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South Korea eases regulations on foreign banks

South Korea eases regulations on foreign banks

(27 July 2004 – Asia) International banks could soon be chasing a slice of South Korea’s retail banking and asset management pie after the Financial Supervisory Service (FSS) relaxed its banking regulations, allowing foreign banks to establish "units" in South Korea. International banks are now allowed to set up banks in the country provided they sink more than 100 billion won (US$86.03 million) in capital into the venture.

This will enable them to grow their operations on capital raised in South Korea. Laws related to opening branches have also been revised.

Previously, banks were only able to open branches in the country.

"To apply for setting up a unit, a foreign financial company must be well supervised in its home country and be in a healthy financial condition," the FSS said.

In further news, the FSS is investigating Bank of Kookmin’s accounting procedures related to taxation, as part of the regulator’s extension of its yearly check up of this aspect of local banks’ accounting.

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