Korean lawmakers agree to pass voted-down internet banking bill

2020.03.17 13:23:01 | 2020.03.17 13:23:34

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South Korean lawmakers agreed to have another go at passing the revised version of the internet banking law in May to allow capital infusion for K-Bank, whose business has been in limbo for nearly a year due to lack of funds.

The ruling Democratic Party of Korea and the main opposition United Future Party agreed to submit the revised bill again in late April and pass it in the final special parliamentary session following the April 15 general elections, according to legislative sources on Monday.

Earlier this month, ruling party lawmakers unexpectedly voted down the revised bill, which would have eased regulations for ownership of online-only banks. The move came as a surprise as the proposal had reached bipartisan agreement beforehand and gained the okay from the legislation and judiciary committee a day before.

The revised law is aimed to lift the existing ban on non-financial companies from owning a majority stake of more than 34 percent in a bank if they have records of anti-trust violations in the past five years.

The legislative setbacks have stunted the growth of Korea’s first online-only bank. K-Bank’s plans to receive a huge capital injection from the local mobile carrier KT were thwarted as the telecom operator came under scrutiny over alleged price collusion activities. Due to shortage of funds, K-Bank was forced to suspend its loan services since April last year.

Unlike its rival Kakao Bank that successfully swung to profit for the first time since its launch in July 2017, the cash-strapped K-Bank has failed to get off the ground.

The passage of the bill is expected to refuel K-Bank with fresh capital of more than 1 trillion won ($805.5 million).

By Kim Myung-hwan, Lee Hee-soo and Kim Hyo-jin

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