Regulatory Alerts2016-01-15
Added · Updated
Proposed Amendment to Fine-Tune Prudential Regulation of Mutual Savings Banks
The Financial Services Commission proposes amendments to the Regulation on Supervision of Mutual Savings Bank Business that reduce the additional region-specific capital required for new branches by 50% for soundly performing mutual savings banks with assets under KRW1 trillion. For large mutual savings banks with assets exceeding KRW1 trillion, the minimum capital requirement is raised from 7% to 8% effective January 1, 2018, subject to a two-year grace period. Additionally, listed mutual savings banks must set aside loan loss provisions, including allowances for uncollected interest from delinquent loans, in accordance with IFRS and applicable supervisory regulations. These proposed changes are tentatively scheduled to take effect on March 31, 2016, following a public comment period and regulatory review.