. 22, 2023>]

Article 24-5(Modification of terms and conditions) #

(1) "Cases prescribed by Presidential Decree" in the proviso of Article 52 (1) of the Act means any of the following cases:

1. Where establishing terms and conditions related to financial transactions (hereinafter referred to as "terms and conditions"), which include contents that are different from the contents, methods, forms, etc. of the existing financial services;

2. Where modifying terms and conditions to reduce bank users' rights or expand their obligations, in any of the following cases:

(a) Where the modified terms and conditions apply to existing users who have been subject to the terms and conditions before the modification;

(b) Where they contain contents that are different from the contents, methods, forms, etc. of the existing financial services;

3. Other cases determined and publicly notified by the Financial Services Commission for the protection of bank users, etc.

(2) Notwithstanding paragraph (1), the following cases are not subject to the prior reporting under the proviso of Article 52 (1) of the Act: <Amended on May 9, 2022>

1. Where establishing or modifying the terms and conditions to contain the contents the same as or similar to the terms and conditions reported under Article 52 (1) of the Act;

2. Where establishing or modifying the terms and conditions in accordance with an order under Article 44 of the Act or a recommendation for modification under Article 52 (5) of the Act;

3. Where establishing or modifying the terms and conditions upon the establishment or modification of the standard terms and conditions under Article 19-3 of the Act on the Regulation of Terms and Conditions;

4. Where establishing or modifying the terms and conditions upon the enactment or amendment of statutes or regulations;

5. Other cases determined and publicly notified by the Financial Services Commission which are deemed unlikely to significantly affect the rights or obligations of users.

[This Article Added on Dec. 31, 2019]

[Moved from Article 24-4; (Previous) Article 24-5 moved to Article 24-6 <Aug. 22, 2023>]

Article 24-6(Provision of important information in financial transactions) #

(1) Deleted. <Mar. 23, 2021>

(2) A bank shall take the following measures to protect the bank users, including depositors, etc. and to prevent financial disputes pursuant to Article 52-2 (2) of the Act: <Amended on Mar. 23, 2021>

1. To publish matters bank users need to attend to, such as interest rates, cancellation of contracts, and matters concerning the protection of depositors;

2. To provide relevant information and data, and explain details thereof in each stage of a financial transaction (excluding transactions made under contracts for financial products under the Act on the Protection of Financial Consumers) according to the following classifications; provided, the provision and explanation of information and data may be omitted in cases determined and publicly notified by the Financial Services Commission, such as contract renewal under the same terms and conditions as those of the contract already concluded:

(a) Where recommending the conclusion of a contract: Main contents of the contract, such as contract conditions and transaction costs;

(b) Where a bank user makes a subscription: Terms and conditions;

(c) Where concluding a contract: Contract documents.

(3) Any bank user (excluding financial consumers under the Act on the Protection of Financial Consumers) may apply for an inspection of terms and conditions and contract documents. In such cases, a bank shall comply therewith unless there is good cause. <Amended on Mar. 23, 2021>

(4) Except as provided in paragraphs (2) and (3), matters necessary for providing important information in financial transactions shall be determined and publicly notified by the Financial Services Commission. <Amended on Mar. 23, 2021>

[This Article Added on Nov. 15, 2010]

[Title Amended on Mar. 23, 2021]

[Moved from Article 24-5 <Aug. 22, 2023>]

Article 24-7(Measures for protecting employees providing customer service) #

"Measures prescribed by Presidential Decree, including legal measures" in Article 52-4 (1) 4 of the Act means any of the following cases:

1. Where it is considered that a customer's abusive language, sexual harassment, physical violence, or any similar offense (hereinafter referred to as "abusive language, etc.") violates any provision concerning criminal punishment in a relevant Act and the employee who sustains damage by such act requests to take a measure: Filing a criminal complaint with the relevant investigative authority;

2. Where a customer's abusive language, etc. does not violate any provision concerning criminal punishment in a relevant Act but it is considered necessary to take a measure, taking into consideration of the degree of damage to an employee from such act, the possibility of any damage to the employee and other employees in the future, etc.: Requesting the relevant investigative authority to take necessary measures;

3. Rendering administrative and procedural assistance to employees in taking measures personally against a customer who uses abusive language, etc., such as filing criminal complaints or charges with the relevant investigative authority and claiming for damage;

4. Conducting educational programs with regard to the code of conduct of employees, etc. to prevent or respond to customers' abusive language, etc.;

5. Other measures determined and publicly notified by the Financial Services Commission as necessary for protecting employees from customers' abusive language, etc.

[This Article Added on Jun. 28, 2016]

[Moved from Article 24-6; (Previous) Article 24-7 moved to Article 24-8 <Dec. 31, 2019>]

Article 24-8(Sanctions against private equity funds exclusive for institutions, etc.) #

(1) "Other measures prescribed by Presidential Decree" in Article 53 2 (3) 5 of the Act means any of the following measures:

1. Request or recommendation for improved business practices;

2. Other measures the Financial Services Commission can take under the Act, this Decree and other related statutes or regulations.

(2) "Other measures prescribed by Presidential Decree" in Article 53 2 (4) 1 (e) of the Act means a measure provided in any subparagraph of paragraph (1).

(3) "Other measures prescribed by Presidential Decree" in Article 53 2 (4) 2 (e) of the Act means any of the following measures:

1. A caution;

2. Other measures the Financial Services Commission can take under the Act, this Decree and other related statutes or regulations.

(4) "Other measures prescribed by Presidential Decree" in Article 53 2 (4) 3 (f) of the Act means any of the following measures:

1. A warning;

2. Other measures the Financial Services Commission can take under the Act, this Decree and other related statutes or regulations.

[This Article Wholly Amended on Nov. 15, 2010]

[Title Amended on Oct. 21, 2021]

[Moved from Article 24-7; (Previous) Article 24-8 moved to Article 24-9 <Dec. 31, 2019>]

Article 24-9(Authorization for merger) #

(1) Where the Financial Services Commission intends to authorize a division or merger pursuant to Article 55 (1) 1 of the Act, it shall examine whether the following requirements are satisfied:

1. Not to impede the efficiency of the financial industry and maintenance of practices in credit transactions;

2. Business plans and organizational operation plans following the division or merger shall be appropriate;

3. Changes in the ownership structure of the bank resulting from the division or merger shall be in accordance with the statutes and regulations;

4. There shall be no defects in implementing the procedures required under the Commercial Act, the Financial Investment Services and Capital Markets Act, and other related statutes and regulations.

(2) Where the Financial Services Commission intends to authorize the dissolution or closure of the banking business under Article 55 (1) 2 of the Act, it shall examine whether the following requirements are satisfied:

1. It shall be inevitable in light of the management and financial status of the relevant bank;

2. It shall not impede the protection of users including depositors, etc., and maintenance of practices in credit transactions;

3. There shall be no defects in implementing the procedures required under the Commercial Act, the Financial Investment Services and Capital Markets Act, and other related statutes and regulations.

(3) Paragraph (1) shall apply mutatis mutandis to authorizations for acquisition of business under Article 55 (1) 3 of the Act, and paragraph (2) shall apply mutatis mutandis to the authorization of the transfer of business.

(4) The Financial Services Commission may determine specific requirements, application documents and other necessary matters for the authorization under Article 55 (1) of the Act.

(5) "Closure of part of major banking services prescribed by Presidential Decree" in Article 55 (1) 2 of the Act means the closure of part of banking services which falls under any of the following subparagraphs: <Added on Aug. 22, 2023>

1. Closure of business, the sum of assets of which is at least 10/100 of the total assets indicated in the financial statements as of the end of the immediately preceding business year (in cases of a bank that prepares consolidated financial statements under the main clause of Article 41 (1) of the Act, referring to the consolidated financial statements; hereafter the same shall apply in this Article);

Article 24-10(Authorization for establishment of branches of foreign banks) #

(1) Where the Financial Services Commission intends to authorize the establishment of a branch or agency of a foreign bank pursuant to Article 58 (1) of the Act, it shall verify matters in relation to the head office and representative of the relevant foreign bank.

(2) Where the Financial Services Commission intends to authorize the closure of a branch or agency of a foreign bank pursuant to Article 58 (1) of the Act, it shall examine whether it is in conformity with the following:

1. Plans for liquidating the assets and debts following the closure shall be appropriate and shall not impede the protection of creditors including domestic depositors, etc.;

2. Plans for measures, such as the payment of retirement allowances to domestic partners, shall be appropriate.

(3) The Financial Services Commission may determine specific requirements, application documents, and other necessary matters for the authorization under Article 58 (1) of the Act.

[This Article Wholly Amended on Nov. 15, 2010]

[Moved from Article 24-9 <Dec. 31, 2019>]

Article 25(Scope of domestically-held assets) #

Scope of assets to be held in the Republic of Korea by a branch of a foreign bank under Article 62 (1) of the Act shall be the assets equivalent to the operating funds under Article 26.

[This Article Wholly Amended on Nov. 15, 2010]

Article 26(Fictitious capital stock) #

Pursuant to Article 63 of the Act, any of the following funds recognized by the Financial Services Commission as operating funds of a branch of a foreign bank shall be deemed its capital stock: <Added on Jun. 28, 2016>

1. Funds in Korean currency, which the head office of a foreign bank has supplied to its branch office by selling funds in a foreign currency to any of the following financial institutions, for the purposes of the establishment of the branch office and business activities:

(a) The Bank of Korea established under the Bank of Korea Act;

(b) The Korea Development Bank established under the Korea Development Bank Act;

(c) The Export-Import Bank of Korea established under the Export-Import Bank of Korea Act;

(d) The Industrial Bank of Korea established under the Industrial Bank of Korea Act;

(e) The Nonghyup Bank established under the Agricultural Cooperatives Act;

(f) The Suhyup Bank established under the Fisheries Cooperatives Act;

(g) A bank authorized under Article 8 of the Act;

2. Funds transferred from the reserves by a branch of a foreign bank provided in Article 40 of the Act;

3. Funds transferred from earned surplus carried forward by a branch of a foreign bank prior-established in the Republic of Korea to establish an additional branch of the foreign bank;

4. Funds in Korean currency raised by selling funds in foreign currency by a branch of a foreign bank to the Bank of Korea;

5. Funds operated in the Republic of Korea, among those borrowed from the head office or overseas branch of a foreign bank with a maturity of more than one year.

[This Article Wholly Amended on Nov. 15, 2010]

Article 26-2(Entrustment of authority) #

(1) The Financial Services Commission shall entrust authority stipulated in each subparagraph of Appendix 3 to the Governor of the Financial Supervisory Service pursuant to Article 65 of the Act.

(2) The Governor of the Financial Supervisory Service shall report the details on processing affairs entrusted under paragraph (1) to the Financial Services Commission every six months; provided, the reporting period may be separately determined for affairs determined and publicly notified by the Financial Services Commission.

[This Article Added on Nov. 15, 2010]

[(Previous) Article 26-2 moved to Article 26-3 <Nov. 15, 2010>]

Article 26-3(Criteria for imposition of penalty surcharges) #

(1) The criteria for imposing a penalty surcharge under Article 65-3 of the Act shall be as specified in Appendix 3-2. <Amended on Oct. 17, 2017>

(2) Where the Financial Services Commission intends to impose a penalty surcharge under Article 65-4 of the Act, it shall give a written notice of its payment by specifying the kind of the violation and the amount of the penalty surcharge. <Amended on Oct. 17, 2017>

(3) A person in receipt of a notice under paragraph (2) shall pay the penalty surcharge to the receiving agency determined by the Financial Services Commission within 60 days from the date on which he or she receives the notice. <Amended on Oct. 17, 2017>

(4) Except as provided in this Decree, matters necessary for imposing penalty surcharges shall be determined and publicly notified by the Financial Services Commission. <Amended on Oct. 17, 2017>

[This Article Wholly Amended on Nov. 15, 2010]

[Title Amended on Oct. 17, 2017]

[Moved from Article 26-2; (Previous) Article 26-3 moved to Article 26-4 <Nov. 15, 2010>]

Article 26-4(Extension of payment deadline and installment payment of penalty surcharges) #

(1) Where the Financial Services Commission postpones the deadline for payment of penalty surcharge under Article 65-7 (1) of the Act pursuant to the proviso to Article 29 of the Framework Act on Administration, it may not exceed one year from the day following the payment deadline.

(2) Where the Financial Services Commission allows a penalty surcharge payer to pay in installment a penalty surcharge under Article 65-7 (1) of the Act pursuant to the proviso to Article 29 of the Framework Act on Administration, the interval between each installment payment deadline shall be within 6 months, and the number of installments shall be 3 times.

(3) Except as otherwise provided in paragraphs (1) and (2), the Financial Services Commission shall determine and publicly notify matters necessary for extension of payment deadlines, payments in installment, forms, etc.

[This Article Wholly Amended on Dec. 12, 2023]

Article 26-5(Additional charges) #

"additional charges prescribed by Presidential Decree" in the former part of Article 65-8 (1) of the Act means an amount computed by applying 6/100 per year to the penalty surcharges in default. <Amended on Oct. 17, 2017>

[This Article Wholly Amended on Nov. 15, 2010]

[Moved from Article 26-4; (Previous) Article 26-5 moved to Article 26-6 <Nov. 15, 2010>]

Article 26-6(Demand) #

(1) Demand under Article 65-8 (2) of the Act shall be made in writing within 15 days after the payment deadline expires.

(2) The payment deadline for the penalty surcharges in default where a demand notice is issued under paragraph (1) shall be within ten days from the date on which the demand notice is issued.

[This Article Wholly Amended on Nov. 15, 2010]

[Moved from Article 26-5; (Previous) Article 26-6 moved to Article 26-7 <Nov. 15, 2010>]

Article 26-7(Entrustment of disposition on default) #

(1) Where the Financial Services Commission entrusts the Commissioner of the National Tax Service with the affairs of dispositions on defaults under Article 65-8 (3) of the Act, it shall do so in writing by attaching the following documents:

1. A written resolution of the Financial Services Commission;

2. A written resolution of collection of annual revenues and a notice thereof;

3. A demand notice for payment.

(2) Where the Commissioner of the National Tax Service has been entrusted with the affairs of dispositions on defaults under paragraph (1), he or she shall notify in writing the Financial Services Commission of any of the following matters within 30 days from the date on which the reasons occurred:

1. Where the affairs of dispositions on defaults are finished, the date on which the said affairs are finished and other necessary matters;

2. Where he or she is requested a notice on the progress status from the Financial Services Commission, the said progress status.

[This Article Wholly Amended on Nov. 15, 2010]

[Moved from Article 26-6 <Nov. 15, 2010>]

Article 27(Interest rates on additional amount on refund) #

"Interest rate on the additional amount prescribed by Presidential Decree" in Article 65-10 (2) of the Act means the interest rate determined and publicly notified by the Financial Services Commission, in consideration of interest rates on time deposits with one-year maturity, sold by banks.

[This Article Added on Nov. 15, 2010]

Article 28(Disposition on deficits) #

"Grounds prescribed by Presidential Decree" in subparagraph 6 of Article 65-11 of the Act means cases where rehabilitation claims, etc. become immune from obligation pursuant to the main clause of Article 251 of the Debtor Rehabilitation and Bankruptcy Act.

[This Article Added on Nov. 15, 2010]

Article 29(Processing sensitive information and personally identifiable information) #

(1) If it is essential for performing any of the following administrative affairs, the Financial Services Commission (including persons who are entrusted with the authority of the Financial Services Commission under Article 26-2 (1) and Appendix 3) or the Governor of the Financial Supervisory Service may process information constituting criminal records provided for in subparagraph 2 of Article 18 of the Enforcement Decree of the Personal Information Protection Act and data containing a resident registration number or an alien registration number provided in subparagraph 1 or 4 of Article 19 of the Enforcement Decree of that Act: <Amended on Aug. 6, 2014; Oct. 23, 2015; Jun. 28, 2016; Dec. 31, 2019; Oct. 21, 2021>

1. Authorization of banking business under Article 8 of the Act;

2. Submission of applications, etc. under Article 11 of the Act and Article 3 of this Decree;

3. Preliminary authorization of Article 11-2 of the Act and Article 3-2 of this Decree;

4. Stockholding limit, etc. for the same person under Article 15 of the Act and Articles 4-2 and 8 of this Decree;

5. Deleted; <Feb. 11, 2014>

6. Approval, etc. for stockholding by a private equity fund exclusive for institutions, etc. under Article 15-3 of the Act and Article 10 of this Decree;

7. Matters subject to reporting by a private equity fund exclusive for institutions, etc. under Article 15-4 of the Act;

8. Restrictions, etc. on stockholding by non-financial business entities under Article 16-2 of the Act;

9. Appraisals, inspections, etc. of conversion plans under Article 16-3 of the Act;

10. Examination, etc. of qualifications of stockholders, etc. holding stocks in excess of limit under Article 16-4 of the Act;

11. Special cases for foreign banks, etc. under Article 16-5 of the Act;

12. Deleted; <Jul. 28, 2016>

13. Deleted; <Jul. 28, 2016>

14. Credit ceiling on same borrowers, etc. under Article 35 of the Act;

15. Credit ceiling, etc. on large stockholders of banks under Article 35-2 of the Act and Article 20-7 of this Decree;

16. Acquisition limits, etc. on equity securities issued by large stockholders under Article 35-3 of the Act;

Article 30(Re-examination of regulation) #

The Financial Services Commission shall examine the appropriateness of the following matters every three years counting from each base date specified in the following subparagraphs (referring to the period that ends on the day before January 1 of every third year) and shall take measures, such as making improvements: <Amended on Dec. 30, 2015; Jun. 28, 2016; Mar. 8, 2022; Mar. 12, 2025>

1. Deleted; <Mar. 12, 2025>

2. The scope of persons sharing credit risks under Article 20-4: January 1, 2014;

3. The limits on investment in securities by banks, the scope of real estate for business purposes, etc. under Article 21-2: January 1, 2014.

[This Article Added on Dec. 30, 2013]

Article 31(Criteria for imposition of administrative fines) #

The criteria for the imposition of administrative fines under Article 69 (1) through (5) of the Act are as prescribed in Appendix 4. <Amended on Jun. 28, 2016; Aug. 19, 2020>

[This Article Added on Feb. 11, 2014]