Proposed Amendment to Fine-Tune Prudential Regulation of Mutual Savings Banks

Laws and Regulations Announcement AMENDMENT PROPOSED TO FINE-TUNE PRUDENTIAL REGULATION OF MUTUAL SAVINGS BANKS Agency: Financial Services Commission Amended Regulations: Regulation on Supervision of Mutual Savings Bank Business Announcement Date: January 15, 2016 Summary: The Financial Services Commission announced proposals for amendments to the Regulation on Supervision of Mutual Savings Bank Business fine-tuning capital and investment rules and prudential standards on January 15, 2016. Key Provisions:  The additional region-specific capital required for a new branch operation is to be reduced by 50% for soundly performing mutual savings with assets of less than KRW1 trillion.  The minimum capital requirement for large mutual savings banks with assets in excess of KRW1 trillion is to be raised from the current 7% to 8% effective January 1, 2018 (2-year grace period).  Listed mutual savings banks must set aside loan loss provisions, including allowances for uncollected interest from delinquent loans, as provided by the IFRS and the applicable supervisory regulations. Effective Date for the Amendments: Tentatively set for March 31, 2016, following a public comment period and the required regulatory review;