The Financial Supervisory Service (FSS) had a change of heart four days after it gave the nod to SBI
Savings Bank’s plan to open new branches in S. Korea.
Amid criticism over its recent flip-flop, the FSS admitted to having made a mistake in applying relevant rules.
SEOUL KOREA -S. Korea’ financial circles said on January 6 that the nation’s financial watchdog, the Financial Supervisory Service (FSS), backtracked on its decision just four days after it had given the go-ahead for SBI Savings Bank’s plan to open three more branches in Korean cities, including Busan.
Due to the FSS’s about-face, the Japanese holding company of SBI Savings Bank wound up publicly announcing false information that SBI Savings Bank would open three more branches in S. Korea.
On December 11, 2014, the FSS had approved SBI Savings Bank’s plan to open three more branches in Busan, Ulsan and Changwon, respectively. The following day, Japanese financial group SBI Holdings, the holding company of SBI Savings Bank, officially announced the news on its official website, adding that it would open three more branches in S. Korea by March 2015.
To the chagrin of SBI Holdings, the FSS took the highly unusual step of rescinding approval and orally notified SBI Holdings of the sudden change on December 15, 2014. Overturning decisions on sensitive issues, like opening new branches, has been rarely witnessed, thus leaving many frowning on the FSS’s shoddy handing of such a sensitive matter.
The FSS has come clean about its blunder. “When we reviewed SBI Savings Bank’s application for opening new branches, we should have been extra careful in interpreting and applying relevant rules. We orally notified SBI Holdings of the cancellation of the approval on December 15, 2014. And the cancellation of the approval is now underway,” an official from the FSS said. He added that the FSS would send an official document stating that it rescinds the approval sometime next week.
“When financial institutions want to branch out into new cities, they need to meet tricky requirements, such as the payment of additional financial levies imposed on financial institutions. The FSS initially had reached a conclusion that SBI Savings Bank met the requirements. But some FSS officials disagreed. As a result, we had to revoke the approval. I hope people will understand that we blew the whistle on ourselves and tried to fix the probem that would otherwise have been swept under the rug for the sake of administrative convenience,” explained another unnamed official from the FSS.
By Lee Jae-seung
