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November 30, 2015updated 04 Apr 2017 12:48pm

Kakao, KT win preliminary license to start internet-only banks

Consortiums backed by South Korean Internet giant Kakao and telecom operator KT have secured a preliminary license from the Financial Services Commission (FSC) to launch the country's first internet-only banks.

Consortiums backed by South Korean Internet giant Kakao and telecom operator KT have secured a preliminary license from the Financial Services Commission (FSC) to launch the country’s first internet-only banks.

For the first time in 23 years a new business has been allowed to foray into the country’s banking sector.

The two internet-only banks, Kakao Bank and K Bank, have been granted licenses on the grounds that they operate banking business in the form of electronic financial transaction business, and comply with qualifications to operate banking business including manpower, organisation and electronic facilities prior to applying for final licenses, FSC said in a statement.

Kakao Bank shareholders include Korea Investment Holdings with a 50% stake, while Kakao and Kookmin Bank each hold a 10% stake.

Major shareholders of K bank include Woori Bank, GS Retail, Hanwha Life Insurance, and Danal, each holding a 10% stake, while KT owns a 8% stake.

The two banks are expected to begin operation six months after receiving the final nod.

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