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Selected Statutes of the Republic of Korea |
Act No. 2333, Aug. 2, 1972
Amended by Act No. 2779, Jul. 25, 1975
Act No. 4867, Jan. 5, 1995
Act No. 5050, Dec. 29, 1995
Act No. 5501, Jan. 13, 1998
Act No. 5507, Jan. 13, 1998
Act No. 5738, Feb. 1, 1999
Act No. 5982, May 24, 1999
Act No. 6203, Jan. 28, 2000
Act No. 6429, Mar. 28, 2001
Act No. 6561, Dec. 31, 2001
Act No. 6992, Dec. 11, 2003
Act No. 7428, Mar. 31, 2005
Act No. 8143, Dec. 30, 2006
Act No. 8522, Jul. 19, 2007
Act No. 8635, Aug. 3, 2007
Act No. 8852, Feb. 29, 2008
Act No. 8863, Feb. 29, 2008
Act No. 10175, Mar. 22, 2010
CHAPTER Ⅰ GENERAL PROVISIONS
Article 1 (Purpose)
The purpose of this Act is to contribute to the growth of the national
economy by guiding savings banks for sound operation to assist them in
providing citizens and small and medium enterprises with greater convenience in receiving financial services,
protecting customers, and
maintaining credit system in good order.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 2 (Definitions)
The terms used in this Act shall be defined as follows:
1. The term “small and medium enterprise” means small and medium enterprises as defined in Article 2 (1) of the Framework
Act on Small
and Medium Enterprises;
2. The term “credit mutual aid deposit service” means a service for receipt
1
and payment of mutual aid deposits provided under an agreement made with mutual aid members on condition that each member deposit
mutual
aid deposits in installments for a fixed number of units in an account
for a fixed term on a regular basis until the amount of savings reaches a specific amount and the service provider shall, in turn,
pay the money
so deposited to the mutual aid members from each account by drawing
lots, making a bid, or any other method;
3. The term “credit installment savings service” means a service of receipt and payment of installment savings provided under
an agreement with
an installment savings depositor under an agreement that the depositor shall deposit installment savings for a fixed term
and the service
provider shall pay a certain amount of money to the depositor earlier,
than or at the expiration of the term;
4. The term “equity capital” means the aggregate of core capital and supplementary capital according to the standards
set by the Bank
for International Settlements, which is determined by the Financial
Services Commission, as specified by Presidential Decree;
5. The term “deposits or similar” means mutual aid deposits, installment
savings, deposits, installment deposits, and others specified by
Presidential Decree;
6. The term “credit extension” means payments, loans, guarantees for
payment, purchasing of securities in the nature of financial support, and other direct and indirect transactions of
a mutual savings bank
that are accompanied by credit risks in financial transactions, as
specified further by Presidential Decree. In such cases, any credit extension made on a principal's account shall
be deemed to be the
credit extension made to the principal, regardless of in whose name
it is made;
7. The term “large credit extension” means credit extension made to an individual borrower in excess of 10/100 of the equity
capital of a mutual
savings bank;
8. The term “illegal or non-performing credit extension” means a case in which the amount of credit extended or
the amount provisionally
paid falls under any of the following items:
(a) An amount exceeding the limit under Article 12 (1) out of the amount of credit extension made to an individual borrower
(hereinafter
2
referred to as “credit extension exceeding the limit for each individual borrower”);
(b) An amount exceeding the limit under Article 12 (3) out of the amount
of credit extension made to an individual borrower and a person sharing credit risks as prescribed by Presidential Decree
with the
individual borrower (hereinafter referred to as “identical borrower”)
(hereinafter referred to as “credit extension exceeding the limit for the identical borrower”);
(c) An amount exceeding the limit under Article 12 (2) out of the
aggregate of a large credit extension (hereinafter referred to as
“illegal large credit extension”);
(d) Credit extension made and provisional payment made in violation
of Article 37 (hereinafter referred to as “credit extension to a large shareholder”);
(e) Credit extension and provisional payment that is anticipated as
difficult to collect or that is presumed to be a loss in light of the standards set by the Financial Services Commission
(hereinafter
referred to as “non-performing credit extension”);
9. The term “business guidance” means guidance on the following matters relating to business management of mutual savings banks:
(a) Collecting illegal and non-performing credit extensions and securing
claims;
(b) Business affairs relating to supply of and demand for funding and lending loans and receiving deposits;
(c) Other matters concerning business management of mutual savings banks, as specified by Presidential Decree;
10. The term “business administration” means that an administrator under
Article 24-3 (1) (hereinafter referred to as “administrator”), to whom the management of an insolvent mutual savings
bank is entrusted
for the business stabilization of the mutual savings bank, carries out
the business affairs or manages and disposes of its property;
11. The term “large shareholder” means a shareholder falling under any of the following items:
(a) The largest shareholder: A principal who holds the greatest number of the total outstanding voting shares in a mutual
savings bank
held by the principal and persons who have a special relationship,
3
as prescribed by Presidential Decree, with the principal (hereinafter referred to as “specially related persons”) on the
principal's account,
regardless of in whose name the shares are held;
(b) Significant shareholder: A shareholder who holds 10/100 of outstanding voting shares of a mutual savings
bank or more on
his/her account, no matter in whose name the shares are held,
or a shareholder who has de facto control over important matters
relating to the management of a mutual savings bank, such as appointment and removal of executives.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 3 (Form of Mutual Savings Banks)
Each mutual savings bank shall be a stock company.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 4 (Business Area of Mutual Savings Banks)
(1) The business area of a mutual savings bank shall be any of the following
areas based on the location of its principal business office (hereinafter referred to as “principal office”):
1. Seoul Special Metropolitan City;
2. The area covering Incheon Metropolitan City and Gyeonggi-do;
3. The area covering Busan Metropolitan City, Ulsan Metropolitan City, and Gyeongsangnam-do;
4. The area covering Daegu Metropolitan City, Gyeongsangbuk-do, and
Gangwon-do;
5. The area covering Gwangju Metropolitan City, Jeollanam-do,
Jeollabuk-do, and Jeju Special Self-Governing Province;
6. The area covering Daejeon Metropolitan City, Chungcheongnam-do, and Chungcheongbuk-do.
(2) Notwithstanding paragraph (1), a mutual savings bank which merges with another mutual savings bank or receives contract
transfer may include
the business area of the mutual savings bank which ceases to exist due
to the merger or which makes the contract transfer in its own business area.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 5 (Capital of Mutual Savings Banks)
(1) The capital of each mutual savings bank shall exceed the amounts
classified as follows:
4
1. Where its principal office is located in the Special Metropolitan City: Twelve billion won;
2. Where its principal office is located in a Metropolitan City: Eight billion
won;
3. Where its principal office is located in a Do or Special Self-Governing
Province: Four billion won.
(2) A mutual savings bank that intends to relocate its principal office or a branch office or similar under Article
7 (1) from one of the following
areas to another within the same business area shall meet the requirements
provided by Presidential Decree in view of the capital amount which will be applicable in the area whereto it moves and its
equity capital, etc.:
1. The Special Metropolitan City;
2. A Metropolitan City;
3. A Do or Special Self-Governing Province.
(3) The capital under paragraphs (1) and (2) means paid-in capital.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 6 (Business License)
(1) Any person who intends to carry out business activities as provided
under Article 11 (1) systematically and continuously for profit shall obtain a license from the Financial Services Commission,
except as otherwise
provided for in other Acts.
(2) Any person who desires to obtain a license under paragraph (1) (hereinafter referred to as “main license”)
shall file an application with
the Financial Services Commission as prescribed by Presidential Decree.
(3) Any person who desires to obtain a main license under paragraph
(2) may file an application for a preliminary license with the Financial
Services Commission. In such cases, the Financial Services Commission
shall review the application and inform the applicant of whether to grant a preliminary license within two months therefrom:
Provided, That the
Financial Services Commission may extend such period as prescribed by the Financial Services Commission.
(4) In granting a main license or preliminary license, the Financial Services
Commission may attach conditions necessary for the sound management
of a mutual savings bank and protection of customers.
(5) The Financial Services Commission shall, when a person who has obtained a preliminary license files an application
for a main license, grant
5
him/her the main license after confirming his/her implementation of the conditions set to his/her preliminary license.
(6) Necessary matters concerning further details of the procedures for
granting a main license or preliminary license, etc. shall be prescribed by the Financial Services Commission.
(7) Any person who has obtained a main license or preliminary license
for a mutual savings bank with conditions attached thereto as provided under paragraph (4) may file an application for
the cancellation or change
of the conditions under paragraph (4) with the Financial Services
Commission, when there are changes in situation or legitimate grounds. In such cases, the Financial Services Commission shall
decide on whether
to cancel or change the conditions within two months therefrom and notify
the applicant of the result in writing without delay.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 6-2 (Requirements for Licensing)
(1) Any person who qualifies for obtaining a license under Article 6 (1)
shall meet the following requirements:
1. The person shall meet the requirements of Article 5 (1);
2. The person shall have professional human resources and physical facilities, including an electronic computer
system, sufficient for
protecting customers and carrying out the business in which he/she
intends to engage;
3. His/her business plan shall be feasible and appropriate;
4. Large shareholders (including shareholders who are specially related
persons of the largest shareholder; and if the largest shareholder is a corporation, including those shareholders who have
de facto control
over important matters relating to the management of the corporation and who are prescribed by Presidential Decree).
(2) Necessary matters concerning further details of the requirements under paragraph (1) shall be prescribed by Presidential Decree.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 6-3 (Public Notice of License, etc.)
The Financial Services Commission shall, whenever it grants a license
pursuant to Article 6 (1) or revokes a license pursuant to Article 24 (2), shall issue public notice of the details forthwith
through the Official Gazette
and shall also notify the general public thereof by means of its Internet
6
homepage, etc.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 7 (Restriction on Establishment of Branches, etc.)
(1) A mutual savings bank may not establish any branch office or liaison
office (which includes a branch office or administration office that performs part of its business affairs, or any other similar
place; hereinafter referred
to as “branch office or similar”), other than its principal office: Provided,
That the foregoing shall not apply in cases where a branch office or similar is established by the relevant mutual savings
bank within the business
area under Article 4 after obtaining a license from the Financial Services
Commission as prescribed by Presidential Decree.
(2) Notwithstanding the proviso to paragraph (1), a mutual savings bank
prescribed by Presidential Decree may establish a branch office or similar outside the business area under Article 4 when
it obtains a license as
provided by Presidential Decree.
(3) A mutual savings bank seeking to establish a branch office or similar under the proviso to paragraph (1) or paragraph
(2) shall, for each of
such branch office or similar, increase the capital by an amount exceeding
the amount as prescribed by Presidential Decree. In such cases, the capital means paid-in capital.
(4) The Financial Services Commission may attach conditions to a license
granted pursuant to the proviso to paragraph (1) and paragraph (2).
[This Article Newly Inserted by Act No. 10175, Mar. 22, 2010]
Article 8 Deleted. <by Act No. No. 5738, Feb. 1, 1999>
Article 9 (Use, etc. of Designation)
(1) Each mutual savings bank shall include the words “mutual savings
bank” or “savings bank” in its name.
(2) No person other than mutual savings banks under this Act may use such a title as “mutual savings bank,” “savings
bank,” “mutual savings
company,” “mutual loan company,” “people's bank,” or any other similar
title.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 10 (Acts Subject to Authorization)
(1) Each mutual savings bank shall, when it intends to perform any of
the following acts, obtain authorization from the Financial Services
Commission:
7
1. Dissolution or a merger;
2. Discontinuance, transfer, or acquisition of a business (or a substantial part of a business);
3. Decrease of capital.
(2) The Financial Services Commission may attach conditions to the authorization granted pursuant to paragraph (1).
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 10-2 (Matters Subject to Mandatory Reporting, etc.)
(1) Each mutual savings bank shall, whenever it falls under any of the
following subparagraphs, file a report with the Financial Services
Commission in advance:
1. When it amends its articles of incorporation (excluding where it amends
any insignificant matter as specified by Presidential Decree);
2. When it changes a category or method of its business (excluding where it changes any insignificant matter as specified by Presidential
Decree);
3. When it transfers or acquires part of a business;
4. When it relocates a branch office or similar within the same business area, and such relocation falls under any of the
following items;
(a) When the relocation is made from an area under any subparagraph of Article 5 (2) to another area under any subparagraph
of the
same paragraph;
(b) When the relocation is made from a Metropolitan City to another
Metropolitan City;
(c) When the relocation is made from a Special Self-Governing Province
to a Do, or from a Do to a Special Self-Governing Province;
(d) When the relocation is made from a Do to another Do.
5. When it is necessary, otherwise for protection of customers, as prescribed
by Presidential Decree.
(2) The Financial Services Commission may recommend a mutual savings bank to correct or supplement the contents of a report filed
by it in accordance
with paragraph (1), if it finds that the contents violate relevant Acts and subordinate statutes or infringe on any
right or interest of customers
of the mutual savings bank.
(3) A mutual savings bank that falls under any of the following subparagarphs shall file a report with the
Financial Services Commission,
as prescribed by the Financial Services Commission:
8
1. When there is a change in any of the shareholders specified by
Presidential Decree;
2. When there is a change in its largest shareholder;
3. When shares held by its largest shareholder or his/her specially related persons are changed by 1/100 of the total outstanding
voting shares
or more;
4. When it relocates its principal office or relocates or closes down its branch office or similar (excluding where
a report shall be filed in
advance in accordance with subparagraph 4 of paragraph (1);
5. When it suspends or resumes the business of its principal office or a branch office or similar;
6. When it appoints or removes an executive (including a person prescribed
by Article 401-2 (1) 3 of the Commercial Act and further prescribed by Presidential Decree: the same shall apply hereafter in this Article
and Article 35-2);
7. When there is any other cause or event that has a significant impact on the management of the mutual savings bank, as
further specified
by Presidential Decree.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 10-3 (Appointment of Outside Directors)
(1) Each mutual savings bank (which shall be limited to mutual savings
banks that meet the criteria set by Presidential Decree, considering the amount of assets and other factors; the
same shall apply hereafter in
this Article) shall have outside directors (which mean directors not engaged
in ordinary business activities of the mutual savings bank and who are not persons falling under any subparagraph of
paragraph (4); the same
shall apply hereinafter), the minimum number of whom shall be prescribed
by Presidential Decree, considering the amount of assets of the mutual savings bank. In such cases, the number of outside
directors shall be at
least one-half of the total number of directors.
(2) Each mutual savings bank shall have a committee under Article 393-2 of the Commercial Act for recommendation of candidates for outside
directors (hereinafter referred to as “committee for recommendation of
candidates for outside directors”). In such cases, at least one-half of all members of the committee for recommendation
of candidates for outside
directors shall be outside directors.
9
(3) Outside directors shall be elected by the general meeting of shareholders from among the candidates recommended by
the committee for
recommendation of candidates for outside directors.
(4) None of the following persons may be qualified as an outside director of a mutual savings bank, and any person who falls
under any of the
following subparagraphs after he/she is appointed as an outside director
shall relinquish of the position:
1. A minor or a person declared incompetent or quasi-incompetent;
2. A person declared bankrupt, but not yet reinstated;
3. A person in whose case two years have not passed since a sentence of imprisonment without prison labor or any heavier punishment
upon
him/her was completely carried out or discharged;
4. A person in whose case two years have not passed since he/she was removed or dismissed pursuant to this Act;
5. The largest shareholder;
6. A specially related person of the largest shareholder;
7. A significant shareholder or his/her spouse or one of his/her lineal ascendants or descendants;
8. Any person who currently works or has worked, during the latest two years, for the mutual savings bank or its affiliate
(which means an
affiliate as defined in the Monopoly Regulation and Fair Trade Act;
the same shall apply hereinafter) as a full-time executive or employee;
9. The spouse or a lineal ascendant or descendant of a full-time executive of the mutual savings bank;
10. Any person who currently works or has worked, during the latest two years, as a full-time executive or employee
for a corporation that
has a significant business relationship as prescribed by Presidential
Decree with the mutual savings bank or that competes against the mutual savings bank in business or has a cooperative
relationship
with the mutual savings bank;
11. A full-time executive or employee of a company for which a full-time executive or employee of the mutual savings
bank works as a
non-standing director;
12. Any other person who has difficulty in performing his/her duty as an outside director or who is anticipated to
have influence over the
management of the mutual savings bank, as specified by Presidential
10
Decree.
(5) In cases where the composition of the board of directors does not conform to the requirements under paragraph (1) due to
the resignation or death
of an outside director or any other reason, the mutual savings bank shall take measures to compose the board of directors
in conformity to the
requirements under paragraph (1) at the general meeting of shareholders
held first after the day on which such cause or event occurs.
(6) The provision of the last clause of paragraph (2) shall not apply in cases where a mutual savings bank that shall have
outside directors because
it falls under the criterion under paragraph (1) for the first time appoints outside directors.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 10-4 (Audit Committee)
(1) Each mutual savings bank (which shall be limited to the mutual savings
banks that meet the criteria set by Presidential Decree, considering the
amount of assets and other factors; the same shall apply hereafter in this Article) shall have an audit committee
(which means such audit
committee as defined in Article 415-2 of the Commercial Act; the same
shall apply hereafter in this Article).
(2) The audit committee shall meet the following requirements:
1. At least two-thirds of incumbent members shall be outside directors;
2. At least one of the members shall be a specialist in accounting or finance as specified by Presidential Decree.
(3) Any person who falls under any subparagraph of Article 10-3 (4) 1
through 4 and 7 through 9 may not be qualified as a member of the audit committee as a non-outside-director member, and a person
who falls under
any of the said subparagraphs after he/she becomes a member of the audit
committee as a non-outside director member shall relinquish such position:
Provided, That a person who currently serves as a member but who is
a full-time auditor or non-outside director member may be qualified as
a non-outside director member of the audit committee, even when he/she falls under Article 10-3 (4) 8.
(4) In cases where the composition of the audit committee does not conform
to the requirements under paragraph (2) due to the resignation or death of a member of the audit committee or any other reason,
the mutual savings
bank shall take measures to compose the audit committee in conformity
11
with the requirements under paragraph (2) at the general meeting of shareholders held first after the day on which such
cause or event occurs.
(5) The proviso to Article 415-2 (2) of the Commercial Act shall not apply
to the composition of the audit committee under paragraph (1).
(6) Article 409 (2) and (3) of the Commercial Act shall apply mutatis
mutandis to the appointment of outside directors who shall serve as
members of the audit committee.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 10-5 (Exercise of Minority Shareholders' Rights)
(1) Any person who has held at least 5/100,000 of the total number of
outstanding shares of a mutual savings bank (which shall be limited to mutual savings banks that meet the criteria
prescribed by Presidential
Decree, considering the amount of assets and other factors; the same shall apply hereafter in this Article) continuously
for six months or longer,
as prescribed by Presidential Decree, may exercise the minority
shareholders' rights under Article 403 of the Commercial Act (including cases as applicable mutatis mutandis in Article 324, 415, 424-2, 467-2,
or 542 of the Commercial Act).
(2) Any person who has held at least 250/1,000,000 of the total number of outstanding shares of a mutual savings bank (or at
least 125/1,000,000
if the mutual savings bank involved is one that falls under the criteria
prescribed by Presidential Decree) continuously for six months or longer, as prescribed by Presidential Decree, may exercise
the shareholders' rights
under Article 402 of the Commercial Act.
(3) Any person who has held at least 50/100,000 of the total number of outstanding shares of a mutual savings bank
(or at least 25/100,000
if the mutual savings bank involved is one that falls under the criteria
prescribed by Presidential Decree) continuously for six months or longer, as prescribed by Presidential Decree, may exercise
the shareholders' rights
under Articles 466 of the Commercial Act.
(4) Any person who has held at least 250/100,000 of the total number of outstanding shares of a mutual savings bank
(or at least 125/100,000
if the mutual savings bank involved is one that falls under the criteria
prescribed by Presidential Decree) continuously for six months or longer, as prescribed by Presidential Decree, may exercise
the shareholders' rights
under Articles 385 (including cases as applicable mutatis mutandis in
12
Article 415 of the Commercial Act) and 539 of the Commercial Act.
(5) Any person who has held at least 50/10,000 of the total number of outstanding shares of a mutual savings bank
(or at least 25/10,000 if
the mutual savings bank involved is one that falls under the criteria prescribed by Presidential Decree) continuously
for six months or longer,
as prescribed by Presidential Decree, may exercise the shareholders' rights
under Article 363-2 of the Commercial Act. In such cases, the shareholders' rights under 363-2 of the Commercial Act shall be exercised on the basis
of voting shares.
(6) Any person who has held at least 150/10,000 of the total number of outstanding shares of a mutual savings bank
(or at least 75/10,000
if the mutual savings bank involved is one that falls under the criteria
prescribed by Presidential Decree) continuously for six months or longer, as prescribed by Presidential Decree, may exercise
the shareholders' rights
under Articles 366 and 467 of the Commercial Act. In such cases, the
shareholders' rights under Article 366 of the Commercial Act shall be exercised on the basis of voting shares.
(7) A shareholder under paragraph (1) may, if he/she wins a lawsuit
filed by him/her in accordance with Article 403 of the Commercial Act
(including cases as applicable mutatis mutandis in Article 324, 415, 424-2,
467-2, or 542 of the Commercial Act), make a claim of the litigation costs
and all other expenses incurred by him/her in the lawsuit from the mutual savings bank.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 10-6 (Examination of Qualifications, etc. of Large Shareholders)
(1) A person who desires to hold more than 30/100 of the total outstanding
voting shares in a mutual savings bank by acquiring or taking over voting
shares of the mutual savings bank (which means de facto control over
the relevant shares: hereafter referred to as “acquisition, etc.” in this
Article) or to become a large shareholder of such bank as prescribed by
Presidential Decree, shall meet the requirements set by Presidential Decree for the prevention of financial accidents
(hereafter referred to as
“requirements for the prevention of financial accidents” in this Article),
among the qualification requirement for a large shareholder under Article
6-2 (1) 4 and the detailed requirements for obtaining a license under paragraph (2) of the same Article, and shall
obtain approval from the
13
Financial Services Commission in advance.
(2) In cases where the acquisition, etc. of shares under paragraph (1)
is caused by any ground prescribed by Presidential Decree, such as the
death of any incumbent large shareholder, the acquiring person shall file an application for approval with the Financial
Services Commission within
a period set by Presidential Decree not exceeding three months from the
acquisition, etc.
(3) The Financial Services Commission shall examine, at regular intervals set by Presidential Decree, whether shareholders
as prescribed by
Presidential Decree meet the requirements set by Presidential Decree
(hereafter referred to as “requirements for maintaining eligibility for a large shareholder” in this Article),
among the qualification requirement
for a large shareholder under Article 6-2 (1) 4 and the requirements for the prevention of financial accidents. In such cases,
the Financial Services
Commission may, if necessary for an examination, require a mutual savings
bank or its large shareholders to provide necessary materials or information. (4) With regard to shares for which approval
under paragraph (1) has
not been granted or an application for approval under paragraph (2) has
not been filed, the Financial Services Commission may issue an order to dispose of them within a prescribed period not
exceeding six months.
(5) No person who has made an acquisition, etc. of shares without approval
under paragraph (1) shall exercise his/her voting right in respect of the shares so acquired (including shares for
which approval has not been
granted by a person who made an acquisition, etc. of shares pursuant
to paragraph (2)).
(6) With regard to large shareholders acknowledged as not fulfilling the requirements for maintaining eligibility for a
large shareholder as a result
of the examination conducted under paragraph (3), the Financial Services
Commission may issue an order to meet such requirements within a prescribed period not exceeding six months.
(7) No large shareholder who has received an order under paragraph (6)
shall exercise his/her voting right in respect of the shares held by him/her in excess of 10/100 of the total outstanding
voting shares in the mutual
savings bank.
(8) In cases where a large shareholder who has received an order under paragraph (6) fails to comply with such order,
the Financial Services
14
Commission may order the large shareholder to dispose of the shares held by him/her in excess of 10/100 of the total outstanding
voting shares
in the mutual savings bank within a prescribed period not exceeding six
months.
(9) Other matters necessary for an approval, application for an approval, request for the provision of materials or
information, and an order as
provided under paragraphs (1) through (8) shall be prescribed by
Presidential Decree.
[This Article Newly Inserted by Act No. 10175, Mar. 22, 2010]
CHAPTER Ⅱ BUSINESS
Article 11 (Business Activities)
(1) Any mutual savings bank may engage in the following business activities
systematically and continuously for profit:
1. Credit mutual aid deposit service;
2. Credit installment savings service;
3. Receipt of deposits and installment deposits;
4. Extension of loans;
5. Discount of commercial notes;
6. Domestic and foreign exchange of money;
7. Receipt of deposits for safekeeping;
8. Agency for collection and payment;
9. Intermediary or agency for corporate mergers and purchases;
10. Agency for the State, public organizations, and financial institutions;
11. Business affairs vicariously carried out for or entrusted by the Korea
Federation of Savings Banks under Article 25;
12. Issuance and management of electronic means for debit payment under the Electronic Banking Act and settlement of payments
therefor (In
such cases, the scope of business shall be limited to cases in which
the business affairs of the Korea Federation of Savings Banks under
Article 25-2 (1) 9 are jointly carried out);
13. Issuance, management, and sales of prepaid electronic means payment
under the Electronic Banking Act and settlement of payments therefor
(In such cases, the scope of business shall be limited to cases in which the business affairs of the Korea Federation of Savings
Banks under
15
Article 25-2 (1) 10 are jointly carried out);
14. Investment brokerage business, investment trade business, and trust business authorized by the Financial Services
Commission under the
Financial Investment Services and Capital Markets Act;
15. Business activities incidental to those under subparagraphs 1 through
14 or those required for achieving the purposes under Article 1, which
are authorized by the Financial Services Commission.
(2) The minimum maintenance ratio of the aggregate of credit extensions to private individuals and small and medium enterprises
within a business
area to the amount of total credit, and further detailed matters to be observed otherwise by a mutual savings bank
in carrying out its business
activities under paragraph (1) shall be prescribed by Presidential Decree.
(3) Each mutual savings bank shall facilitate convenience in financial services for ordinary citizens and small
and medium enterprises in
compliance with this Act and orders issued pursuant to this Act in carrying
out its business activities under paragraph (1).
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 12 (Limits on Extension of Credit to Individual Borrowers)
(1) A mutual savings bank may not extend credit to any individual borrower
in excess of the limits prescribed by Presidential Decree within the extent of 20/100 of its equity capital, and the aggregate
of credit extensions
to an individual borrower extended by any mutual savings bank which is affiliated with the former and thus subject
to the consolidated financial
statement (hereinafter referred to as “same affiliated mutual savings
bank”), as prescribed by the Financial Services Commission, shall not exceed the limits prescribed by Presidential
Decree within the extent of
20/100 of its equity capital under the consolidated financial statement.
(2) The aggregate of large credit extensions to an individual borrower
(excluding persons specified by Presidential Decree) may not exceed five times the equity capital of a mutual savings bank.
(3) No mutual savings bank may extend credit to any identical borrower in excess of the limits prescribed by Presidential
Decree within the extent
of 25/100 of its equity capital, and the aggregate of credit extensions
to an identical borrower extended by a same affiliated mutual savings bank shall not exceed the limits prescribed by
Presidential Decree within
the extent of 25/100 of its equity capital under the consolidated financial
16
statement.
(4) Paragraphs (1) through (3) shall not apply to the following cases as specified by Presidential Decree:
1. Where it is necessary for improving the national economy or raising the effectiveness in securing claims of a mutual
savings bank or a
same affiliated mutual savings bank;
2. Where a change in the equity capital of a mutual savings bank or a same affiliated mutual savings bank, a change
in the composition
of an identical borrower, or any other cause or event has caused the
mutual savings bank or the same affiliated mutual savings bank to exceed the limits under paragraphs (1) through (3), although
the bank
has not extended additional credit;
3. Where a mutual savings bank or a same affiliated mutual savings bank extends the amount of credit which is directly
required for the
State, local governments, or public agencies as prescribed by
Presidential Decree in carrying out a local development project as prescribed by Presidential Decree.
(5) In cases where a mutual savings bank or a same affiliated mutual
savings bank happens to exceed the limits under paragraphs (1) through
(3) due to a cause or event under paragraph (4) 2, the bank shall make efforts to comply with the limits within one year
from the day on which
it exceeds such limits.
(6) If there are unavoidable circumstances due to the maturity and amount, etc. of credit extended, a mutual savings bank or a same
affiliated mutual
savings bank may extend the period of time, notwithstanding paragraph
(5), subject to the approval of the Financial Services Commission.
(7) A mutual savings bank or a same affiliated mutual savings bank that
desires to obtain approval under paragraph (6) shall submit a detailed plan of its efforts to comply with the limits
under paragraphs (1) through
(3), no later than three months before the end of the period under paragraph
(5), to the Financial Services Commission, and the Financial Services
Commission shall make a decision as to whether to grant approval of the detailed plan within one month from the day on which the
plan is submitted
and shall notify the bank of its decision.
(8) The limits on credit extension of a same affiliated mutual savings bank shall be managed by a mutual savings
bank which shall prepare
17
the consolidated financial statement (hereinafter referred to as “holding mutual savings bank”), and the holding
mutual savings bank may require
the same affiliated mutual savings banks to submit data concerning the
current state of their credit extensions within the scope of management purpose of their credit extension limits.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 12-2 (Prerequisites for Acquisition of Stocks Issued by Large
Shareholders)
(1) A mutual savings bank shall, when it intends to acquire stocks issued
by any of its large shareholders (including their specially related persons;
the same shall apply hereafter in this Article and Articles 12-3 and 22-4)
and with a value equivalent to or more than the amount prescribed by
Presidential Decree, refer the case to its board of directors for resolution.
In such cases, such resolution shall be adopted by the board of director with an affirmative vote of all incumbent directors.
(2) A mutual savings bank shall, when it acquires stocks issued by any
of its large shareholders with a value equivalent to or more than the amount prescribed by Presidential Decree, report the fact to
the Financial Services
Commission forthwith, and shall disclose it to the public through its Internet
homepage or any similar means.
(3) Each mutual savings bank shall submit quarterly reports on matters subject to mandatory reporting under paragraph
(2) as prescribed by
Presidential Decree, and disclose the reports to the public through its
Internet homepage or any similar means.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 12-3 (Prohibition on Undue Influence of Large Shareholders)
No large shareholder of a mutual savings bank shall conduct any of the
following acts for his/her own interest in conflict with the interests of
the bank:
1. Demanding the bank to furnish him/her with any material or information undisclosed to the public with intent to exercise
undue influence:
Provided, That cases falling under Article 10-5 (3) shall be excluded
herefrom;
2. An act of exercising undue influence over personnel or business
management of the bank in collusion with other shareholders on condition that they paid back with economic interests
or any other
18
consideration;
3. Any other act similar to an act under subparagraph 1 or 2, as specified by Presidential Decree.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 13 Deleted. <by Act No. 5738, Feb. 1, 1999>
Article 14 Deleted. <by Act No. 4867, Jan. 5, 1995>
Article 15 (Assets for Reserves)
Each mutual savings bank shall retain assets for reserve in the form of
cash, deposits in financial institutions, deposits in the Korea Federation
of Savings Banks under Article 25, or securities specified by Presidential
Decree, as prescribed by the Financial Services Commission, within the limit of 50/100 of total amount of installment
savings, deposits, and
installment deposits received from customers.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 16 Deleted. <by Act No. 5738, Feb. 1, 1999>
Article 17 (Restriction on Borrowings)
No mutual savings bank may borrow loans in excess of its equity capital:
Provided, That the foregoing shall not apply in cases where it has obtained
approval from the Financial Services Commission for such excessive
borrowings.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 18 (Management of Surplus Funds)
Each mutual savings bank shall, whenever it has any surplus funds, manage
the funds in any of the following ways:
1. By depositing the funds in any financial institutions designated and publicly notified by the Financial Services Commission;
2. By purchasing securities specified by the Financial Services
Commission;
3. By depositing the funds in the Korea Federation of Savings Banks under Article 25;
4. By depositing the funds in any of the ways prescribed by the Financial
Services Commission.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 18-2 (Prohibited Activities)
No mutual savings bank may perform any of the following acts:
1. To invest in securities (excluding those specified by the Financial
Services Commission) in excess of its equity capital. In such cases,
19
the Financial Services Commission may set up the limit on investment for each class of securities separately within the extent
necessary
for the healthier management of mutual savings banks;
2. To own any real estate other than real estate for business purposes:
Provided, That this shall not apply to an acquisition of real estate
by the exercise of its security rights;
3. To provide any guarantee for performance of an obligation or offering any asset as security (excluding cases of providing
guarantee for
performance of an obligation or offering any asset as security, as
specified by Presidential Decree, as having significantly low credit risks in providing such guarantee or offering the
asset as security);
4. To extend credit, in a direct or indirect manner, for making the borrower
purchase stocks of the mutual savings bank, or to extend credit secured by the securities of the mutual savings bank;
5. To extend credit for speculating on products or securities;
6. To extend credit using another person's name;
7. To provide large shareholders under Article 37 (1) with money, services, or any other monetary gains without justifiable
grounds: Provided,
That the provisions of Article 37 shall govern any prohibition of credit extension or provisional payment to large shareholders,
etc.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 18-3 (Amendment, etc. of Terms and Conditions)
(1) Each mutual savings bank shall protect the rights and interests of
financial users and, when it enacts or amends any terms and conditions
on financial transactions (hereinafter referred to as “terms and conditions”), report such to the Financial Services Commission
beforehand: Provided,
That in any of the following cases, a mutual savings bank shall make a report to the Financial Services Commission
within ten days from the date on which any terms and conditions are newly made or amended:
1. When the bank changes terms and conditions in respect of matters
which have no connection with the rights and duties of financial users;
2. When the bank uses the standard terms and conditions under paragraph
(3) without any changes thereto;
3. When the contents of the terms and conditions to be enacted or amended are the same as those already reported to the
Financial Services
Commission by another mutual savings bank;
20
4. When the bank changes any terms and conditions or the standard terms and conditions in compliance with an order
to change issued
under paragraph (6).
(2) Each mutual savings bank shall, whenever it enacts or amends its terms and conditions, make them public on its Internet
homepage, etc.
(3) In order to establish sound trade rules and prevent unfair terms and
conditions from being widely used, the Chairman of the Korea Federation of Savings Bank (which means the Korea Federation
of Savings Bank
established under Article 25; the same shall apply hereafter in this Article)
may enact or amend standard terms and conditions which might serve as criteria for financial transactions in the mutual
savings bank business
(hereinafter referred to as the “standard terms and conditions”).
(4) The Chairman of the Korea Federation of Savings Bank shall, whenever he/she enacts or amends the standard terms and conditions,
report such
to the Financial Services Commission beforehand.
(5) The Financial Services Commission shall notify the Fair Trade
Commission of the terms and conditions or the standard terms and conditions reported under paragraph (1) or (4).
In such cases, if the Fair
Trade Commission acknowledges that the terms and conditions or the standard terms and conditions so reported violate any
provision of Articles
6 through 14 of the Regulation of Standardized Contracts Act, it may
notify the Financial Services Commission thereof and require the
Commission to take measures necessary for correcting such violation(s), and the Commission shall comply with the request absent
any extraordinary
circumstances.
(6) If the Financial Services Commission acknowledges that any terms and conditions or the standard terms and conditions
violate this Act or
other finance-related statutes, or might undermine the interests of financial users otherwise, it may order the
relevant mutual savings bank
or the Chairman of the Korea Federation of Savings Bank to amend the
terms and conditions or the standard terms and conditions in written form detailing the violation or such. In such cases,
the Financial Services
Commission shall consult with the Fair Trade Commission before issuing
such order for amendment.
[This Article Newly Inserted by Act No. 10175, Mar. 22, 2010]
Article 19 (Disposal of Income)
21
(1) Each mutual savings bank shall accumulate at least 10/100 of its income earned each year as a reserve until the reserve
becomes equivalent
to the total amount of its capital.
(2) The reserve under paragraph (1) may not be spent, except for setting off its losses and transferring it to capital.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 20 Deleted. <by Act No. 5738, Feb. 1, 1999>
Article 21 (Dissolution)
A mutual savings bank shall be dissolved if any of the following events
occurs:
1. When the business license under Article 24 (2) is revoked;
2. When a merger under Article 10 (1) 1 occurs or when the business
is entirely discontinued or transferred in accordance with subparagraph
2 of the said paragraph;
3. When contracts are entirely transferred in accordance with Article
24-9 (3), 24-11 (1), or 24-15 (2);
4. When contracts are transferred in accordance with Article 14 (2) of the Act on the Structural Improvement of
the Financial Industry
(applicable only to cases where contracts are entirely transferred)
or when the business is entirely transferred in accordance with Article
26 of the said Act.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
CHAPTER Ⅲ SUPERVISION
Article 22 (Supervision)
(1) Each mutual savings bank shall be subject to the supervision of the
Financial Services Commission.
(2) The Financial Services Commission may, when it acknowledges that customers' rights and interests might be undermined,
issue an order to
a mutual savings bank as may be necessary for supervision.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 22-2 (Standards for Soundness in Business Management)
(1) The Financial Services Commission may establish the following
standards for soundness in business management, as prescribed by
Presidential Decree, in order to guide mutual savings banks for healthier management and prevent financial accidents:
22
1. Standards for financial soundness;
2. Standards for grading of asset soundness;
3. Standards for accounting and settlement of accounts;
4. Standards for risk management;
5. Standards for liquidity.
(2) Each mutual savings bank shall comply with the standards for
soundness in business management under paragraph (1) in carrying out business affairs under Article 11.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 22-3 (Internal Control Standards)
(1) Each mutual savings bank shall establish basic procedure and standards
with which its executives and employees shall comply in performing their
duties (hereafter referred to as “internal control standards” in this Article)
to observe relevant statutes, manage its assets in an improved manner, and protect its customers.
(2) Each mutual savings bank shall have one or more persons who shall be responsible for monitoring whether the internal
control standards are
complied with, investigating into violations of the internal control
standards, and reporting the results of his/her investigation to the auditor or audit committee (hereinafter referred to as “compliance
officers”).
(3) A mutual savings bank that intends to appoint or dismiss a compliance
officer shall refer the case to its board of directors for resolution. (4) Each compliance officer shall meet the following
requirements:
1. He/she shall have any of the following career experience:
(a) Working for the Bank of Korea or any institution subject to inspections under Article 38 of the Act on the
Establishment, etc.
of Financial Services Commission (or a foreign financial institution
equivalent to such institution) for ten years or longer;
(b) Working for a research institute, college, or university as a researcher or a full-time lecturer or with a higher position
for five years or
longer, with a master or higher degree in a finance-related field;
(c) Engaging in a business relating to his/her qualification for five years or longer as an attorney at law or a certified
public accountant;
(d) Working for the Ministry of Strategy and Finance, the Financial
Services Commission, the Securities and Futures Commission under the Act on the Establishment, etc. of Financial Services Commission
23
(hereinafter referred to as the “Securities and Futures Commission”), the Financial Supervisory Service established under
the same Act
(hereinafter referred to as the “Financial Supervisory Service”), or
the Korea Deposit Insurance Corporation established under the
Depositor Protection Act (hereinafter referred to as the “Korea Deposit
Insurance Corporation”) for five years or longer (limited to those
for whom five years have passed since his/her retirement or resignation from the agency: Provided, That if it is necessary for
performing duties of insolvent financial institutions or insolvency-threatened financial institutions
under Article 2 of the Depositor Protection Act, or financial institutions for resolution
under Article 36-3 of the same Act, the foregoing shall include persons
who have been working for the Korea Deposit Insurance Corporation for five years or longer;
2. He/she shall not fall under any subparagraph of Article 35-2 (1);
3. He/she shall not have any record of having been subjected to a disposition of a demand for caution or warning from the
Financial Services
Commission or the Governor of the Financial Supervisory Service
(hereinafter referred to as the “Governor of the Financial Supervisory
Service”) due to his/her violation of any finance-related statute during the latest five years.
(5) Necessary matters concerning the internal control standards and compliance officers shall be prescribed by Presidential
Decree.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 22-4 (Request, etc. to Mutual Savings Banks, etc. for Materials)
(1) The Financial Services Commission may, when it suspects that a mutual
savings bank or any of its large shareholders has violated Article 12-2,
12-3, or 37, demand the bank or such large shareholder or shareholders to submit materials as required.
(2) The Financial Services Commission may, if it is anticipated that the
bad financial structure of a mutual savings bank, due to liabilities of a large shareholder (only in cases where the
large holder is a company)
exceeding its assets, is likely to significantly undermine the soundness
in business management of the bank, as further prescribed by Presidential
Decree, take the following measures against the bank:
1. Prohibition on new acquisition of securities issued by large shareholders;
24
2. Other measures prescribed by Presidential Decree, including restriction on transactions with large shareholders in the nature of financial aid.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 22-5 (Submission of Business Reports)
(1) Each mutual savings bank shall submit a monthly report stating the
business activities conducted for a month to the Governor of the Financial
Supervisory Service by the end of the following month, as prescribed by
the Governor of the Financial Supervisory Service.
(2) The report under paragraph (1) shall be signed or affixed with a seal by the representative of the mutual savings bank, or
the person in charge
or his/her agent.
[This Article Newly Inserted by Act No. 10175, Mar. 22, 2010]
Article 23 (Inspections)
(1) The Governor of the Financial Supervisory Service may assign his/her
employees to conduct an inspection on the business activities and assets of a mutual savings bank.
(2) The Governor of the Financial Supervisory Service may, if deemed
necessary for the inspection under paragraph (1), demand a mutual savings bank to submit a report on its business activities
or assets or submit
data, or have its relevant people appear before him/her to make statements.
(3) Each person who conducts an inspection under paragraph (1) shall carry a certificate indicating his/her authority
with him/her and present
it to the people concerned.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 23-2 (Disclosure of Business Management)
Each mutual savings bank shall disclose to the public, as prescribed by
the Financial Services Commission, matters specified by Presidential
Decree as necessary for protecting customers and maintaining a good credit system.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 23-3 (Report of Illegal Activities and Protection of Reporters)
(1) Any person who comes to know any violation of this Act or who is
forced or proposed to commit such violation may report or blow the whistle thereon to the Financial Services Commission or
the Governor of the
Financial Supervisory Service, as prescribed by Presidential Decree.
(2) The Financial Services Commission or the Governor of the Financial
25
Supervisory Service (if the report or whistle-blowing is made by an executive or employee of a mutual savings bank, including such
executive or employee)
that receives a report or information as prescribed in paragraph (1) shall
respect the confidentiality of the identity of such reporter or whistle-blower
(hereafter referred to as “reporter, etc.” in this Article) or other relevant information.
(3) No agency, organization, or company whereto a reporter, etc. belongs shall treat, in any direct or indirect manner, such
reporter, etc. unfavorably
because of the report or whistle-blowing.
(4) The Financial Services Commission or the Governor of the Financial
Supervisory Service may grant reward money to a reporter, etc. as prescribed by Presidential Decree.
[This Article Newly Inserted by Act No. 10175, Mar. 22, 2010]
Articles 23-4 through 23-9 Deleted. <by Act No. 5050, Dec. 29, 1995>
Article 23-10 Deleted. <by Act No. 5738, Feb. 1, 1999>
Article 23-11 (Liquidation)
(1) The Financial Services Commission shall, when a mutual savings bank
is dissolved due to any of the following reasons, appoint a liquidator for
such bank:
1. Approval on the transfer of contracts under Article 24-9 (3), or a decision under Article 24-11 (1) or 24-15 (2);
2. Revocation of the business license under Article 24 (2).
(2) A liquidator shall, immediately upon his/her inauguration, inspect the current status of assets of the mutual savings
bank concerned, prepare
a list of assets and a balance sheet for approval by a general meeting of its shareholders. The foregoing shall also apply
to a report on settlement
of accounts at the time the procedures for the liquidation are completed.
(3) In cases under paragraph (2), if the general meeting of shareholders is not duly formed although it has been called
two or more times, or a
liquidator fails to obtain approval from the general meeting of shareholders,
the approval of the Financial Services Commission at the liquidator's request shall be deemed the approval of the general
meeting of shareholders.
(4) The Financial Services Commission may, when it appoints a liquidator
for a mutual savings bank, require the bank to pay remuneration for the liquidator.
(5) The Financial Services Commission may, in its discretion or at the
26
request of an interested party, dismiss a liquidator, if necessary.
(6) Except as provided for in this Act, the provisions of the Commercial
Act relating to liquidation shall apply mutatis mutandis to the liquidation
of a mutual savings bank.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 24 (Administrative Dispositions)
(1) The Financial Services Commission may, if any mutual savings bank
or its executives or employees fall under any subparagraph of attached
Table 1, take any of the following measures:
1. Issuing a caution or warning to the mutual savings bank or demanding the bank to issue a caution, warning, or reprimand to
the executives
or employees concerned;
2. Issuing an order to correct such a violation;
3. Recommending the bank to remove the executive concerned or suspend the performance of his/her duties;
4. Suspending its business partially for a prescribed period of not more than six months.
(2) The Financial Services Commission may, when a mutual savings bank
falls under any of the following subparagraphs, issue an order to suspend its business completely for a prescribed period of not
more than six months
or revoke its business license:
1. If the bank obtains the business license by fraudulent or other illegal means;
2. If its equity capital has been completely impaired by deficits;
3. If the bank conducts an act under any subparagraph of Article 10 (1) without approval;
4. If the bank fails to comply with an order issued pursuant to paragraph
(1) 2 for corrective measures;
5. If the bank continues its business during the business suspension period;
6. If the bank is likely to severely undermine public interest because it violates any other statute or its articles
of incorporation, or the
status of its assets or business management is inadequate.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
CHAPTER Ⅲ-2 BUSINESS
27
NORMALIZATION OF
INSOLVENT MUTUAL SAVINGS BANKS
Article 24-2 (Business Guidance)
(1) The Financial Services Commission may, if a mutual savings bank
falls under any of the following subparagraphs, provide business guidance to such a bank:
1. If an inspection under Article 23 (1) reveals that the bank has extended
credit to an individual borrower in excess of the limit, extended a large amount of credit illegally, or extended credit
to a large shareholder,
as prescribed by Presidential Decree;
2. If any of its executives becomes subject to a disposition under Article
24 (1) 1 or 3 (which shall be limited only to a disposition specified by Presidential Decree);
3. If it is deemed necessary to provide business guidance as a result of the inspection under Article 23 (1);
4. If the mutual savings bank becomes subject to a prompt corrective
action pursuant to Article 10 of the Act on the Structural Improvement of the Financial Industry.
(2) Necessary matters concerning the prerequisites, method, time period,
and procedure for the business guidance under paragraph (1) shall be prescribed by Presidential Decree.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 24-3 (Business Administration)
(1) The Financial Services Commission may, if a mutual savings bank
falls under any of the following subparagraphs, appoint an administrator
forthwith to assign him/her to administer the business of the bank:
1. When it is found as a result of the inspection under Article 23 (1)
that the illegal or non-performing credit extended by the mutual savings
bank is likely to completely impair its capital and it is deemed difficult for the bank to promote business normalization on
its own because
it is not possible to collect such within a short period of time in an
ordinary manner;
2. When there is any ground to revoke its business license under Article
28
24 (2) and the business administration is necessary for protecting depositors;
3. When it is deemed necessary to correct its business practices through
business administration because the bank has been subject to the business guidance for a long time or repeatedly, or
an order to take
corrective measures against the bank was issued because of its violation
of this Act, but the bank has not taken corrective measures within a reasonable period of time;
4. When it is deemed necessary to subject the bank to business
administration for protecting depositors because it has repeatedly extended credit or cross-extended credit as defined
in Article 37 (1)
or (2) to a person falling under any subparagraph of paragraph (1)
of the said Article or the amount of credit extended to such person is excessive.
(2) Further specific conditions required for the business administration
under paragraph (1) 1, 3, and 4 shall be prescribed by Presidential Decree. (3) Once the business administration under paragraph
(1) commences,
the administrator shall inspect the current status of assets (hereinafter
referred to as “actual inspection of assets”) of the mutual savings bank forthwith.
(4) The term for the business administration shall not exceed six months,
but may be extended only once within the limit of six months, if the Financial
Services Commission deems it inevitable for promoting business normalization: Provided, That the term for the business administration
may be extended until a bankruptcy administrator is appointed in accordance with Article 355 of the Debtor
Rehabilitation and Bankruptcy Act, in cases where an application for bankruptcy has been filed in accordance with
Article 24-13.
(5) A mutual savings bank that becomes subject to business administration under paragraph (1) shall issue public notice of the substance
of the business administration forthwith as prescribed by Presidential Decree.
(6) Articles 14-3 (2) and 14-6 (1) and (2) of the Act on the Structural Improvement of the Financial Industry shall
apply mutatis mutandis to the appointment of an administrator under paragraph (1).
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 24-4 (Suspension of Payments, etc.)
29
(1) When the business administration under Article 24-3 (5) is publicly notified, payments for all obligations (excluding
cases as prescribed by
Presidential Decree, such as taxes and public dues), executives' execution
of duties, and transfer of shares held by shareholders shall be suspended simultaneously.
(2) The Financial Services Commission may, if it is found as a result
of the actual inspection that it is possible to normalize the business of the mutual savings bank concerned or if
there is any other ground as
specified by Presidential Decree, partially or completely lift the suspension
under paragraph (1).
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 24-5 (Authority, etc. of Administrator)
(1) Any person who has an interest in or is specially related to a mutual
savings bank may not be appointed as the administrator of such bank.
(2) Each administrator shall have the authority to carry out the business
affairs of the mutual savings bank subject to the business administration and manage and dispose of its assets. In this
case, the administrator
may not assert his/her authority against a third party in performing any
legal act such as disposition of assets of the bank, unless and until he/she completes registration under Article 24-6.
(3) Each administrator may, if necessary for securing claims for illegal
and non-performing credit extensions, investigate into the assets of a person who is jointly liable for the obligations
relating to deposits and
similar in accordance with Article 37-3, a person who is liable for damage
under Article 399 (1) or 414 (1) of the Commercial Act, or an obligor to take measures as may be necessary, including an application for
provisional attachment.
(4) Each administrator may demand an executive or a large shareholder of the mutual savings bank concerned to submit a
scheme for business
normalization of the bank, including schemes for increasing capital and
offering assets as additional security, within a prescribed period of not less than two weeks, but not exceeding one month.
(5) Each administrator shall, whenever he/she performs any act within
the extent of his/her authority, indicate that such act is performed for the mutual savings bank subject to the business
administration.
(6) An act performed without making the indication under paragraph (5)
30
shall be deemed to be an act done for his/her own interest.
(7) The Financial Services Commission may, if deemed necessary, dismiss an administrator.
(8) Article 35 (1) of the Civil Act, Article 11 (1) of the Commercial Act, and Articles 30 and 360 through 362 of the Debtor Rehabilitation and
Bankruptcy Act shall apply mutatis mutandis to the administrators. In
such cases, the term “court” in Articles 30 and 360 through 362 of the
Debtor Rehabilitation and Bankruptcy Act shall be construed as the
“Financial Services Commission.”
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 24-6 (Notices and Registration of Business Administration)
(1) The Financial Services Commission shall, when it initiates the business
administration pursuant to Article 24-3, notify its action forthwith to the district court having jurisdiction
over the address of the principal
office of the mutual savings bank subject to the business administration,
and shall request the registry office having jurisdiction over the addresses of the principal office and branch offices to register
the details of its action.
(2) Registry offices shall, upon receiving the request under paragraph
(1), register such details forthwith.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 24-7 (Cessation of Business Administration)
(1) The Financial Services Commission shall, when the business
administration is no longer required because the conditions required for the business administration under Article 24-3
have been eliminated and
it is deemed possible for the mutual savings bank concerned to promote business normalization of its own accord, shall terminate
it immediately.
(2) Article 24-6 shall apply mutatis mutandis to a notification of cessation
of business administration and a registration under paragraph (1).
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 24-8 (Demand for Transfer of Contracts)
(1) The Financial Services Commission shall, when it is found as a result
of the actual inspection of assets of a mutual savings bank that it is impossible for the bank to fully perform
its obligations with its assets
and thus the bank falls under any of the following subparagraphs, designate a person who shall take over contracts (hereinafter
referred to as “transfer
of contracts”) and demand the bank to transfer them to the person:
31
1. If a mutual savings bank wishes to take over contracts:
2. If it is deemed more desirable to transfer contracts, rather than the bank going bankrupt according to the standards
set by Presidential
Decree.
(2) A mutual savings bank that wishes to take over contracts of another mutual savings bank in accordance with paragraph
(1) shall file an
application with the Financial Services Commission for such designation.
(3) The standards and procedure for the designation under paragraph
(2) shall be prescribed by Presidential Decree.
(4) Article 24-3 (5) shall apply mutatis mutandis to a public notice of
the demand for transfer of contracts under paragraph (1).
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 24-9 (Agreement and Approval on Transfer of Contracts)
(1) A mutual savings bank shall, when it is demanded to transfer its
contracts in accordance with Article 24-8 (1), enter into an agreement
with the designated mutual savings bank for the transfer of contracts
(hereafter referred to as “agreement”).
(2) Both mutual savings banks that intend to enter into the agreement
shall pass a resolution under Article 434 of the Commercial Act (or consent of two-thirds of all partners, if either party involved is a limited partnership
company).
(3) When the agreement is duly made, both mutual savings banks shall obtain approval on the transfer of contracts from
the Financial Services
Commission forthwith.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 24-10 (Requests, etc. for Financial Aid)
(1) The Financial Services Commission may, if deemed necessary to provide
financial aid in designating a mutual savings bank to take over contracts in accordance with Article 24-8 (2), request the
Korea Deposit Insurance
Corporation to determine the substance, terms, and conditions of the
financial aid pursuant to Article 38 of the Depositor Protection Act.
(2) The Korea Deposit Insurance Corporation shall, upon receiving request under paragraph (1), determine the substance, terms,
and conditions of
the financial aid forthwith and notify the Financial Services Commission of its determination.
(3) The Financial Services Commission may, if deemed necessary for
32
granting approval under Article 24-9 (3) or making a decision under Article
24-11 (1), determine the substance, terms, and conditions of the financial aid within the maximum limit notified by
the Korea Deposit Insurance
Corporation in accordance with paragraph (2), notwithstanding Article
38 of the Depositor Protection Act.
(4) The Financial Services Commission may, when a financial aid is deemed
necessary because there is a run on any mutual savings bank or such run is likely to occur on any mutual savings
bank, request the Korea
Federation of Savings Banks under Article 25 to provide financial aid
to the mutual savings bank.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 24-11 (Decisions on Transfer of Contracts)
(1) The Financial Services Commission may, when a mutual savings bank
that has received a demand for the transfer of contracts under Article
24-8 and another mutual savings bank that was designated as a person
who shall take over the contracts fail to reach an agreement or did not negotiate for such an agreement, make a decision
on the transfer of such
contracts.
(2) In making a decision on the transfer of contracts pursuant to paragraph
(1), the Financial Services Commission shall, if the substance, terms, and conditions of the financial aid required
for the mutual savings bank
that shall take over contracts exceeds the maximum limit of the substance, terms, and conditions notified by the Korea Deposit
Insurance Corporation
in accordance with Article 24-10 (2), consult with the Korea Deposit
Insurance Corporation in advance.
(3) The Financial Services Commission shall, when it makes a decision under paragraph (1), notify both mutual savings
banks and the Korea
Deposit Insurance Corporations of the details of its decision.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 24-12 (Effectiveness and Public Notices of Transfer of Contracts)
(1) The transfer of contracts shall become effective when approval under
Article 24-9 (3) is granted or a decision is made under Article 24-11 (1). (2) A mutual savings bank that has obtained approval
or has been notified
of a decision in accordance with paragraph (1) shall publicly notify the purposes and abstract of the approval or decision
on the transfer of contracts
respectively, as prescribed by Presidential Decree.
33
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 24-13 (Application for Bankruptcy)
The Financial Services Commission may, when it is discovered as a result
of an actual inspection of assets of a mutual savings bank under business administration pursuant to Article 24-3 that the
bank is unable to fully
perform its obligations with its assets, but does not fall under any
subparagraph of Article 24-8 (1) or the bank fails to obtain an approval under Article 24-9 (3) or a decision under
Article 24-11 (1), file an
application for bankruptcy with the district court having jurisdiction over
the address of the principal office of the bank in its own discretion or upon recommendation by the Korea Deposit Insurance
Corporation.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 24-14 (Nomination of Auditor)
If any of the events set forth in Presidential Decree occurs to a mutual
savings bank that shall receive an external audit in accordance with the
Act on External Audit of Stock Companies, the Financial Services
Commission may request the Securities and Futures Commission to nominate an auditor for the bank pursuant to
Article 4-3 of the same
Act.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 24-15 (Coordination in Promotion of Business Normalization)
(1) The Financial Services Commission may, when it is deemed necessary
for protecting depositors and establishing a sound credit system, recommend or arrange the transfer of business
or stocks or a merger to
the mutual savings bank that is promoting business normalization in accordance with Articles 24-2 through 24-12.
(2) The Financial Services Commission may, if deemed necessary for
protecting depositors because the status of the business or assets of a mutual savings bank is significantly unhealthy
or any of its executives,
employees, or shareholders specified by Presidential Decree is likely to
conceal its assets, take measures necessary for promoting business normalization, such as making a decision on the transfer
of contracts under
Article 24-11 (1), filing an application for bankruptcy under Article 24-13,
and arranging transfer of business or a merger, without necessarily subjecting the bank to business administration.
(3) Article 24-10 shall apply mutatis mutandis to cases under paragraph
34
(2).
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
CHAPTER Ⅳ KOREA FEDERATION OF SAVINGS BANKS
Article 25 (Establishment)
(1) There shall be established the Korea Federation of Savings Banks
(hereinafter referred to as the “Federation”) for the purposes of promoting
the healthier growth of mutual savings banks, encouraging business cooperation between them, establishing a
sound credit system, and
protecting their customers.
(2) The Federation shall be incorporated as a corporation.
(3) Mutual savings banks shall be eligible for the membership in the
Federation.
(4) The Federation shall have its principal place of business in Seoul
Special Metropolitan City and may have branches in any place as required. (5) The Federation shall be duly formed when it
completes registration
of incorporation at the location of its principal place of business, as prescribed by Presidential Decree.
(6) The Federation shall have a general meeting and a board of directors,
and the management and matters for resolution of the general meeting and the board of directors shall be prescribed by Presidential
Decree.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 25-2 (Business)
(1) The Federation shall carry out the following business activities in
order to accomplish its purposes defined in this Act:
1. Conducting research and surveys for the improvement and development of the business of mutual savings banks;
2. Carrying out business activities for encouraging business cooperation
between mutual savings banks, establishing a sound credit system, and protecting their customers;
3. Receiving and managing deposits and deposits for reserve from mutual
savings banks;
4. Granting loans to mutual savings banks, and purchasing commercial notes possessed or sold by mutual savings banks;
35
5. Providing mutual savings banks with the guarantee for performance of payment;
6. Providing domestic exchange services and carrying out business affairs
commissioned by the State, a public organization, or a financial institution;
7. Offering, underwriting, and selling State bonds and local government
bonds under Article 4 (3) of the Financial Investment Services and
Capital Markets Act;
8. Establishing and operating subsidiaries for common interests of mutual
savings banks or investing in any other corporation;
9. Issuing and managing electronic means for debit payment under the
Electronic Financial Transactions Act and carrying out the settlement
of payments therefor;
10. Issuing, managing, and selling electronic means for advance payment under the Electronic Financial Transactions Act and
carrying out the
settlement of payments therefor;
11. Carrying out business affairs entrusted by a national agency, local government, or any other public organization;
12. Carrying out business activities incidental to the business activities under subparagraphs 1 through 11;
13. Carrying out other business activities specified by Presidential Decree.
(2) The Federation shall, when it intends to carry out business activities under paragraph (1), prepare an operating
manual as prescribed by
Presidential Decree and shall obtain approval thereon from the Financial
Services Commission. The foregoing shall also apply to any amendment to the manual.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 25-3 (Articles of Incorporation)
(1) The mandatory provisions that shall be included in the articles of
incorporation of the Federation shall be prescribed by Presidential Decree.
(2) The Federation shall obtain approval on its articles of incorporation from the Financial Services Commission. The
foregoing shall also apply
to any amendment to the articles of incorporation.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 25-4 (Executive Officers)
(1) The Federation shall have, as its executives, one Chairman, one
36
Managing Director, ten or less directors, and one auditor.
(2) The term of each executive of the Federation shall be three years.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 25-5 (Membership Fees)
The Federation may collect membership fees from its members as stipulated
by the articles of incorporation.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 25-6 (Accounting Principles)
(1) Accounts of the Federation shall be managed in compliance with the
Corporate Accounting Standards.
(2) The Federation shall keep a separate account for receiving and managing the deposits for reserve.
(3) The Financial Services Commission may set specific standards concerning soundness in assets, creation of the
reserve for bad debts in
connection with the receipt and management of deposits for reserve under
paragraph (2).
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Articles 25-7 and 25-8 Deleted. <by Act No. 5738, Feb. 1, 1999>
Article 25-9 (Borrowings)
The Federation may, whenever necessary for carrying out its business
activities, borrow loans subject to the prior approval of the Financial
Services Commission, as prescribed by Presidential Decree.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 25-10 (Appointment of Agents)
The Chairman of the Federation may appoint the Managing Director, a
director, or an employee as his/her agent with the delegated power to act on his/her behalf in all affairs relating to the
business of the Federation,
whether in legal proceedings or otherwise.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 25-11 Deleted. <by Act No. 5738, Feb. 1, 1999>
Article 26 Deleted. <by Act No. 5507, Jan. 13, 1998>
Article 27 Deleted. <by Act No. 5738, Feb. 1, 1999>
Article 28 (Prohibition, etc. on Political Activities)
(1) The Federation may not engage in any act related to politics.
(2) No executives of the Federation may participate in any political party or political organization.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
37
Article 29 (Administrative Dispositions against the Federation and its
Officers and Employees)
The Financial Services Commission may, if the Federation or any of its
officers and employees falls under any subparagraph of attached Table
2, take any of the following measures:
1. Issuing a caution or warning to the Federation or demanding the
Federation to issue a caution, warning, or reprimand to the officer or employee concerned;
2. Issuing an order to correct such a violation;
3. Recommending the Federation to remove the officer concerned or suspend the performance of his/her duties;
4. Recommending the Federation to dismiss the employee concerned;
5. Suspending its business partially for a prescribed period of not more than six months.
[This Article Newly Inserted by Act No. 10175, Mar. 22, 2010]
Articles 29-2 through 33-2 Deleted. <by Act No. 4867, Jan. 5, 1995>
Article 34 (Mutatis Mutandis Application)
(1) Except as provided for otherwise by this Act, the provisions of the
Civil Act relevant to incorporated associations shall apply mutatis mutandis
to the Federation.
(2) Articles 22 and 23 shall apply mutatis mutandis to the Federation.
In such cases, the term “mutual savings bank” shall be construed as the
“Federation.”
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
CHAPTER Ⅴ SUPPLEMENTARY PROVISIONS
Article 34-2 (Vicarious Exercise of Authority)
(1) The authority vested in the Financial Services Commission pursuant
to Articles 23-11 (1) and (3) through (5), 24-2 (1), 24-3 (1) and (4),
24-4 (2), 24-5 (7) and (8), 24-6 (1), 24-7, 24-8 (1) and (2), 24-9 (3),
24-10, 24-11, 24-13, 24-14, and 24-15 may be delegated to the Governor of the Financial Supervisory Service, as prescribed by Presidential
Decree,
if deemed necessary for carrying out business activities efficiently with
expertise in promoting business normalization of insolvent mutual savings
38
banks. In such cases, the acts performed vicariously by the Governor of the Financial Supervisory Service shall be deemed to
be those performed
by the Financial Services Commission.
(2) The Governor of the Financial Supervisory Service shall, whenever he/she exercises any authority delegated pursuant
to paragraph (1),
indicate that he/she acts on behalf of the Financial Services Commission.
(3) Any act performed without making the indication under paragraph
(2) shall be deemed to be an act done for his/her own interest.
(4) The Governor of the Financial Supervisory Service shall, whenever
he/she acts on behalf of the Financial Services Commission pursuant to paragraph (1), report important matters
to the Financial Services
Commission.
(5) The standards and procedures for processing business affairs in connection with the vicarious exercise of
the authority of the Financial
Services Commission under paragraph (1) and other necessary matters
may be prescribed by Presidential Decree.
(6) The Governor of the Financial Supervisory Service may, if necessary for vicariously exercising the authority for the
business activities pursuant
to paragraph (1), operate a council composed of representatives of the
Korea Deposit Insurance Corporation, the Federation, and other related institutions.
(7) The Governor of the Financial Supervisory Service may, when he/she promotes business stabilization of an insolvent
mutual savings bank,
request the heads of central administrative agencies to furnish him/her
with informative materials as may be necessary. In such cases, the heads of central administrative agencies shall, upon
receiving such request,
comply with the request, absent any extraordinary circumstances.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 35 (Entrustment of Authority)
(1) The Financial Services Commission may entrust the Governor of the
Financial Supervisory Service, the Federation Chairman, or the President of the Korea Deposit Insurance Corporation with
part of its authority,
other than the authority under Article 34-2 (1), as prescribed by
Presidential Decree.
(2) The Governor of the Financial Supervisory Service shall, when he/she has discovered that a mutual savings bank falls under
any subparagraph
39
of Article 24 (1) or (2) or Article 40 (1) or (2) while exercising the authority entrusted pursuant to paragraph (1), recommend
the Financial Services
Commission to take necessary administrative measures.
(3) The Governor of the Financial Supervisory Service, the Federation
Chairman, or the President of the Korea Deposit Insurance Corporation shall, when he/she exercises the authority entrusted
pursuant to paragraph
(1), report important matters to the Financial Services Commission.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 35-2 (Disqualification of Executives)
(1) No person who falls under any of the following subparagraphs shall
be qualified as an executive of a mutual savings bank: Provided, That
subparagraph 12 shall be applicable only to an auditor and a member
of the audit committee:
1. A minor or a person declared incompetent or quasi-incompetent;
2. A person declared bankrupt, but not yet reinstated;
3. A person in whose case five years have not passed since a sentence of imprisonment without prison labor or any heavier
punishment upon
him/her was completely carried out (or was held as completely carried
out) or discharged;
4. A person in whose case five years have not passed since a sentence of fine or any heavier punishment upon him/her on account of
a violation
of this Act or any finance-related statute specified by Presidential
Decree (hereafter referred to as “finance-related statute” in this Article)
was completely carried out (or was held as completely carried out)
or discharged;
5. A person in whose case the execution of a sentence of imprisonment without prison labor or any heavier punishment was
suspended but
who is still subject to the suspended sentence;
6. A person in whose case five years have not passed since he/she was removed from office or dismissed pursuant to
this Act or a
finance-related statute;
7. Any person who once worked, as an executive or employee, for a corporation or company whose permission, license,
or registration for
business was revoked pursuant to this Act or a finance-related statute
(who is liable, directly or reasonably, for the cause of such revocation, as further specified by Presidential Decree) and in
whose case five
40
years have not passed since the day on which such revocation was enforced against the corporation or company;
8. A person who once worked, or is currently working, as an executive
or employee, for a financial institution (which means a financial institution as defined in subparagraph 1 of
Article 2 of the Act on
the Structural Improvement of the Financial Industry) subjected to
a prompt corrective action by the Financial Services Commission as prescribed in Article 10 (1) of the same Act, or subjected
to a decision
on the transfer of contracts or any other administrative disposition
pursuant to Article 14 (2) of the same Act (applicable only to a person who is liable, directly or reasonably, for the cause
of the prompt
corrective action, etc., as further specified by Presidential Decree)
and in whose case two years have not passed since the day on which such prompt corrective action, etc. was taken against
the financial
institution;
9. A person who is a retired officer or retired employee and for whom five years have not passed since the day on which
he/she could be
notified of such measure as demand for dismissal, improvement, or
removal from office (if such five years from the day on which he/she could be notified exceed seven years from the day of his/her
retirement,
seven years from the day of his/her retirement shall be applicable)
if he/she still worked as an officer or employee pursuant to this Act or a finance-related statute;
10. A person against whom a sanction equivalent to suspension from
office or suspension of performance of business duty was imposed pursuant to this Act or a finance-related statute
and in whose case
three years have not passed since the day on which such sanction
was imposed;
11. A person who is a retired officer or retired employee and for whom three years have not passed since the day on which he/she
could be
notified of such measure as suspension from office or suspension of performance of business duty (if such three years from
the day on
which he/she could be notified exceed five years from the day of his/her
retirement, five years from the day of his/her retirement shall be applicable) if he/she still worked as an officer
or employee pursuant
to this Act or a finance-related statute;
41
12. The oligopolistic shareholder of the mutual savings bank as defined in Article 37-3 (2) and the spouse or lineal ascendant
or descendant
or a sibling of the oligopolistic shareholder or the representative
director.
(2) Any person who falls under any subparagraph of paragraph (1) (excluding subparagraph 12) after he/she becomes
an executive (excluding
an auditor or a member of the audit committee) or who falls under any subparagraph of paragraph (1) after he/she becomes
an auditor or a member
of the audit committee shall immediately be dismissed from his/her office:
Provided, That the foregoing shall not apply to an executive against whom
more severe sanction than the suspension from office or suspension of performance of business duty under subparagraph 10
was imposed, while
he/she was still in active service.
(3) Acts engaged before dismissal by an executive who has been dismissed from his/her office pursuant to paragraph (2) shall
remain in full force
and effect.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 35-3 (Measures Taken on Retired Officers and Employees)
(1) In cases where it is deemed that a retired officer or employee of a
mutual savings bank or the Federation would be subject to a measure under Article 24 (1) 1 or 3, or subparagraph 1 or
3 of Article 29 if he/she
still worked as an officer or employee, the Financial Services Commission
(including persons entrusted with the authority to take measures under
Article 24 (1) 1 or 3, or subparagraph 1 or 3 of Article 29, in accordance
with Article 35 (1)) may notify the mutual savings bank or the Federation of the details of such measure.
(2) A mutual savings bank or the Federation which receives the notification
under paragraph (1) shall notify the relevant executive or employee of such fact and keep a record of it.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 36 (Relationship with other Acts)
(1) The Bank of Korea Act (excluding Article 80 (1) and (3) thereof) and
the Banking Act shall not apply to mutual savings banks.
(2) For purposes of applying Article 45-2 of the Act on the Efficient Disposal of Non-Performing Assets, etc. of
Financial Institutions and the
Establishment of Korea Asset Management Corporation, a mutual savings
42
bank shall be deemed a person falling under any subparagraph of paragraph
(1) of the same Article.
(3) For purposes of applying Article 2 of the Act on External Audit of
Stock Companies, a mutual savings bank shall be deemed a stock company. (4) The Federation shall be deemed a financial institution
under Article
2 of the Banking Act or Article 11 of the Bank of Korea Act, when it
carries out business activities as provided in Article 25-2 (1) 6 through
11.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 37 (Prohibition on Extension of Credit, etc. to Large Shareholders,
etc.)
(1) No mutual savings bank may extend credit to, make a deposit in, or make a provisional payment to, a person falling
under any of the following subparagraphs (hereinafter referred to as “large shareholder, etc.”), and
no large shareholder, etc. of a mutual savings bank may accept extension
of credit, deposit, or a provisional payment from such bank: Provided,
That the foregoing shall not apply to deposits that are prescribed by
Presidential Decree and are not intended as funding for large shareholders,
etc. or to such extension of credit as specified by Presidential Decree if there is no risk in collecting claims or if it
is for the welfare of employees:
1. Large shareholders (including such shareholders as specified by
Presidential Decree);
2. Executives or employees of the mutual savings bank;
3. Such relatives or specially related persons as specified by Presidential
Decree with a person falling under subparagraph 1 or 2 or the mutual savings bank.
(2) A mutual saving banks may not make an exchange with other mutual
savings banks to extend credit to, make a deposit in, or make a provisional payment to, the large shareholders, etc. of such
other mutual savings
bank in order to circumvent the prohibition on extension of credit, deposits,
or provisional payments under paragraph (1).
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 37-2 Deleted. <by Act No. 10175, Mar. 22, 2010>
Article 37-3 (Joint Liability of Executives, etc.)
(1) An executive of a mutual savings bank who inflicts any damage or
loss on the bank or a third party by his/her intentional or negligent conduct
43
in the course of performing his/her duty shall be jointly liable with the bank for the obligations arising in connection
with deposits, etc. in the
bank.
(2) The oligopolistic shareholder of a mutual savings bank (which means a person constituting an oligopolistic shareholder
as defined in Article
39 (2) of the Framework Act on National Taxes) shall, if he/she has caused
the insolvency of the bank as a consequence of his/her influence on the business management of the bank, shall be jointly
liable with the bank
for the obligations arising in connection with deposits, etc. in the bank.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 37-4 (Restrictions on Holding Concurrent Offices of Officers)
No full-time officer of a mutual savings bank may engage in the regular
business of another profit-making corporation: Provided, That the
foregoing shall not apply where he/she falls under any of the following cases:
1. Where he/she becomes an officer or employee of another mutual savings bank of which the mutual savings bank holds stocks
or investment
shares exceeding 15/100 of the total outstanding voting shares or the
total equity investment;
2. Where he/she becomes an officer or employee of a financial holding company as provided by the Financial Holding
Companies Act
(hereinafter referred to as “financial holding company”) which holds the mutual savings bank as its subsidiary;
3. Where he/she becomes an officer or employee of a financial institution
which is another subsidiary of the financial holding company holding the mutual savings bank as its subsidiary;
4. Where he/she is appointed as a custodian in accordance with the Debtor
Rehabilitation and Bankruptcy Act;
5. Where he/she is appointed as a liquidator pursuant to Article 23-11.
[This Article Newly Inserted by Act No. 10175, Mar. 22, 2010]
Article 37-5 (Prohibition on Receiving Bribes, etc.)
No officer or employee of a mutual savings bank may, in relation to his/her
official duties, engage in embezzlement, breach of trust, or donation,
whether direct or indirect, or otherwise demand or receive bribes, or give a promise in relation thereto.
[This Article Newly Inserted by Act No. 10175, Mar. 22, 2010]
44
Article 38 (Hearings)
The Financial Services Commission shall hold a hearing whenever it intends
to revoke a business license pursuant to Article 24 (2).
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
CHAPTER Ⅴ-2 IMPOSITION AND COLLECTION OF PENALTY SURCHARGES
Article 38-2 (Imposition of Penalty Surcharges)
The Financial Services Commission may impose a penalty surcharge upon
a mutual savings bank that falls under any of the following subparagraphs:
<Amended by Act No. 8863, Feb. 29. 2008>
1. In cases where the bank has extended credit in excess of the limit on credit extension under Article 12: Not
more than 10/100 of the
amount of the excess credit extension;
2. In cases where the bank has extended credit or made a provisional payment in violation of Article 37: Not more than 20/100
of the amount
of the credit extended or provisional payment.
[This Article Newly Inserted by Act No. 8522, Jul. 19, 2007]
Article 38-3 (Guidelines for Imposition of Penalty Surcharges)
The guidelines for imposition of a penalty surcharge under Article 38-2
shall be prescribed by Presidential Decree, considering the following factors:
1. Substance and gravity of the violation;
2. Duration and frequency of the violation;
3. Amount of benefit derived from the violation.
(2) Necessary matters concerning the imposition of penalty surcharges
shall be further prescribed by Presidential Decree.
[This Article Newly Inserted by Act No. 8522, Jul. 19, 2007]
Article 38-4 (Presentation of Statements)
(1) The Financial Services Commission shall, prior to imposing any penalty
surcharge, provide the party concerned or an interested party an opportunity to make a statement. <Amended by Act No. 8863, Feb. 29. 2008>
(2) The party concerned or an interested party may make an appearance
in person at a hearing of the Financial Services Commission to make a
45
statement or submit materials as may be necessary. <Amended by Act No.
8863, Feb. 29. 2008> [This Article Newly Inserted by Act No. 8522, Jul. 19, 2007]
Article 38-5 (Objections)
(1) Any person who is dissatisfied with a penalty surcharge under Article
38-2 may file an objection with the Financial Services Commission, which
shall cleary state the reasons for such objection, within 30 days from the date on which a notice of the disposition is served.
<Amended byAct No. 8863,
Feb. 29. 2008>
(2) The Financial Services Commission shall make a decision on the
objection filed in accordance with paragraph (1) within 30 days from the
filing date of the objection: Provided, That the deadline may be extended
within the limit of 30 days, if it is impossible to make a decision within the period of time due to an unavoidable cause
or event. <Amended by Act
No. 8863, Feb. 29. 2008> [This Article Newly Inserted by Act No. 8522, Jul. 19, 2007]
Article 38-6 (Extension of Deadline for Payment of Penalty Surcharge
and Payment in Installments)
(1) The Financial Services Commission may, if it is deemed difficult for
a person to whom the penalty surcharge has been imposed (hereinafter referred to as “penalty surcharge payer”) to pay
the full amount of the
penalty surcharge at a time due to any of the following circumstances, extend the payment deadline or allow him/her
to pay it in installments.
In such cases, it may require the penalty surcharge payer to offer an asset
as security, if deemed necessary: <Amended by Act No. 8863, Feb. 29. 2008>
1. If he/she has sustained severe damage to his/her property by disaster;
2. If his/her business is in a critical crisis due to worsened business
conditions;
3. If it is anticipated that he/she is likely to face severe hardship in his/her financial circumstances if the penalty
surcharge should be paid
in lump sum;
4. If exists any other reason similar to any of those under subparagraphs
1 through 3.
(2) Any penalty surcharge payer who desires to have the payment deadline for the penalty surcharge under paragraph (1) extended
or to pay it in
installments shall file an application therefor with the Financial Services
46
Commission by no later than ten days before the deadline. <Amended by
Act No. 8863, Feb. 29. 2008>
(3) The Financial Services Commission may, if the payment was extended in accordance with paragraph (1) or the payment in
installments was allowed, but the penalty surcharge payer falls under any of the following
subparagraphs, revoke its decision to extend the deadline or allow the
payment in installments and collect the penalty surcharge in a lump sum:
<Amended by Act No. 8863, Feb. 29. 2008>
1. If he/she has not paid the penalty surcharge in installments as decided within the time limit:
2. if he/she has not complied with an order issued by the Financial Services
Commission as required for preservation of security, such as
replacement of security;
3. If it is found impossible to collect the full amount or remainder of the penalty surcharge due to forced execution,
commencement of
auction, declaration of bankruptcy, dissolution of the legal entity, collection of delinquent national or local taxes,
etc.;
4. If any other cause or event similar to those under subparagraphs 1
through 3 exists, as specified further by Presidential Decree.
(4) Necessary matters concerning the extension of the clear deadline for penalty surcharge, payment in installments, or
security under paragraphs
(1) through (3) shall be prescribed by Presidential Decree.
[This Article Newly Inserted by Act No. 8522, Jul. 19, 2007]
Article 38-7 (Collection of Penalty Surcharges and Dispositions against
Default)
(1) The Financial Services Commission may, if a penalty surcharge payer
fails to pay the penalty surcharge within the deadline, collect the additional charge, as prescribed by Presidential Decree, for
the period of time from
the date immediately following the deadline to the day immediately before
the date on which the penalty surcharge is paid. <Amended by Act No. 8863, Feb. 29. 2008>
(2) The Financial Services Commission may, if a penalty surcharge payer
fails to pay the penalty surcharge within the deadline, demand him/her to pay it within a fixed period of time and
may collect it in the same
manner as delinquent national taxes are collected, if the payer fails again
to pay the penal surcharge and the additional charge under paragraph
47
(1) within the fixed period of time. <Amended by Act No. 8863, Feb. 29. 2008>
(3) The Financial Services Commission may entrust the Commissioner of the National Tax Service with the collection of
penalty surcharges and
additional charges or with the collection in the same manner as delinquent national taxes under paragraphs (1) and (2). <Amended by Act No. 8863, Feb.
29. 2008>
(4) Other necessary matters concerning the collection of penalty surcharges shall be prescribed by Presidential Decree.
[This Article Newly Inserted by Act No. 8522, Jul. 19, 2007]
Article 38-8 (Charge for Compelling Compliance)
(1) The Financial Services Commission may, if a person who has been
ordered to dispose of shares under Article 10-6 (4) or (8) fails to comply
with the order within the prescribed period, impose a charge for compelling the compliance on such person within the limit not exceeding
the amount
obtained by multiplying the book value of the shares which shall be disposed
of by 3/10,000 for each day of default.
(2) The charge for compelling compliance shall be imposed for the period ranging from the day immediately following the final date
of the compliance
period as set in the order for disposal of stocks to the day the person concerned actually disposes of the stocks (referring
to the day of delivering
the stock certificates).
(3) In collecting a charge for compelling compliance, the Financial Services
Commission may, if the compliance is not made even after 90 days from the final date of the compliance period as set in the
order for disposal
of stocks, collect the charge for compelling compliance on the basis of each 90th day calculated from such final date.
(4) The provisions of Articles 38-3 through 38-7 shall apply mutatis
mutandis to the imposition and collection of a charge for compelling
compliance.
[This Article Newly Inserted by Act No. 10175, Mar. 22, 2010]
CHAPTER Ⅵ PENAL PROVISIONS
Article 39 (Penal Provisions)
(1) Any person who falls under any of the following subparagraphs shall
be sentenced to imprisonment for not less than one year but not more
than ten years or by a fine of not less than ten million won but not more
48
than 100 million won:
1. Any person who makes a feigned payment of capital of a mutual savings bank, or who responds to such a feigned payment, or
who arranges
such a feigned payment;
2. A promoter, an executive, an administrator, a liquidator, a manager, or an employee to whom a certain type of business or
a specific business
affair of a mutual savings bank has been delegated, who has acquired an interest in an asset or aided and abetted a third party
to acquire
an interest by an act committed in breach of his/her duty, thereby
inflicting damage or loss on the bank.
(2) Any person who falls under any of the following subparagraphs shall be sentenced to imprisonment for not more than five
years or by a fine
not exceeding 50 million won:
1. Any person who carries out business activities without obtaining a license in violation of Article 6 (1);
2. A large shareholder or a specially related person of a large shareholder who commits an act as defined in any subparagraph
of Article 12-3
in violation of the said Article;
3. Any person who violates Article 37 (1) or (2) and the large shareholder, etc. who receives credit extension or a provisional
payment from such
person.
(3) Any person who divulges any confidential information about the identity, etc. of a reporter, etc. in violation
of Article 23-3 (2) shall be
sentenced to imprisonment for not more than three years or by a fine
not exceeding 30 million won.
(4) Any person who falls under any of the following subparagraphs shall be sentenced to imprisonment for not more than one
year or by a fine
not exceeding ten million won:
1. Any person who establishes a branch office or similar in violation of
Article 7 (1) or (2);
2. Any person who fails to perform his/her duties in relation to the use, etc. of designation in violation of Article 9;
3. Any person who conducts an act as stipulated in any subparagraph
of Article 10 (1) without obtaining a license, in violation of Article
10;
4. Any person who fails to obtain an approval or apply for an approval
49
in violation of Article 10-6 (1) or (2);
5. Any person who fails to comply with an order to dispose of stocks under Article 10-6 (4) or (8);
6. Any person who violates any provision of Article 12 (1) through (3)
or (5);
7. Any person who conducts an act falling under any subparagraph of
Article 18-2, in violation of the same Article;
8. Any person who rejects, interferes with, or evades the business administration under Article 24-3 (1);
9. Any person who rejects, interferes with, or evades the transfer of business affairs to the administrator appointed
pursuant to Article
24-3 (1);
10. Any person who makes a payment, performs his/her duty, or transfers shares in violation of Article 24-4 (1);
11. Any person who fails to follow a decision on transfer of contracts after
receiving a request for the transfer of contracts under Article 24-11 (1) or 24-15 (2).
(5) Any person who falls under any of the following subparagraphs shall
be punishable by imprisonment for not more than six months or by a fine not exceeding five million won:
1. Any person who fails to retain assets for reserve in violation of Article
15;
2. Any person who borrows loans in violation of Article 17;
3. Any person who fails to accumulate reserves or uses reserves in violation
of Article 19.
(5) The punishments by imprisonment and fines under paragraphs (1)
through (4) may be imposed concurrently.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 39-2 (Joint Penal Provisions)
If a representative of a corporation, or an agent, employee or other servant
of the corporation or an individual commits an offense under Article 39 in connection with the business of the corporation
or the individual, not
only shall such offender be punished accordingly, but the corporation or
individual shall also be punished by a fine under the said Article: Provided,
That where such corporation or individual has not been negligent in giving due attention and supervision concerning the relevant
duties to prevent
50
such violation, this shall not apply.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 40 (Fines for Negligence)
(1) Any person who treats a reporter, etc. unfairly in violation of Article
23-3 (3) shall be punishable by a fine for negligence not exceeding 30 million won:
(2) Any person who falls under any of the following subparagraphs shall be punishable by a fine not exceeding five million
won:
1. Any person who violates Article 10-2 (1) or (3);
2. A mutual savings bank that fails to refer the case to its board of directors for resolution in violation of Article 12-2 (1);
3. A mutual savings bank that fails to submit a report to the Financial
Services Commission or fails to make a disclosure to the public in violation of Article 12-2 (2) or (3);
4. Any person who violates an order issued pursuant to Article 22 (2)
(including cases as applicable mutatis mutandis in Article 34 (2));
5. Any person who fails to comply with a demand of the Financial Services
Commission to submit data in accordance with the latter part of Article
10-6 (3) or Article 22-4 (1), or who submits a false data;
6. Any person who enacts or amends any terms and conditions or the standard terms and conditions without reporting
to the Financial
Services Commission in violation of Article 18-3 (1) or (4), or any person who fails to comply with an order issued
under Article 18-3
(6);
7. Any person who violates a measure taken under Article 22-4 (2);
8. Any person who fails to submit a report in accordance with Article
22-5 or who submits a false report;
9. Any person who rejects, interferes with, or evades an inspection under
Article 23 (1);
10. Any person who fails to submit data or make an appearance to make
a statement in accordance with Article 23 (2) (including cases as applicable mutatis mutandis in Article 34 (2)) or who submits false
data or makes a false statement;
11. Any person who fails to make a disclosure or notice to the public in accordance with Article 23-2, 24-3 (5) (including
cases as applicable
mutatis mutandis in Article 24-8 (4)), or 24-12 (2) or who makes
51
a false disclosure or notice;
12. Any person who fails to comply with a demand or order under Article
24 (1) 1 through 4;
13. Any person who fails to follow the business guidance under Article
24-2 (1);
14. Any person who violates Article 25-2 (2) or 25-3 (2);
15. Any person who fails to comply with a demand under subparagraph
1 of Article 29;
16. Any person who fails to submit a report in accordance with Article
34-2 (4) or 35 (3) or who submits a false report.
(2) Fines for negligence under paragraphs (1) and (2) shall be imposed and collected by the Financial Services Commission,
as prescribed by
Presidential Decree.
[This Article WhollyAmended by Act No. 10175, Mar. 22, 2010]
Article 41 Deleted. <by Act No. 5501, Jan. 13, 1998>
ADDENDA
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation: Provided,
That Article 32 (2) shall enter into force on the day set separately by
Presidential Decree.
Article 2 (Transitional Measures)
(1) Any person who engages in the business under Article 11 or any similar business as of the enforcement date of this Act
shall file a report with
the Minister of Finance within 30 days from the date this Act enters into force, as prescribed by Presidential Decree.
(2) Any person who has filed a report in accordance with the foregoing
paragraph and who intends to continue the business shall file an application for the license under Article 6 within 90 days from
the date this Act enters
into force. In such cases, the capital shall be the amount specified by
Presidential Decree, notwithstanding Article 5, but shall be increased to the amount equivalent to or more than
that under Article 5 within
one year from the end of the time period for such application.
(3) Any person who has filed the report under paragraph (1) may continue his/her existing business until the end of the time period
for the application
52
under the foregoing paragraph: Provided, That if the term of any contract
already made exceeds the end of the time period for the application, he/she may continue his/her business until the expiration
of the contract term
only for the settlement of the contract, notwithstanding Article 6.
(4) The Minister of Finance may, if necessary, order a person who engages in a business in accordance with the foregoing paragraph
to submit a report
on the current status of his/her business and assets in accordance with
Article 23, assign a public official under his/her control to conduct an inspection thereon, or issue an order as may
be necessary for supervision
over the business.
(5) Any person who has a branch office as of the date this Act enters into force shall be eligible for the
license under paragraph (2),
notwithstanding Article 4. In such cases, the person who has obtained such a license may continue operation of the
branch office only for two
years from the end of the time period for the application under the said
paragraph.
ADDENDA <Act No. 2779, Jul. 25, 1975>
(1) (Enforcement Date) This Act shall enter into force on the date of its promulgation: Provided, That Article 32 (4) 1 shall enter into force on the day set separately by Presidential Decree.
(2) (Transitional Measures) A mutual credit union that has received mutual aid deposits and installment savings in excess
of the limit under Article
13 as of the enforcement date of this Act shall take measures necessary to adjust the level of such deposits and savings
to the limit by no later
than December 31, 1976.
(3) (Idem) The funds raised as of the date this Act enters into force shall
be deemed to be funds under the provisions of this Act.
(4) (Idem) A mutual credit union that has any executive disqualified under
Article 35-2 as of the date this Act enters into force shall replace such a person with a person qualified under the said
Article no later than December
31, 1976.
ADDENDA <Act No. 4867, Jan. 5, 1995>
Article 1 (Enforcement Date)
53
This Act shall enter into force three months after the date of its promulgation.
Article 2 (Special Exception to Previous Mutual Credit Unions
Incorporated as under General Partnership)
Mutual credit unions incorporated as a general partnership or limited partnership as of the date this Act shall be governed
by the former provisions
for purposes of applying Article 3, 5 (3), 20 (2), or 37-3 (3) to them,
and the terms “stocks” and “stockholders” shall be construed as “investment certificates” and “partners”respectively
for purposes of applying Article
10-2 (3) or (4) 1, 24-4 (1), or 24-15 (1), subparagraph 8 of Article 35-2,
subparagraph 1 of Article 37, Article 37-3 (1) or (3), or Article 39 (3)
10, while the term “general meeting of stockholders” shall be construed as “general meeting of partners”for purposes
of applying Article 23-11
(2) or (3). <Amended by Act No. 6429, Mar. 28, 2001>
Article 3 (Transitional Measures Concerning Capital)
(1) A mutual credit union that fails to meet the standards for capital under the amended provision of Article 5 (1)
as of the enforcement date of this Act shall make endeavor to meet the standards under the amended
provisions of the said paragraph of the said Article within seven years
from the date this Act enters into force (or within the period of time set in a plan for increasing the capital, in
cases where it fails to increase
the capital within seven years, but obtains approval of the Financial
Supervisory Commission on the plan). <Amended by Act No. 5501, Jan. 13, 1998; Act No. 6203, Jan. 28, 2000> [Effective on Jan. 28, 2000]
(2) The increase of the capital of a branch office established as of the
date this Act enters into force shall be governed by the former provisions.
Article 4 (Transitional Measures Concerning Transformation into Stock
Company)
In cases where a mutual credit union is established in order to transform a mutual credit union incorporated as a general partnership
or a limited partnership as of the date this Act enters into force establishes into a
stock company, such a mutual credit union shall be governed by the former
provisions in applying Article 5 (1), but shall, upon the completion of the transformation, make efforts to meet
the requirements under the
amended provisions of Article 5 (1) within the period of time set in Article
3 of Addenda, while the provisions relevant to the contribution relating
54
to the business license under Article 5 (2) of the Credit Management Fund
Act shall not be applicable.
Article 5 (Transitional Measures Concerning Liquidation)
A mutual credit union under the liquidation proceedings as of the date this Act enters into force shall be deemed
to be under the liquidation
proceedings under this Act.
Article 6 (Transitional Measures Concerning Penal Provisions)
An act committed before the date this Act enters into force shall be governed by previous relevant provisions in applying penal provisions.
Article 7 Omitted.
ADDENDA <Act No. 5050, Dec. 29, 1995>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
<Proviso Omitted.>
Article 2 (Transitional Measures Concerning Dispositions)
An order to transfer contracts, a decision, or a disposition, including appointment of an administrator, issued or
made by the Minister of Finance and Economy pursuant to any provision of Articles 23-2 through 23-9
of the Mutual Credit Union Act as of the date this Act enters into force
shall be deemed to be an act done by the President with the authority delegated by the Minister of Finance and Economy
pursuant to this Act,
if a corresponding provision exists in this Act.
Articles 3 and 4 Omitted.
ADDENDA <Act No. 5501, Jan. 13, 1998>
Article 1 (Enforcement Date)
This Act shall enter into force on April 1, 1998: Provided, That the amended
provisions of Article 5 of Addenda shall enter into force on the date of its promulgation; the amended provisions of Articles
25 through 25-6 and
25-8 through 34 on the day on which the Federation is formed; the amended provisions of Article 38 on January 1, 1998; and the
amended provisions
of Article 25-7 on July 1, 1998.
Article 2 (Repeal of Credit Management Fund Act)
The Credit Management Fund Act is hereby repealed.
55
Article 3 (General Transitional Measures)
(1) A license, permission, approval, registration, disposition, or any other act by the Minister of Finance and Economy, the
Director of the Financial
Supervisory Service of the Bank of Korea, the President of the Credit
Management Fund, the Federation Chairperson, an administrator, or a liquidator or with the power delegated by the
Minister of Finance and
Economy or vicariously on behalf of the Minister pursuant to a former provision of this Act or a provision of the
Credit Management Fund Act
as of the date this Act enters into force shall be deemed to be an act
by the Minister of Finance and Economy, the Financial Supervisory
Commission of the Governor of the Financial Supervisory Service, the
President of the Korea Deposit Insurance Corporation, the Federation
Chairperson, an administrator, or a liquidator pursuant to this Act, if a relevant provision exists in this Act.
(2) A report or an application filed, or any other act done with or done
against the Minister of Finance and Economy, the Director of the Financial
Supervisory Service of the Bank of Korea, the President of the Credit
Management Fund, the Federation Chairperson, an administrator, or a
liquidator pursuant to a former provision of this Act or a provision of the Credit Management Fund Act as of the date
this Act enters into force
shall be deemed to be an act done to or against the Minister of Finance
and Economy, the Financial Supervisory Commission of the Governor of the Financial Supervisory Service, the President
of the Korea Deposit
Insurance Corporation, the Federation Chairperson, an administrator,
or a liquidator pursuant to this Act.
Article 4 (Transitional Measures Concerning Penal Provisions)
In imposing a punishment, applying a penal provision, or imposing a fine for negligence on or to a person who has violated
former provisions of this Act or a provision of the Credit Management Fund Act before the
enforcement date of this Act, such violation shall be governed by the former
provisions or the relevant provision of the Credit Management Fund Act.
Article 5 (Transitional Measures Concerning Federation)
(1) The federation formed pursuant to the previous provision of Article
25 at the time when the Federation is formed shall be deemed to be the
Federation under this Act.
(2) The Federation Chairperson shall prepare a draft operating manual
56
and an amendment to the articles of incorporation of the Federation for the approval of the Minister of Finance and
Economy by no later than
the date this Act enters into force, and shall carry out the works necessary
for the registration of the amendment.
(3) The approval under paragraph (2) shall be deemed as an approval or authorization of the Financial
Supervisory Commission,
notwithstanding the amended provisions of Articles 25-2 (2) and 25-3 (2).
(4) Incumbent executives of the Federation at the time when the Federation
is formed shall be deemed to be executives of the Federation under this
Act, and their terms of office shall begin on the day on which they were appointed as executives of the Federation.
Article 6 (Special Exception to Continuance and Dissolution of Credit
Management Fund)
(1) The Credit Management Fund shall exist continuously until the
Financial Supervisory Service is established, notwithstanding Article 2 of Addenda.
(2) The Credit Management Fund shall be dissolved on the day on which the Financial Supervisory Service is established, without
necessarily going
through the procedures for dissolution and liquidation.
Article 7 (Transfer of Assets, Rights and Obligations)
(1) All assets, rights, and obligations of the Credit Management Fund
as of the date this Act enters into force shall be comprehensively transferred to each of the following persons on the date
this Act enters into force
according to the categories as classified below:
1. Those that belong to the business account for management of contributions shall be transferred to
The Korea Deposit Insurance
Corporation: Provided, That those that belong to the fund management
account shall be comprehensively transferred to the Financial Supervisory
Service on the day on which the Financial Supervisory Service is formed;
2. Those that belong to the business account for management of deposits shall be transferred to the Federation.
(2) The name of the Credit Management Fund recorded in the registers
and other public records of an asset, a right, or an obligation transferred pursuant to paragraph (1) shall be deemed to be the
name of the Financial
Supervisory Service, the Korea Deposit Insurance Corporation, or the
57
Federation to whom it is transferred.
(3) The value of an asset transferred pursuant to paragraph (2) shall be the book value as of the transfer.
Article 8 (Amendment to Framework Act on Fund Management)
The Framework Act on Fund Management is hereby amended as follows:
annexed Table 47 annexed is revoked.
Article 9 (Relationship with other Statutes)
A citation of the former Credit Management Fund Act or any provision
thereof by any other statute enforceable at the time when this Act enters into force shall be deemed to be a citation of this
Act or a corresponding
provision hereof in lieu of the former provision, if a corresponding provision
exists herein.
ADDENDA <Act No. 5507, Jan. 13, 1998>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Article 2 Omitted.
ADDENDA <Act No. 5738, Feb. 1, 1999>
(1) (Enforcement Date) This Act shall enter into force on the date of its promulgation.
(2) (Applicability for Executives of Federation) The amended provisions
of Article 25-4 shall apply to the executives of the Federation elected after the date this Act enters into force.
(3) (Transitional Measure Concerning Penal Provisions) In applying penal
provisions to or imposing fines for negligence for acts committed before the date this Act enters into force, former provisions
shall apply to such acts.
ADDENDA <Act No. 5982, May 24, 1999>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation. <Proviso
Omitted.>
Articles 2 through 6 Omitted.
ADDENDA <Act No. 6203, Jan. 28, 2000>
58
(1) (Enforcement Date) This Act shall enter into force three months after the date of its promulgation: Provided, That Articles 25-10 and 36 (2) hereof and the amended provision of Article 3 (1) of Addenda of the Amendment
(Act No. 4867) to the Mutual Credit Union Act.
(2) (Transitional Measures Concerning Preparation of Internal Control
Standards) Each mutual credit union shall establish the internal control
standards under the amended provisions of Article 22-3 within six months after the date this Act enters into force.
(3) (Transitional Measures Concerning Changes in Restriction on
Qualification for Executives) If cases where a person who serves a mutual credit union as an executive as of the date this
Act enters into force falls
under any of the grounds for disqualification under the amended provisions
of Article 35-2 due to a cause or an event that arose before the date this
Act enters into force, previous relevant provisions shall apply to such person, notwithstanding the amended provisions.
(4) (Transitional Measures Concerning Penal Provisions and Fine for
Negligence) In applying penal provisions to or imposing fines for negligence for acts committed before the date this Act
enters into force, a relevant
previous provision shall apply to such a case.
ADDENDA <Act No. 6429, Mar. 28, 2001>
Article 1 (Enforcement Date)
This Act shall enter into force on the date set by Presidential Decree, which shall not be later than two years from the
date of its promulgation: Provided, That the amended provisions of Articles 10-2, 24-3, 37, and
39 (2) and (4) 6 shall enter into force on the date of its promulgation, and the amended provisions of Articles 10-3
through 10-5, subparagraph
1 of Article 18, and Article 22-3 (2) through (5) shall enter into force
three months after the date of its promulgation. In this case, the term
“mutual savings bank”shall be construed as “mutual credit union.”
Article 2 (Transitional Measures Concerning Change of Name of Mutual
Credit Union)
Any person who holds a license granted for a mutual credit union pursuant to former provisions as of the date this Act enters into
force shall be deemed
to hold a license for a mutual savings bank under the amended provisions
59
of Article 6 (1).
Article 3 (Transitional Measures Concerning Change of Name of
Federation of Mutual Credit Unions)
(1) The Federation of Mutual Credit Unions existing as of the date this Act enters into force shall be deemed the
Korea Federation of Savings Banks under this Act.
(2) The name of the Federation of Mutual Credit Unions indicated in
the registers and other public records in relation to the property of the
Federation of Mutual Credit Unions existing as at the date this Act enters into force shall be deemed the name of the Korea
Federation of Savings
Banks under this Act.
Article 4 (Transitional Measures Concerning Capital)
The mutual savings banks that fail to meet the standards for capital under the amended provisions of Article 5 (1) as of
the date this Act enters into force shall make efforts to meet the standards under the amended
provisions within five years from the date this Act enters into force.
Article 5 (Transitional Measures Concerning Change of Time Limit for
Reporting Acquisition of Stocks)
As to the time limit for reporting the acquisition of stocks, relevant former provisions shall be applicable until ten days
after the date the amended
provisions of Article 10-2 enter into force, notwithstanding the amended provisions of the said Article.
Article 6 (Transitional Measures Concerning Appointment of Outside
Directors)
A mutual savings bank that shall appoint outside directors in accordance with the amended provisions of Article 10-3 shall
appoint such outside
directors at the annual general meeting of shareholders convened first
after the date this Act enters into force in accordance with the said amended provisions. In this case, a person appointed as an
outside director at the
annual general meeting of shareholders shall be deemed to have been
recommended by the committee for recommendation of candidates for outside directors in accordance with the amended
provisions of Article
10-3 (3).
Article 7 (Transitional Measures Concerning Establishment of Audit
Committee)
A mutual savings bank who shall have an audit committee in accordance
60
with the amended provisions of Article 10-4 shall take measures to have the audit committee under the amended provisions organized
at the annual
general meeting of shareholders convened first after the date this Act
enters into force.
Article 8 (Transitional Measures Concerning Standing Auditor Following
Establishment of Audit Committee)
If a person who currently serves a mutual savings bank, which shall have an audit committee in accordance with the amended provisions
of Article
10-4, as a standing auditor (or the standing auditor nominated in advance by the board of directors of the bank, if there
are two or more standing
auditors) as of the date this Act enters into force, and whose term of office has not expired as of the date of opening
the annual general meeting
of shareholders at which the audit committee shall be organized in
accordance with Article 5 of Addenda, is not dismissed at the annual general meeting of shareholders, such person
shall be deemed as a
non-outside-director member of the audit committee of the bank until
his/her term of office expires. In such cases, the standing auditor shall be deemed as a director appointed at the general
meeting of shareholders
in accordance with Article 382 (1) of the Commercial Act until the expiration
of his/her term of office.
Article 9 (Transitional Measures Concerning Appointment of Compliance
Officers)
Each mutual savings bank that shall appoint a compliance officer in accordance with the amended provision of Article
22-3 (2) shall appoint such a compliance officer within three months after the date this Act enters
into force.
Article 10 Omitted.
Article 11 (Relationship with other Statutes)
A citation of the former Mutual Credit Unions Act, a mutual credit union,
or the Federation of Mutual Credit Unions by any other statute enforceable
at the time when this Act enters into force shall be deemed to be a citation of the Mutual Savings Banks Act, a mutual savings bank, or the Korea
Federation of Savings Banks in lieu of the Act, the union, or the federation.
ADDENDA <Act No. 6561, Dec. 31, 2001>
Article 1 (Enforcement Date)
61
This Act shall enter into force on the date of its promulgation.
Article 2 Omitted.
ADDENDA <Act No. 6992, Dec. 11, 2003>
(1) (Enforcement Date) This Act shall enter into force three months after the date of its promulgation.
(2) (Transitional Measures Concerning Matters subject to Approval) A case
reported in accordance with the former provisions of Article 10-2 (3) 1 as of the date this Act enters into force shall be
deemed to have been approved
pursuant to this Act.
(3) (Transitional Measures Concerning Limit on Loans Lent to Identical
Borrowers) A mutual savings bank that has extended credit in excess of the limit under the amended provision of Article
12 (2) as of the date this
Act enters into force shall make efforts to meet the limit under the amended provisions within one year from the date this Act
enters into force.
ADDENDA <Act No. 7428, Mar. 31, 2005>
Article 1 (Enforcement Date)
This Act shall enter into force one year after the date of its promulgation.
Articles 2 through 6 Omitted.
ADDENDUM <Act No. 8143, Dec. 30, 2006>
This Act shall enter into force on the date of its promulgation.
ADDENDA <Act No. 8522, Jul. 19, 2007>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation.
Article 2 (Applicability for Imposition of Penalty Surcharge)
The amended provisions of Article 38-2 shall apply to mutual savings banks that extend credit in violation of Article 12 or 37 on or after the enforcement date of this Act.
Article 3 (Transitional Measures Concerning Restriction on Transactions
with Large Shareholders)
(1) A mutual savings bank that has extended credit, which falls under the amended provisions of subparagraph 4-3 of Article 2, to an investor
62
(including his/her relatives and specially related persons under Article
37 (1) 3) or a person who falls within the category of large shareholder pursuant to the amended provisions of subparagraph
8 of Article 2
(including his/her specially related persons) shall endeavor to meet the requirements under the amended provisions of
Article 37 within one year
from the date this Act enters into force.
(2) If there are unavoidable circumstances due to the amount of credit extended, a mutual savings bank may, notwithstanding
paragraph (1),
extend the term of such credit, subject to prior approval of the Financial
Services Commission. <Amended by Act No. 8863, Feb. 29. 2008>
(3) A mutual savings bank that desires to obtain the approval under paragraph (2) shall submit to the Financial Services
Commission a detailed
plan for compliance with the amended provisions of Article 37 no later than three months before the expiration of the
term under paragraph (1),
and the Financial Services Commission shall, in turn, make a decision
as whether to approve the plan and notify the bank of its decision within one month from the day on which the plan is submitted.
<Amended by Act
No. 8863, Feb. 29. 2008>
Article 4 (Transitional Measures Concerning Members of Audit
Committee)
A mutual savings bank that shall appoint members of the audit committee in accordance with the amended provisions of Article
10-4 shall appoint
such members of the audit committee in compliance with the amended provisions at an annual general meeting of shareholders
convened first
after the date this Act enters into force.
ADDENDA <Act No. 8635, Aug. 3, 2007>
Article 1 (Enforcement Date)
This Act shall enter into force one year and six months after the date of its promulgation. <Proviso Omitted.>
Articles 2 through 44 Omitted.
ADDENDA <Act No. 8852, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force one year and six months after the date
63
of its promulgation: Provided, That ... <omitted> ... the amended part
of an Act, which was promulgated before the date this Act enters into force, but is hereby amended before the date
such Act enters into force
has not yet arrived, shall enter into force on the date such Act enters into force.
Articles 2 through 7 Omitted.
ADDENDA <Act No. 8863, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Act shall enter into force on the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDA <Act No. 10175, Mar. 22, 2010>
Article 1 (Enforcement Date)
This Act shall enter into force six months after the date of its promulgation: Provided, That the amended provisions of Article 22-2 (1) 5 shall enter into force on July 1, 2010.
Article 2 (Applicability for Persons who Become Large Shareholders Due to Inheritance, etc. Following Death of Incumbent Shareholders)
The amended provisions of Article 10-6 (2) shall apply to shareholders who make acquisition, etc. of stocks due to
inheritance, etc. following
the death of any incumbent shareholder on or after the enforcement date of this Act.
Article 3 (Applicability for Examination of Qualifications of Large
Shareholders)
The amended provisions of Article 10-6 (3) shall apply to shareholders of a mutual savings bank who obtain approval on or
after the enforcement
date of this Act and incumbent shareholders who fail to meet the
requirements for maintaining eligibility for a large shareholder on or after the enforcement date of this Act.
Article 4 (Applicability for Restrictions on Full-Time Officers' Holding
Concurrent Offices)
The amended provisions of Article 37-4 shall apply to full-time officers appointed on or after the enforcement date of this Act.
Article 5 (Transitional Measures Concerning Prohibited Activities for
64
Mutual Savings Banks)
(1) Any mutual savings bank which conducts an act falling under any of the amended provisions of subparagraphs 4 through
6 of Article 18-2
and Article 37 at the time this Act enters into force shall take measures to conform to such amended provisions within one year
from the enforcement
date of this Act.
(2) Notwithstanding paragraph (1), any mutual savings bank may extend the period of time subject to the approval of
the Financial Services
Commission, if there are unavoidable circumstances due to the amount
of credit extended, etc.
(3) Any mutual savings bank seeking to obtain an approval under paragraph
(2) shall submit a detailed plan for conforming to the amended provisions
of subparagraphs 4 through 6 of Article 18-2 and Article 37 to the Financial
Services Commission by not later than three months before the expiration of the period of time under paragraph (1), and
the Financial Services
Commission shall decide whether to approve such detailed plan and notify the result within one month from the day of receipt of
such detailed plan.
Article 6 (Transitional Measures Concerning Terms and Conditions)
Terms and conditions and the standard terms and conditions of a mutual savings bank which are being used at the time this Act
enters into force
shall be deemed to have been reported to the Financial Services Commission
in accordance with the amended provisions of Article 18-3.
Article 7 (Transitional Measures Concerning General Meeting, etc. of the
Korea Federation of Savings Banks)
The Korea Federation of Savings Banks shall take measures to conform
to the amended provisions of Articles 25 (6) and 25-4 (1) by the date
of the first general meeting held after this Act enters into force.
Article 8 (Transitional Measures Concerning Disqualification, etc.)
(1) Where an executive or a compliance officer of any mutual savings
bank falls under the amended provisions of any subparagraph of Article
35-2 (1) or fails to meet the requirements of Article 22-3 (4) 2 at the time this Act enters into force due to
any ground which arose prior to
the enforcement of this Act, the previous provisions shall apply while
he/she is in active service, notwithstanding the amended provisions of
Article 35-2.
(2) In applying the amended provision of the proviso to Article 35-2 (2),
65
two years shall be applicable if the service period is not less than two years or not set.
Article 9 (Transitional Measures Concerning Penal Provisions and Fines
for Negligence)
The previous provisions shall apply when penal provisions and fines for negligence are applied with regard to acts done
before this Act enters
into force.
Article 10 Omitted.
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