Hanjung Mutual Savings Bank Shuts Down

On January 14, the Financial Supervisory Commission (FSC) ordered Hanjung Mutual Savings Bank (located in Yangpyeong-dong, Yeongdeungpo-gu, Seoul) to cease operations for six months. Bank employees are attempting to calm clients, who flocked to the bank upon hearing the news, by explaining the details of the Depositor Protection Act. Hanjung Bank will be unable to carry out such functions as receiving funds, issuing loans, conducting exchange transactions, and providing withdrawals from deposit accounts until July 13. In order to lessen the inconvenience this measure will cause for Hanjung’s clients, the Korea Deposit Insurance Corporation plans to make temporary payments of up to five million won per person. The FSC uncovered Hanjung’s embezzlement of 2.4 billion won, effected by classifying loans made out to suspended or closed businesses as regular loans and covering up their insolvency, and indicted the persons involved.

fuzine@donga.com