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10 savings banks slapped with disciplinary action

July 12, 2013 - 20:45 By Kim Yon-se
The financial regulator said Friday it has taken disciplinary measures against 10 local savings banks for slack management in lending and network security.

The Financial Supervisory Service slapped 16 employees at 10 savings banks, including executives, with either cautionary warnings or warnings for lax handling in loan business and securing network safety, according to FSS officials.

The names include some of those recently debuted in the market with a new name after they were taken over by major banking groups following the extensive overhaul of more than 20 local savings banks between 2011 and 2012 sparked by their massive bankruptcies.

But their irregular practices were found before the acquisitions, the FSS noted.

The disciplinary actions came as many of them were negligent with collecting interest from customers or preparing for network failure, the FSS said.

Half of them allowed financial transactions to be processed as usual, even though the account holders didn’t repay their debt principles.

Three others were disciplined as they had not followed the regulator’s requirements for network security, such as buying certain insurance policies and setting aside loss reserves, the FSS said.

There were also a few cases in which savings banks did not remove customers’ personal data in the process of upgrading their operating programs, according to the regulator. (Yonhap News)