Banks Violate Security Guidelines
By Na Jeong-ju
Staff Reporter
Some banks have failed to follow security guidelines on online banking set up early this year, putting millions of clients at risks of fraud, an opposition lawmaker said, Friday.
The bigger problem was that the Financial Supervisory Service (FSS) has never inspected whether its rules are being abided by properly, and wasn't aware of the violation until very recently, according to Cha Myeong-jin, a Grand National Party lawmaker.
``The FSS initiated tougher rules in January to protect online banking users from unauthorized attempts to withdraw money from their accounts. But the reality is somewhat different,'' Cha said. ``The truth is that banks neglected to follow the rules, and the FSS paid little attention to their violation.''
There have been no reported cases of fraud resulting from the neglect of duty. However, this case reveals financial firms and regulators don't care much about the security of online transactions, Cha said.
Under the regulations, customers are banned from withdrawing more than one million won at a time and 10 million won per day from ATMs. Customers are also restricted from remitting more than 10 million won at a time and 50 million won per day using their cash cards.
However, Hana Bank, Korea Exchange Bank (KEB) and Shinhan Bank failed to keep the regulations, allowing customers to withdraw or remit more money than permitted by the FSS, the lawmaker claimed.
When it comes to Telebanking, individuals and corporations can't transfer more than 50 million won at a time and more than 500 million won in one day. But Hana and KEB violated the regulation by raising the ceiling of transferable money.
The FSS admitted that it wasn't aware of the violation.
``Upon receiving a report on it, we've ordered banks to correct their practices to comply with the current rules,'' an FSS official said.
The official said it is difficult for the FSS to take disciplinary measures against banks because no financial damage has been caused by the violation.