The FSC granted preliminary approval on November 29 to two consortiums – one led by Kakao and the other by KT Corp. – out of three bidders to set up internet-only banks under its plan announced on June 19, 2015.

Under the current Banking Act, the FSC gave out the preliminary licenses for internet-only banks on two conditions: 1) the two consortiums shall operate banking business in the form of electronic financial transaction business ; and 2) they shall meet qualifications to run banking business such as manpower, organization and electronic facilities before applying for final licenses.

The final approval will be granted after a review of relevant regulations upon their applications. The two banks – Kakao Bank and K-Bank – shall start business operation no later than 6 months after they receive the final approval.

As a revision bill on the Banking Act was proposed to ease regulations on minimum equity capital and ownership in Internet-only banks, the FSC will additionally grant license for internet-only bank in accordance with the revised Act after the revision is finally passed the National Assembly.

* Please refer to the attached PDF for details.