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Financial authorities are set to launch an inspection into the National Agricultural Cooperative Federation and Nonghyup Bank over frequent online transaction system breakdowns and irregular lending practices.
“We plan to begin a comprehensive check-up on Nonghyup Bank within May. The inspection will take more than a month,” an official at the Financial Supervisory Service said, suggesting the high intensity of the examination.
Nonghyup Bank’s cyber network broke down several times after transaction records saved in a server were completely erased in April last year.
“We plan to closely look into the stability of the computerized systems of not just Nonghyup Bank but also the NACF (Nonghyup), and how much improvement they have made so far,” the official at the nation’s top financial regulator said.
Nonghyup Bank had vowed to provide 7.1 billion won ($6.2 million) in compensation for customers who couldn’t use its banking service due to the system breakdown in April last year, and spend 517.5 billion won to improve its IT operations.
But the bank’s system broke down again a month later, paralyzing its internet banking service, credit evaluation and loan business at branch counters. Clients were unable to make check card payments due to another glitch in the online network in December.
In addition to the computerized system, the FSS plans to scrutinize Nonghyup’s corporate governance and transparency of management.
The financial operations of Nonghyup spun off from the NACF as the Nonghyup Financial Group in early March. But the FSS believes there is a possibility the NACF, or Nonghyup, is still directly or indirectly interfering with the management of Nonghyup Financial. Nonghyup has long meddled with the management of Nonghyup Bank.
The FSS is also set to check into the appropriateness of Nonghyup Bank’s real estate project financing loans as the bank showed higher PF default rates and non-performing loan ratios compared to other banks.
The regulator is expected to look into Nonghyup Bank’s PF loans to the builder Poonglim, which recently filed for court receivership.
By Kim So-hyun (sophie@heraldcorp.com)
“We plan to begin a comprehensive check-up on Nonghyup Bank within May. The inspection will take more than a month,” an official at the Financial Supervisory Service said, suggesting the high intensity of the examination.
Nonghyup Bank’s cyber network broke down several times after transaction records saved in a server were completely erased in April last year.
“We plan to closely look into the stability of the computerized systems of not just Nonghyup Bank but also the NACF (Nonghyup), and how much improvement they have made so far,” the official at the nation’s top financial regulator said.
Nonghyup Bank had vowed to provide 7.1 billion won ($6.2 million) in compensation for customers who couldn’t use its banking service due to the system breakdown in April last year, and spend 517.5 billion won to improve its IT operations.
But the bank’s system broke down again a month later, paralyzing its internet banking service, credit evaluation and loan business at branch counters. Clients were unable to make check card payments due to another glitch in the online network in December.
In addition to the computerized system, the FSS plans to scrutinize Nonghyup’s corporate governance and transparency of management.
The financial operations of Nonghyup spun off from the NACF as the Nonghyup Financial Group in early March. But the FSS believes there is a possibility the NACF, or Nonghyup, is still directly or indirectly interfering with the management of Nonghyup Financial. Nonghyup has long meddled with the management of Nonghyup Bank.
The FSS is also set to check into the appropriateness of Nonghyup Bank’s real estate project financing loans as the bank showed higher PF default rates and non-performing loan ratios compared to other banks.
The regulator is expected to look into Nonghyup Bank’s PF loans to the builder Poonglim, which recently filed for court receivership.
By Kim So-hyun (sophie@heraldcorp.com)
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Articles by Korea Herald
