Banking Act (Eunhaeng Beop)
The Banking Act (Eunhaeng Beop) governs the regulation and supervision of banking institutions in South Korea. Originally enacted in 1950, the Act establishes the licensing requirements for banks, the scope of banking activities, prudential regulation, and the supervisory powers of the Financial Services Commission and the Financial Supervisory Service. The Act has been amended to implement Basel Accords and strengthen financial stability.
Legal area: Law governing the regulation and supervision of banking institutions.
Year enacted: 1950
Full text: https://elaw.klri.re.kr/eng_service/law_view.do?hseq=south-korea-banking-act
Key Provisions
- Chapter I: General provisions (definition of banking)
- Chapter II: Licensing and registration (capital requirements, governance)
- Chapter III: Business conduct (deposit-taking, lending, investment)
- Chapter IV: Prudential regulation (capital adequacy, risk management)
- Chapter V: Supervision (inspections, corrective orders)
- Chapter VI: Deposit insurance and financial stability
Significance
The Banking Act is the primary regulatory framework for South Korea’s banking sector. South Korea’s banking system was significantly restructured following the 1997 Asian financial crisis. The Act has been amended to implement Basel III capital requirements and strengthen corporate governance. South Korea’s banking sector is concentrated, with a few large banks dominating the market. The Financial Services Commission exercises supervisory authority over all financial institutions.