Political wrangling in Korea over the proposed revision of
the country’s Banking Act has raised the
possibility of a veto of the bill, with growing fears of a
potential plunge in investment into internet-only banks.
The Financial Services Commission (FSC) granted preliminary
licences to run internet-only banks last November to two
consortia led by the country’s internet giant
Kakao and telecom operator KT respectively. This came five
months after the regulator announced plans to establish
internet-only banks, and that it would submit a bill to the
National Assembly to have the Banking Act revised to allow
non-financial companies to own up to a 50% stake in these
Warnings have been issued, however, regarding the negative
impact of a potential veto of the revision bill - from the
country’s opposition party, which has heavily
opposed the legislation -...