South Korea's financial authorities will resume their on-site inspection this week into the Tokyo branch of Kookmin Bank suspected of extending illegal loans and creating slush funds, industry sources said Sunday.

The Tokyo branch of South Korea's leading bank has been investigated over suspicions that it extended about 400 billion won ($376.9 million) worth of illegal loans to Japan-based firms to secure returns, some of which were later used to amass slush funds here in Korea.

The Financial Supervisory Service and its counterpart in Japan launched a joint inspection into the suspicions in mid-December, but it came to a halt after an official at the branch was found dead in what appeared to be a suicide.

"The investigative team of the FSS will leave for Japan this week," a source in the financial industry said on condition of anonymity. "The FSS will review the case in cooperation with Japan's Financial Services Agency based on the results of investigation conducted by Kookmin Bank itself," he added.

The FSS said that it plans to resume the inspection into the bank but denied to confirm its detailed timetable.

Meanwhile, the allegations surrounding Kookmin Bank prompted financial authorities to seek additional measures aimed at strengthening their oversight on foreign units of local commercial banks, separate sources said. As to when the measures will be announced is yet unclear.

"(With those measures), we intend to prevent such problems from happening again by constantly monitoring foreign units of banks for any excessive money flows related to loans," a source said. (Yonhap News)