[Asia Economy Reporter Song Seung-seop] The Korea Citibank Labor Union demanded on the 22nd that the liquidation of the consumer finance division of the group company is subject to approval by the Financial Services Commission and that such approval should be granted only after strict and thorough examination.
In a press release issued that day, the union stated, “If the financial authorities approve the phased closure of Korea Citibank, it would be tantamount to neglecting the large-scale unemployment of employees caused by the sale and withdrawal, as well as the damage to financial consumers,” emphasizing that “this is an act of relinquishing South Korea’s financial sovereignty.”
This statement was in response to remarks made by Financial Services Commission Chairman Ko Seung-beom during the National Assembly’s Political Affairs Committee audit. Chairman Ko responded to a question on whether the phased closure of Korea Citibank requires approval from the Financial Services Commission by saying, “We are carefully reviewing whether the phased closure of the retail finance sector is subject to approval under the Banking Act.”
The union’s position is that since the financial authorities granted approval when HSBC withdrew from consumer finance or when Hana Bank partially closed some business operations, approval should also be required for Korea Citibank’s withdrawal from consumer finance. Furthermore, they argued that since the consumer finance division of Korea Citibank accounts for more than half of the bank’s total assets and personnel, it should be considered equivalent to the closure of the entire banking business.
A union official said, “Article 55 of the Banking Act stipulates that even in the case of ‘partial transfer of business,’ approval from the Financial Services Commission is required,” adding, “If partial transfer of business requires FSC approval, then ‘partial closure,’ which has significant ripple effects, naturally requires approval to protect consumers and maintain financial order.”
He continued, “After returning the banking business, approval must also be obtained for the foreign bank’s domestic branch (Citibank Seoul Branch), which also requires FSC approval,” and mentioned, “The operation must be converted to a foreign bank’s domestic branch after withdrawal, and if the domestic corporation is maintained, the labor union and civic groups plan to file complaints for preferential treatment.”
Meanwhile, Korea Citibank will hold a board meeting at 5 p.m. that day to discuss the domestic consumer finance exit strategy and voluntary retirement plans.
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