Rationalization of Reporting System for Articles of Incorporation Changes... Mutual Savings Bank Act Amendment Passed at Cabinet Meeting

[Asia Economy Reporter Kangwook Cho] Specific standards for reportable matters under the Mutual Savings Banks Act, such as amendments to articles of incorporation or branch relocations, will be clearly stipulated in the law.

On the 7th, the Financial Services Commission announced that the amendment bill to the Mutual Savings Banks Act containing these provisions has passed the Cabinet meeting. Previously, a similar amendment bill was submitted to the 20th National Assembly but was automatically discarded due to the expiration of the Assembly's term.

The amendment aims to rationalize the reporting system for savings banks. The Mutual Savings Banks Act requires prior reporting to the Financial Services Commission for changes to the articles of incorporation of savings banks and the Korea Federation of Savings Banks, partial transfer of business operations, and relocation of headquarters or branches. However, it did not explicitly specify whether such reports require approval. Accordingly, the amendment clearly stipulates that all reports by savings banks and the Federation require approval.

Additionally, the amendment clarifies the legal basis for provisions in subordinate regulations. The current law only states that dissolution of savings banks and the abolition, transfer, or acquisition of all business operations require approval, but it does not provide delegation provisions allowing detailed approval criteria to be set in subordinate legislation. Therefore, the amendment explicitly establishes the legal basis for the President's Decree to specify necessary details regarding approval criteria for dissolution, mergers, and other matters.

The amendment also includes provisions for the President's Decree to define minor changes to articles of incorporation or types and methods of business that are excluded from the reporting requirements for savings banks.

The Financial Services Commission stated that if the amendment passes the National Assembly, improvements related to the rationalization of the reporting system, which require immediate application for proactive administration, will be implemented from the date the amendment is promulgated. Other matters will be implemented six months after promulgation, considering the schedule for revising subordinate laws such as enforcement decrees.