Savings Banks Soon to Offer A Variety of New Services

Beginning in September, it will be possible to pay bills through mutual savings banks, community credit cooperatives and credit unions and to send money to other financial organizations from these thrift institutions.

Thrifts will be also allowed to sell government bonds, to invite prospective members for card companies and to sell commemorative coins on commission.

The government and the ruling Millennium Democratic Party agreed Thursday to allow thrift institutions to provide such financial services, which have been provided mainly by commercial banks, in order to boost thrifts.

The Bank of Korea said it would help mutual savings, community credit cooperatives and credit unions to gain membership in the Korea Financial Telecommunications and the Clearings Institute. If a thrift institution becomes a member of the electronic financial network operator, the institution will become free from restrictions to provide money transmission services. The government also plans for other measures to boost thrift institutions. "We plan to provide about 250 billion won ($192 million) of restructuring funds to companies mainly through mutual savings banks," a government official said.

The government and the ruling party plan to help thrift institutions to develop financial services such as using car loans as collateral to replace private loans.

by Huh Gui-shik