Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
FSS cooperates with savings banks to improve internal control
The headquarters of the Financial Supervisory Service (FSS) in Yeouido, Seoul / Courtesy of FSS
By Anna J. Park
By Anna J. Park
Regulatory authorities have come up with measures to prevent financial accidents and improve internal controls at savings banks, particularly in the areas of project financing (PF) loans, private business loans and capital management.
The Financial Supervisory Service (FSS) announced the measures on Sunday, explaining that it recently formed a task force with the Korea Federation of Savings Banks as well as local savings banks to analyze past financial accident patterns and inspection results to draw up the measures.
Specifically in terms of prevention of PF loan accidents, the measures enjoin a separation of bank employees, according to each step of such PF loan procedures. For instance, PF loan salespeople can neither take up the task of approving such loans nor of transferring money.
Sunday's announced measures also require a set of additional restrictions when it comes to the process of wiring PF loan money.
The FSS also reinforced qualifications for private business loans, aiming to deter those who abuse loopholes in the loan system. Borrowers of private business loans are now required to submit more concrete documents that could prove the exact usage of the loans from banks.
The measures include ways to strengthen internal controls, aiming to prevent the misappropriation or embezzlement of bank capital by employees.
“The FSS and savings banks will implement the measures, according to the plan, to improve work procedures so that the banks' internal controls are functioning properly,” an official from the FSS said, adding that the financial watchdog agency hopes to foster a solid internal control structure within savings banks.
Savings banks will execute the measures within the first quarter of this year, while tasks that require further computer systemic development will be gradually completed once preparations are done.