Elderly Trust Contract Procedures Inadequate and Debt Information Inaccurate... Daegu Bank Caught by Financial Supervisory Service

No Recording of Trust Contract Process for Those Over 70
Arbitrary Release of Guarantee Debt Without Extinction Reason

[Asia Economy Reporter Minwoo Lee] Daegu Bank was found by the Financial Supervisory Service (FSS) to have improperly recorded voice logs in trust contracts for equity-linked securities (ELS) involving customers aged 70 and above, as well as to have poorly managed debt guarantee information.

According to financial authorities on the 8th, the FSS conducted an inspection of Daegu Bank and discovered violations of the voice recording obligation during the ELS trust contract process, as well as breaches of the duty to maintain the accuracy and timeliness of credit information. As a result, a fine of 19 million KRW was imposed, and two voluntary follow-up actions were requested for the related employees.

It was revealed that Daegu Bank failed to record the contract process in some branches when concluding trust contracts to manage trust assets through ELS for general investors aged 70 and above.

Additionally, the management of customers' personal debt guarantee information registered with the Korea Credit Information Services was found to be inadequate. The FSS also pointed out that the bank did not maintain the accuracy and timeliness of credit information by arbitrarily releasing guaranteed debts without valid reasons for expiration.