 |
Photo = Yonhap news |
[Alpha Biz= Paul Lee] The Financial Supervisory Service (FSS) is currently scrutinizing whether Shinhan Bank appropriately followed the reporting procedures related to improper loans and other financial incidents. Failure to report such incidents constitutes a violation of banking laws, and if confirmed, could lead to stringent penalties.
The FSS is concluding a regular inspection of Shinhan Financial Group and Shinhan Bank, which began earlier than scheduled due to the urgency of repeated improper loan cases emerging within the banking sector. This inspection, initially planned to start this month, was advanced to mid-April and is focused on overall management, including soundness, internal controls, and governance.
The probe follows revelations that a Shinhan Bank employee, who has been arrested on charges of accepting bribes worth over 100 million KRW in exchange for issuing improper loans, and the search of the bank’s Yeouido branch by prosecutors.
Earlier this year, Shinhan Bank also reported incidents involving employee embezzlement totaling approximately 1.7 billion KRW and fraud by external parties amounting to nearly 2 billion KRW.
The FSS is currently verifying whether Shinhan Bank properly reported these financial incidents to the regulator as required by law. According to banking regulations, financial institutions must promptly notify the FSS of any financial crime suspicions such as embezzlement or breach of trust and disclose such incidents publicly through official channels.
Failure to report financial incidents undermines the ongoing efforts by regulators and the banking industry to improve governance and internal control mechanisms.
The FSS has previously indicated that it views both the occurrence of financial incidents and failures in reporting or responding to them as serious regulatory breaches warranting strict measures.
Should the FSS find violations in Shinhan Bank’s reporting procedures, the agency plans to reflect this in the severity of the sanctions imposed.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
