[The Editors' Verdict] When Will Jangbaljang Bank Close Its Doors?

Over 50,000 Imprisoned for Unpaid Fines
10th Anniversary of Jangbaljang Bank, the Fine Loan Institution
"Day-Fine System to Be Reintroduced... Hoping to Close Soon"

Issue & Trend Team Leader

Mr. A, who has an intellectual disability, was fined 500,000 won after stealing a small item worth 2,000 won. However, he had no money to pay the fine. Mr. B, a man in his 30s, went without eating a single piece of meat for two months due to lack of money. He lost 17 kg in two months. Feeling like he might die and craving meat desperately, he stole canned ham from a supermarket. He was fined 3 million won for theft. Single mom Ms. C ordered food with her hungry child but couldn’t pay. With no one to take care of her child, she was imprisoned, leaving the child in an orphanage. They all sought help from one bank, paid their fines with the loans they received, and returned to society. Around us, many people head to prison because they cannot pay fines of tens or hundreds of thousands of won. According to the Human Rights Solidarity, the number of people imprisoned for unpaid fines (detained for conversion of fines to imprisonment) surged from 21,868 in 2021, to 25,975 in 2022, and to 57,267 in 2023. Although 2024 statistics are not yet available, Human Rights Solidarity expects the number to exceed 60,000.

‘Jangbaljang Bank’ was launched on February 25, 2015, led by Human Rights Solidarity. It was established to alleviate the suffering of modern-day Jean Valjeans who go to prison because they have no money. The bank’s motto is ‘no collateral,’ ‘no interest,’ and ‘human credit bank.’ The maximum loan amount is 3 million won with no interest. Borrowers can defer repayment for up to 3 months and repay in installments over one year. Over the past 10 years, it has loaned more than 2.5 billion won to 1,452 citizens. Last month, it loaned 17.86 million won to eight Jean Valjeans born between 1980 and 2004. The bank does not receive government or corporate support. So far, 17547 individuals, organizations, and churches have donated 1.8 billion won. The first bank president was Mr. Hong Se-hwa (who passed away last year). Mr. Hong actively promoted reform of the fine system itself and the introduction of a day-fine system, which would require fines to be proportional to property and income, similar to national pension or health insurance contributions. The reform of the fine system has shown some success. Since 2022, the scope of those eligible to replace unpaid fines with community service has expanded. Previously limited to low-income groups within 50% of median income, it has been extended to 70%. Vulnerable poverty groups can defer or pay fines in installments.

The remaining puzzle is the day-fine system. South Korea currently adopts a total fine system that sets the total fine amount within the statutory range. The day-fine system determines the fine amount based on a ‘certain period’ proportional to criminal responsibility and a ‘daily fixed amount’ according to the defendant’s specific economic capacity. It is a differentiated fine system implemented in Europe, where fines vary according to income and property. It was also a campaign pledge of former President Moon Jae-in and Lee Jae-myung, leader of the Democratic Party. Although related bills have been steadily proposed in the National Assembly, they have failed to pass due to opposition citing fairness issues of imposing different penalties for the same crime, difficulties in calculating property or income, and the possibility of judges’ arbitrary interpretation. Marking its 10th anniversary, Jangbaljang Bank will hold a policy forum on the 25th of this month jointly with the Democratic Party’s Human Rights Committee to start public discussion on the introduction of the day-fine system. Jangbaljang Bank’s goal from the start has been to close as soon as possible. If the day-fine system is introduced, it will achieve its goal and close, but considering reality, it is expected to operate for a considerable period.