South Korea's financial watchdog on Friday suspended the operation of a local savings bank for six months, citing its capital shortage.

Kyungeun Mutual Savings & Finance will be suspended until Feb. 4, as it failed to meet regulatory capital requirement, the Financial Services Commission said in a statement.

The bank should raise its capital adequacy ratio above 5 percent within 45 days to reopen, it said.   

During the six-month suspension, the FSC will re-examine the bank's financial health to determine whether it can resume business.

Kyungeun is the ninth savings bank to be suspended this year due to capital shortages stemming from bad loans. (Yonhap News)