Controls on foreign banks easedForeign bank branches in Korea will not be required to report their balance sheets before transferring funds to their overseas headquarters from next year, the Financial Supervisory Service (FSS) said.
The measure is to help increase the autonomy of foreign financial institutions working in Korea, FSS Gov. Zhin Woong-seob said at a meeting with the chief executive officers of 21 foreign banks on Tuesday. It was the third time the governor met with the CEOs this year since taking office last year.
“The regulation on remittances will soon be soon abolished,” Zhin said. “The FSS has been making efforts to reduce regulations on foreign financial institutions this year, making a handful of meaningful achievements.”
Currently, foreign bank branches are required to file their settlement reports to the FSS. They can transfer surplus income to their headquarters only when the authority approves. The FSS will revise the regulation in January.
The measure is part of the government’s financial reform initiative aimed at allowing financial institutions to set fees and interest rates through fair market competition, and root out the old practices involving prices of financial products.
The governor asked the foreign bank heads to lead innovation in the financial market by providing better services and products that can be benchmarked by local institutions.
“Foreign banks will be able to make positive achievements if they utilize their advanced credit risk assessment tools and develop differentiated products,” he said. “With the government’s financial reform plan, autonomy of financial institutions has been enhanced, but each institution will need to comply with rules and regulations and secure fiscal soundness on their own.”
BY SONG SU-HYUN [email@example.com]