South Korea regulators on Tuesday said they will receive preliminary applications from consortiums wanting to launch South Korea's first Internet-only bank.

According to the Financial Services Commission and Financial Supervisory Service, prospective operators will be allowed to submit applications Wednesday through Thursday.

The preliminary approval process will eventually lead to the creation of the first new entity in the country's banking industry in 23 years.

Government regulators said Kakao Bank, Interpark Bank Grand, KT and 500V consortia are expected to apply.

An Internet bank is a bank that offers services remotely via online and telephone banking without physical buildings. Such banks emerged in the 1990s with advances made in online banking sector technology.

Under the FSC plan, Internet-only bank operations will range from deposits, lending and credit cards to foreign exchange transactions, and their financial soundness would be regulated the same way as that of other commercial lenders.

The government encouraged local IT firms to invest in the untapped Internet-only banking industry and even lowered entry barriers, including stake ownership limits.

"The consortiums are made up of financial firms, information and communication technology companies as well as retail, and e-commerce businesses," the FSC said.

Kakao Bank is led by the country's largest mobile messenger firm Daum Kakao Corp. and lender KB Kookmin Bank, while KT Corp., South Korea's No. 2 mobile carrier along with Woori Bank are leading the KT Consortium.

Interpark Grand Bank is an alliance of Interpark, a shopping mall and auction firm, SK Telecom and Industrial Bank of Korea, while 500V is comprised of many small and medium enterprises.

"To ensure a fair selection process, authorities plan to not accept additional information after the Thursday deadline, although some supporting documents can be requested," a regulatory insider said.

He said all documents submitted will be scrutinized in detail with an independent assessment committee to be formed to double check all related qualifications, before a final decision is made.

Regulators have said upwards to two consortia will get preliminary approval from the state. (Yonhap)