The policymaking Financial Services Commission said Wednesday that Citibank Korea’s plans to gradually phase out its consumer banking operations are not subject to the regulator’s authorization. 

“According to the current banking act, Citibank Korea‘s withdrawal of retail business in phases is not regarded as a ‘shutdown of banking business,’ which falls under the FSC‘s approval,” the authority said in a statement, which indicates the foreign bank can autonomously decide on its business restructuring. 

The FSC’s announcement came after the labor union at Citibank Korea had urged the authority not to allow the lender’s phased liquidation process, on concerns of a massive layoff.

On Monday, the Korean unit of Citigroup said it will shut down its retail banking division in phases, citing constraints in finding potential buyers with intentions to purchase the unit in one piece.

Meanwhile, the FSC ordered the bank to submit a detailed plan regarding the envisioned phasing out of its retail banking operations, which includes measures to protect customers and employees as well as to strengthen the company’s internal control. 

By Choi Jae-hee (cjh@heraldcorp.com)