Non-financial firms in IT field can hold as much as 34% stake of internet-only banks starting Thurs.

인터넷은행법 17일 발효, 기대하는 효과는?Back in September, lawmakers passed a bill aimed at easing IT firms' ownership cap of internet-only banks.After Cabinet's approval last week, the law is set to go into effect starting Thursday.Our Ko Roon-hee talked to some experts on what this means for the South Korean economy. 'Internet-only banks' offer online banking and financial services...without requiring physical offices. And one of the two internet-only banks in Korea...is Kakao Bank operated by Kakao Corporation...best known for its ubiquitous mobile messenger service KakaoTalk. And starting Thursday, non-financial firms in the IT field will be able to hold as much as a 34-percent stake in these banks...up from the previous 4-percent cap, or 10-percent without voting rights.This means that Kakao Corporation can increase the amount of fund supply to its own bank in the near future...which will lead to the creation of more financial products and services. The new law comes after President Moon Jae-in pushed for vitalizing the internet-only bank industry...in order to promote innovative growth in the nation's economy. Experts say, the move will create a more competitive environment in the bank industry...and provide better services for the public."Korea's bank industry can be described as a market with limited competition...that is dominated by some major players. Limited competition could mean less benefits for consumers. With the vitalization of these banks, analysts forecast lower interest rates and easier loan procedures." But others are skeptical about the change."Under the new changes, Kakao will end up having the framework to make arbitrary decisions. We don't know whether this will turn out good or bad in the future, but I don't find this to be an optimistic picture."Despite the changes, Kakao Bank still needs to overcome some hurdles. For instance, the Financial Services Commission needs to approve the firm that wishes to hold more than 10-percent of the banks' shares.The approval process not only includes looking at financial records, but also records of any violation of the nation's Fair Trade Act. Ko Roon-hee, Arirang News.