Financial Services Commission "Thorough Supervision of Citi Bank's Gradual Phase-Out of Retail Banking"

Advance Notice of Measures... Decision on Activation at Regular Meeting on 27th

[Asia Economy Reporter Kim Jin-ho] The Financial Services Commission (FSC) announced on the 25th that it will conduct thorough supervision to protect financial consumers and maintain transaction order in relation to the Korea Citibank's decision to gradually phase out its retail banking operations.

On the 22nd, the FSC gave prior notice to Citibank that it may issue a corrective order under Article 49, Paragraph 1 of the Financial Consumer Protection Act. According to Article 49, Paragraph 1 of the Act, the FSC may order financial companies to take necessary corrective or suspension measures if deemed necessary to protect the rights and interests of financial consumers and maintain sound transaction order.

The FSC explained the background of the prior notice of the corrective order as follows: "There is a high likelihood that inconveniences to financial consumers and reduction of their rights and interests may occur when promoting the gradual reduction and phase-out of retail banking operations, and this is to prevent such issues."

The main content of the corrective order requires Citibank to faithfully prepare and implement plans to protect consumer rights and maintain transaction order during the gradual phase-out process of the retail banking sector, and to submit these plans to the Financial Supervisory Service Commissioner before initiating the phase-out procedures.

The corrective order includes detailed contents such as ▲basic principles ▲user protection measures by product and service ▲business channel operation plans ▲plans to prevent personal information leakage and financial accidents ▲internal organization, personnel, and internal controls.

Citibank announced on the same day that it held a board meeting on the 22nd and decided to gradually phase out its retail banking sector. The plan is to gradually reduce and phase out retail banking operations while continuing corporate banking operations.

The FSC plans to finalize and approve whether to activate the corrective order and its specific contents at the regular meeting on the 27th. An FSC official explained, "We are extensively gathering opinions from legal experts to review whether the gradual phase-out of Citibank's retail banking sector falls under the business closure approval subject under Article 55, Paragraph 1 of the Banking Act."