South Korea's top financial regulator said Monday that it has launched a probe into SC First Bank, the local unit of British banking giant Standard Chartered Plc, on allegedly infringing domestic bank regulations by giving metal loans to corporate customers.
"Investigators were dispatched to SC First Bank and if we find (the bank) violated local regulations, we will summon the bank officials and determine the level of penalty," said an official at the Financial Supervisory Service.
A metal loan is a financing service in which a financial company supplies metal to a corporate client and pockets commission fees in return.
SC First Bank is alleged to have purchased a large amount of platinum to sell it to local companies, the official said.
South Korea's bank regulations ban financial companies from taking profits from any metal or natural resources except for bullion.
An official at SC First Bank declined to comment on the on-going probe. (Yonhap News)