ESTABLISHMENT, ETC. OF MICROFINANCE FOUNDATION ACT

Article 1(Purpose) #

The purpose of this Act is to establish a Microfinance Foundation to perform the efficient and impartial management and operation of dormant deposits, thereby ensuring the protection of depositors, stabilization of the livelihoods and promotion of the welfare of the less privileged, and the balanced development of economy and society.

Article 2(Definitions) #

The definitions of terms used in this Act shall be as follows: <Amended by Act No. 10303, May. 17, 2010; Act No. 10522, Mar. 31, 2011; Act No. 12838, Oct. 15, 2014>

1. The term "financial institution" means an agency falling under any of the following items:

(a) A bank under the Banking Act;

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

(c) The Industrial Bank of Korea under the Industrial Bank of Korea Act;

(d) An insurance company under the Insurance Business Act;

(e) An agricultural cooperative and the Nonghyup Bank under the Agricultural Cooperatives Act;

(f) A fisheries cooperative and the National Federation of Fisheries Cooperatives under the Fisheries Cooperatives Act;

(g) A savings bank under the Mutual Savings Banks Act;

(h) A community credit cooperative and the Korean Federation of Community Credit Cooperatives under the Community Credit Cooperatives Act;

(i) A credit union and the National Credit Union Federation of Korea under the Credit Unions Act;

(j) A merchant bank prescribed in Article 336 of the Financial Investment Services and Capital Markets Act;

(k) A postal office under the Postal Savings and Insurance Act;

(l) Any other agency dealing with financial business as prescribed by Presidential Decree;

2. The term "deposits, etc." means those falling under any of the following:

(a) Money that financial institutions have raised by bearing obligations from many unspecified persons by means of deposits, installment savings, installments, etc. and any interest accrued thereon;

(b) Refunds, insurance benefits, and dividends for policy holders that financial institutions shall pay in the future according to insurance policies;

3. The term "dormant deposits" means deposits, etc. the extinctive prescription of claims or rights for which has completed under the provisions of applicable Acts or agreements by the relevant parties;

4. The term "original right holder of a dormant deposit" means a person who has lost the claim or right for his/her deposit, etc. because the extinctive prescription of such claim or right has completed;

5. The term "welfare services, etc. for low-income people" means the following services:

(a) A credit loan service to support low-income people in starting business or finding a job;

(b) A credit loan service to support the economic rehabilitation of credit delinquents;

(c) A service to support low-income people in concluding and maintaining insurance policies;

(d) Any other service for stabilizing the livelihoods of the less privileged and promoting their welfare as prescribed by Presidential Decree;

6. The term "welfare service provider" means a person who engages in welfare services, etc. for low-income people, and who meets qualifications prescribed by Presidential Decree.

Article 3(Legal Status) #

The Micro-finance Foundation (hereinafter referred to as the "Foundation") shall be a corporation.

Article 4(Establishment) #

(1) The Foundation shall duly complete its establishment by registration of incorporation at the seat of its principal office.

(2) Matters to be registered for incorporation under paragraph (1) shall be as follows:

1. Purpose;

2. Name;

3. Principal place of business;

4. Matters concerning business;

5. Matters concerning executive officers;

6. Method of public announcement.

Article 5(Office) #

(1) The principal place of business of the Fund shall be prescribed by its articles of incorporation.

(2) The Fund may have branches or sub-branches at such places as necessary under its articles of incorporation.

Article 6(Articles of Incorporation) #

(1) The articles of incorporation of the Fund shall enter the following:

1. Purpose;

2. Name;

3. Matters concerning office;

4. Matters concerning business;

5. Matters concerning the board of directors;

6. Matters concerning executive officers and employees;

7. Matters concerning property and accounting;

8. Matters concerning organization;

9. Matters concerning the exercise of voting rights and limitations on the right of representation of directors;

10. Matters concerning amendment to the articles of incorporation;

11. Matters concerning public announcement and methods thereof;

12. Other matters prescribed by Presidential Decree.

(2) When the Foundation intends to amend its articles of incorporation, it shall in advance obtain authorization from the Financial Services Commission . <Amended by Act No. 8863, Feb. 29, 2008>

Article 7(Business of Foundation) #

In order to accomplish the purpose mentioned in Article 1, the Foundation shall conduct the following business activities:

1. Management and operation of dormant deposits that financial institutions have contributed to the Foundation as prescribed in Article 21;

2. Payment of amounts equivalent to dormant deposits to the original right holders, as prescribed in Article 29;

3. Assistance and supervision of welfare service providers.

Article 8(Application Mutatis Mutandis of Civil Act) #

Except otherwise provided for in this Act, the provisions concerning incorporated foundations of the Civil Act shall apply mutatis mutandis to the Foundation.

Article 9(Prohibition against Use of Similar Names) #

No other foundation than the Foundation under this Act shall use the name of Micro-finance Foundation or any other name similar thereto.

Article 10(Executive Officers) #

(1) The Foundation shall have no more than 15 directors including one president, and one auditor, as its executive officers.

(2) The president shall be appointed by the President on the recommendation of the Chairman of the Financial Services Commission. <Amended by Act No. 8863, Feb. 29, 2008>

(3) Each of the following persons shall serve as director: <Amended by Act No. 8852, Feb. 29, 2008; Act No. 8863, Feb. 29, 2008; Act No. 10339, Jun. 4, 2010>

1. One person designated by the Minister of Strategy and Finance from among the Vice Ministers of Strategy and Finance;

2. The Vice Minster of Health and Welfare;

3. The Vice Minister of Employment and Labor;

4. The Vice Chairman of the Financial Services Commission;

5. The Chairman of the Korea Federation of Banks, which is an incorporated association established with the permission of the Financial Services Commission under Article 32 of the Civil Act;

6. The chairperson of an association comprised of life insurance companies, which have been established under Article 175 of the Insurance Business Act;

7. The chairperson of an association comprised of non-life insurance companies, which has been established under Article 175 of the Insurance Business Act;

8. One person appointed by the Financial Services Commission, two persons appointed by the Financial Services Commission on the recommendation of the Minister of Health and Welfare, and one person appointed by the Financial Services Commission on the recommendation of the Minister of Employment and Labor, from among those with abundant knowledge and experience in economy and society.

(4) The auditor shall be appointed by the Financial Services Commission. <Amended by Act No. 8863, Feb. 29, 2008>

(5) The president, a director under paragraph (3) 8, and an auditor shall hold office for a term of three years but may be reappointed one time. The same shall also apply to a person newly appointed to fill a vacancy.

(6) Executive officers shall serve on a part-time basis without remuneration: Provided, That they may be paid actual expenses incurred in the course of performing duties as prescribed by the articles of incorporation.

Article 11(Duties of Executive Officers) #

(1) The president shall represent the Foundation, exercise power over general matters of the Foundation, and direct and supervise its employees.

(2) When the president fails to perform his/her duties due to any unavoidable reason, directors in the sequence of order prescribed by the articles of incorporation shall perform his/her duties instead.

(3) The auditor shall inspect the affairs and accounts of the Foundation.

Article 12(Disqualifications for Executive Officers or Employees) #

Any person who falls under any of the following subparagraphs shall neither be an executive officer nor employee of the Foundation:

1. A person who is not a national of the Republic of Korea;

2. A person who falls under any of the subparagraphs of Article 33 of the State Public Officials Act.

Article 13(Restrictions on Holding Concurrent Office by Employees) #

Any employee of the Foundation shall neither engage in any for-profit business other than his/her prescribed duties nor concurrently hold another office without permission from the president.

Article 14(Guarantee of Status of Executive Officers) #

Except for the cases falling under any of the following subparagraphs, no executive officer shall be removed from office against his/her will during the term of his/her office:

1. When he/she falls under any of the subparagraphs of Article 12;

2. When he/she violates this Act, any order under this Act, or the articles of incorporation;

3. When it is hard for him/her to perform his/her duties due to a mental or physical disorder.

Article 15(Board of Directors) #

(1) There shall be established a board of directors under the Foundation to deliberate and decide on important matters concerning its duties.

(2) The board of directors shall consist of directors, including the president.

(3) The president shall convene and preside over meetings of the board of directors.

(4) Meetings of the board of director shall pass a resolution with the attendance of a majority of members and the concurrent of a majority of members present.

(5) The auditor may attend a meeting of the board of directors and state his/her opinion.

Article 16(Appointment of Representative) #

The president may appoint a representative having the authority to perform all the judicial or extra-judicial acts related to the affairs of the Foundation, from among its executive officers or employees.

Article 17(Appointment and Dismissal of Employees) #

Each employee of the Foundation shall be appointed or dismissed by the president as prescribed by the articles of incorporation.

Article 18(Prohibition against Divulgence, etc. of Secrets) #

Any person who has served or who currently serves as an executive officer or employee of the Foundation shall neither divulge information which has come to his/her knowledge in the course of performing his/her duties nor use it for purposes other than the business ones.

Article 19(Business Year) #

The business year of the Foundation shall be conformed to the fiscal year of the Government.

Article 20(Submission, etc. of Business Plans, etc.) #

(1) The Foundation shall submit the following documents to the Financial Services Commission and obtain approval therefor subject to resolution by the board of directors, as prescribed by Presidential Decree: <Amended by Act No. 8863, Feb. 29, 2008>

1. A business plan and budgetary bill for each business year;

2. Actual results of business for each business year and a balance sheet for each business year which has been audited by a certified public accountant designated by the Financial Services Commission.

(2) When the Foundation intends to obtain approval for any modification of important matters in a business plan under paragraph (1) 1, it shall submit in advance the business plan stating such intended modifications and reasons therefor as well as budgetary bills to the Financial Services Commission. <Amended by Act No. 8863, Feb. 29, 2008>

(3) The Financial Services Commission shall report on matters under paragraph (1) 2 to the National Assembly. <Amended by Act No. 8863, Feb. 29, 2008>

Article 21(Contribution of Dormant Deposits) #

(1) Financial institutions may contribute their dormant deposits to the Foundation.

(2) Where financial institutions contribute their dormant deposits to the Foundation under paragraph (1), they shall submit to the Foundation the names, addresses, resident registration numbers, and amounts of dormant deposits of the original right holders of such dormant deposits, and any other data prescribed by Presidential Decree.

Article 22(Financial Resources for Operation) #

The Foundation shall be operated with the following financial resources:

1. Dormant deposits contributed by financial institutions under Article 21;

2. Donations by corporations, organizations, and individuals;

3. Other proceeds.

Article 23(Separate Accounting) #

Accounts of dormant deposits under subparagraph 1 of Article 22 shall be separately kept from other accounts of financial resources for operation, which shall in return be separately kept for each item of subparagraph 2 of Article 2.

Article 24(Assistance to Welfare Services) #

The Foundation may assist welfare service providers. Matters necessary for welfare service providers to apply for subsidies shall be prescribed by Presidential Decree.

Article 25(Duties of Welfare Service Providers) #

(1) Each welfare service provider shall neither spend subsidies for other unspecified purposes than providing welfare services, etc. for low-income people, nor receive them by fraudulent application.

(2) When each welfare service provider has completed his/her business or the business year comes to an end, he/she shall formulate and submit to the Foundation a performance report as prescribed by Presidential Decree.

Article 26(Return, etc. of Subsidies) #

(1) Where a welfare service provider has spent subsidies for another use or has received subsidies by fraudulent application in violation of Article 25 (1), the president of the Foundation may revoke all or part of the decision to grant such subsidies.

(2) Where the decision to grant subsidies is revoked, the welfare service provider shall return the subsidies that he/she has received.

(3) Other matters necessary for the supervision, return, etc. of subsidies shall be prescribed by Presidential Decree.

Article 27(Access to Data by Original Right Holders of Dormant Deposits) #

The Foundation shall allow the original right holder of a dormant deposit to access data prescribed in Article 21 (2), as prescribed by Presidential Decree.

Article 28(Notification to Original Right Holders of Dormant Deposits) #

Where a financial institution has decided to contribute its dormant deposits as prescribed in Article 21 (1), it shall notify the original right holders of such dormant deposits which exceed the amount prescribed by Presidential Decree of such contribution by not later than one month before such contribution is made. In such cases, the method of notification and other necessary matters shall be prescribed by Presidential Decree.

Article 29(Requests, etc. for Payment of Dormant Deposits) #

Where there is a request for payment by the original right holder of a dormant deposit by the date five years elapse from the date such dormant deposit is contributed to the Foundation, the Foundation shall pay to the original right holder of such dormant deposit an amount equivalent to the dormant deposit: Provided, That where the Foundation recognizes the necessity of payment, it may pay such dormant deposit even after the above five years have passed.

Article 30(Guidance, Supervision, etc.) #

(1) The Financial Services Commission shall guide and supervise the Foundation. <Amended by Act No. 8863, Feb. 29, 2008>

(2) When the Financial Services Commission recognizes it necessary in guiding and supervising the Foundation, it may consult with the heads of relevant Ministries and departments. <Amended by Act No. 8863, Feb. 29, 2008>

(3) The Financial Services Commission may require the Foundation to report on its business, accounting, property and other necessary matters, or may authorize public officials under the authority of the Financial Services Commission to examine documents, articles, etc. of the Foundation. <Amended by Act No. 8863, Feb. 29, 2008>

(4) Each person who conducts an examination under paragraph (3) shall carry a certificate proving his/her authority and produce it to the parties concerned.

(5) Where the Financial Services Commission recognizes it necessary as a result of reporting or examination under paragraph (3), it may order the Foundation to make corrections or take other necessary measures. <Amended by Act No. 8863, Feb. 29, 2008>

Article 31(Relationship with Other Acts) #

(1) Notwithstanding Article 4 of the Act on Real Name Financial Transactions and Confidentiality and Article 32 of the Use and Protection of Credit Information Act, financial institutions may submit to the Foundation financial transaction information related to dormant deposits under Article 21 (2), and the Foundation may use the financial transaction information so received from financial institutions for business activities under Articles 27 and 29. <Amended by Act No. 9617, Apr. 1, 2009>

(2) Any donation which is granted or received under this Act shall not be governed by the Act on the Collection and Use of Donations.

Article 32(Legal Fiction of Public Official in Application of Penalty Provisions) #

Each executive officer and employee of the Foundation shall be deemed a public official for the purpose of applying penalty provisions under Articles 129 through 132 of the Criminal Act.

Article 33(Penalty Provisions) #

Any person who has divulged a secret which has come to his/her knowledge in the course of performing his/her duties or who has used it for purposes other than the business ones in violation of Article 18 shall be punished by imprisonment with prison labor for not more than two years or by a fine not exceeding ten million won.

Article 34(Administrative Fines) #

(1) Any person who falls under any of the following subparagraphs shall be imposed with an administrative fine not exceeding five million won:

1. Any person who has used a similar name in violation of Article 9;

2. Any welfare service provider who has spent subsidies for other unspecified purposes or who has received subsidies by fraudulent application in violation of Article 25 (1);

3. Any person who has failed to make a report under Article 30 (3) or who has made a fraudulent report, or who has refused, interfered with, or evaded an examination;

4. Any person who has violated an order under Article 30 (5).

(2) The Financial Services Commission shall impose and collect administrative fines under paragraph (1), as prescribed by Presidential Decree. <Amended by Act No. 8863, Feb. 29, 2008>

(3) Any person who is dissatisfied with the disposition of an administrative fine under paragraph (2) may raise an objection to the Financial Services Commission within 30 day from the date he/she is notified of such disposition. <Amended by Act No. 8863, Feb. 29, 2008>

(4) Where any person who is subjected to the disposition of an administrative fine under paragraph (2) raises an objection under paragraph (3), the Financial Services Commission shall notify the competent court of the fact without delay, and the court so notified shall submit the case to trial for the administrative fine under the Non-Contentious Case Litigation Procedure Act. <Amended by Act No. 8863, Feb. 29, 2008>

(5) Where the administrative fine is not paid without raising an objection within the period under paragraph (3), it shall be collected in accordance with the precedents on disposition of national taxes in arrears.