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Business conglomerates will be permitted to own stakes in banks through private equity funds and pension funds beginning next year, according to a revision of the Bank Act and the Bank Holding Company Act the Financial Services Commission announced Monday.
The revision bills envisage allowing non-banking businesses to own up to a 10 percent stake in a bank. Currently, industrial capital from non-banking businesses cannot hold more than a 4 percent stake in a bank.
If the bills are approved by the National Assembly, conglomerate groups will be able to take part in the privatization of state-owned banks such as the Korea Development Bank, Woori Financial Group and the Industrial Bank of Korea.
Some 60 public and pension funds including the National Pension Fund that are currently classified as industrial capital will be defined as financial capital without bank ownership restrictions. Even private equity funds with a ratio of corporate ownership of less than 30 percent will be regarded as financial capital.
To allow securities and insurance conglomerates to become financial groups, the government will revise the financial holding company system so non-banking holding companies can maintain non-financial companies as subsidiaries. Chaebol such as Samsung, Hanwha, Hungkuk and Dongbu, which own financial companies, will be able to turn them into financial holding companies, while maintaining their existing subsidiaries.
An FSC official said if the current bank ownership rules were left intact, ¡°all state-owned banks subject to privatization would inevitably go to foreign investors.¡± He pledged to minimize side effects by stepping up supervision of large shareholders when lifting the restrictions.
Opposition parties and civic groups oppose the revision, which they regard as an attempt to hand banks over to the big business groups.
(englishnews@chosun.com )
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