South Korea to lower barriers into banking sector – regulator

South Korea’s financial regulator said on Wednesday it would lower barriers in the banking sector to stimulate competition.

The government will accept applications from domestic regional banks for an expansion of business into nationwide commercial banks and proactively consider new approvals if accompanied by sufficient financial resources and feasible business plans, said Kim Joo-hyun, chairman of the Financial Services Commission.

“It will mark a new entry into the commercial bank sector for the first time in more than 30 years, which will bring about a meaning change in the competition,” Kim said at a meeting with major financial groups.

DGB Financial Group’s Daegu Bank is one that is pursuing entry to the commercial banking sector, according to media reports.

The sector is made up of several financial firms, including Woori Financial Group, Hana Financial Group, KB Financial Group and Shinhan Financial Group.

The government will also consider bringing in more online lenders, in addition to existing Kakaobank and Kbank, Kim said.

The plan comes four months after President Yoon Suk Yeol called for measures to boost competition in the sector to help curb soaring costs for vulnerable people.

The Korea Exchange Bank Equity Index fell about 1% on Wednesday, compared with the broader market’s 0.4% loss.