Aug. 20 (Bloomberg) -- South Korea plans to allow buyers of mutual savings banks to open branches outside the designated areas in a move to provide an incentive for acquiring such banks.
Buyers of insolvent mutual savings banks may open branches outside the areas they usually operate in once the banks make a turnaround, the Financial Services Commission said today in an e-mailed statement. The measure, expected to become effective after September, is aimed at promoting acquisitions of mutual savings banks which are more susceptible to bankruptcy, the agency said.
The government also plans to tighten monitoring of savings banks' project financing loans, raising the required amount of provisions to 25 percent of such loans by the end of 2009 from the current 10 percent, the agency said.
In a related move to help savings banks' operations, the government plans to seek parliamentary approval in November for allowing savings banks to sell mutual funds and provide advisory services on acquisitions, the agency said.
