Financiers attempt to ease public ireWith public bitterness increasing, the financial industry, in a move to avoid criticism, announced that it is stepping up its social responsibilities.
However, since most of the measures that were laid out yesterday overlapped with previous commitments such as cutting back ATM commission fees and lowering credit card commission rates on small businesses, it is questionable if the move will appease public anger.
The financial industry recently has taken a heavy beating from the public and the government over its high dividend returns and employee payouts on the back of high commission rates and service charges, including interest rates.
The public backlash was further fueled by the Occupy Wall Street movement.
The five financial advocates - the Korea Federation of Banks, Korea Financial Investment Association, Korea Life Insurance Association, General Insurance Association of Korea and Credit Finance Association - yesterday released stronger social responsibility measures that include cutbacks on commission rates from bank services and stock exchanges as well as penalties on late payments.
Additionally, the measures include an exemption on ATM fees for socially underprivileged groups such as people with disabilities and living under government support.
Newly included measures targeted the microcredit loans on low-income and low-credit rating borrowers to 1.2 trillion won ($1.08 billion) by the end of this year with plans to expand it to 1.5 trillion won next year.
Additionally, the financial industry will spend at least 1.3 trillion won on next year’s social contribution activities such as creating funds that will help young entrepreneurs financing child care facilities and projects that will improve the conditions of farm and fishing villages as well as industrial areas. The social contribution spending is an expansion of more than 50 percent from this year’s 900 billion won. The banks will put up 1 trillion won.
The financial industry also said it has agreed to practice a more conservative dividend payout while enhancing management transparency. However, the financial companies will each independently decide on how much they will cut back on their services charges including credit card commission rates as well as the timing to avoid possible government accusations of price-fixing.
By Lee Ho-jeong [firstname.lastname@example.org]
More in Finance
Color of Chuseok
Kospi tumbles to 7-week low as economic prospects dim
BC Card opens big data lab in Busan
Bank of Korea expands support for small businesses
Kakao Bank to start preparing to go public