April 26, 2024

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South Korea’s financial regulator said July 16 it will receive applications in October for a third internet-only bank, as it seeks to reinvigorate the nation’s financial industry.

The Financial Services Commission said applications will start being received Oct. 10 and an initial approval will be granted by early January next year. If things go well, a final approval will be granted by early February next year, it said. 

“Financing ability is one of the important standards by an evaluation committee for an internet-only bank,” the FSC said in a statement.

Internet-only banks also need to inject healthy competition in the local financial market and help improve competitiveness in the financial industry, an FSC official said.

In May, the FSC rejected applications by two consortia to set up the nation’s third internet-only bank, citing a lack of fundraising preparations and technical progress in their business plans.

One consortium is backed by financial technology firm Viva Republica, and the other is led by brokerage Kiwoom Securities.

The two consortia are widely expected to resubmit their applications in October, according to FSC officials.

Two internet-only banks -- K bank and Kakao Bank -- were launched in 2017, challenging traditional banks in Korea and forcing them to cut commission fees, and revamp their online and mobile banking services.

By Ram Garikipati and newswires (ram@heraldcorp.com)