The Industrial Bank of Korea union announced a large-scale protest involving more than half of the employees at the main office next week. The Industrial Bank of Korea is currently under scrutiny from financial authorities due to the discovery of unfair loans amounting to 88.2 billion won. The company has proposed internal reforms, but employees have expressed dissatisfaction, stating, 'The executives caused the problems, but no one is taking responsibility. The proposal only increases the responsibility of employees regarding loan issues by requiring all future loans to have staff signatures.'
According to the financial industry on the 8th, the Industrial Bank of Korea union has decided to hold a resolution rally on the 16th at 11:30 a.m. in front of the Industrial Bank of Korea headquarters in Euljiro, Seoul. Attendance will include all union leaders from the headquarters and more than half of the members from each department at the main office. The main focus of this protest is opposing the resignation of those responsible for the unfair loan scandal and the internal reforms that shift responsibility onto employees. The union stated that they will fight against the management that caused the unfair loans and hastily devised the reforms.
After the discovery of unfair loans amounting to 80 billion won, Kim Sung-tae, the president of the Industrial Bank of Korea, unveiled their internal reform plan known as the 'IBK Reform Plan' on the 26th of last month. Key points include: ▲ Establishing a database of employees' relatives to prevent conflicts of interest, ▲ Requiring staff and examiners to draft confirmation letters to prevent unfair loans for each loan, and ▲ Creating an auditing organization to separate operational and examination tasks.
To implement the reform plan, the IBK Reform Committee held its first meeting on the 1st, starting discussions on the direction of business processes, internal controls, and organizational culture reform. However, employees are criticizing the reform plan as merely superficial. Notably, the most criticized aspect of the reform plan is the creation of a database of employees' relatives and the requirement for staff responsible for each loan to submit confirmation letters to prevent unfair loans.
In the future, all loans will require verification and signatures from branch employees. This means that decisions about loans going to relatives of upper management will be made by branch staff who have no knowledge of the relationship. Even if there were no procedural issues at the time of verification, employees are concerned that if problems arise related to relatives or unfair loans, ultimately, the branch staff who approved the loans will bear the responsibility. The recent unfair loans at the Industrial Bank of Korea were caused by executives at the branch manager level or above.
There are responses indicating that the relatives' database is effectively useless. In the past, the Industrial Bank of Korea experienced a self-loan financial scandal amounting to 7.6 billion won and attempted to create a similar system but concluded that due to personal information protection laws, it could not use personal information without prior consent. In other words, if a database is created, consent from all individuals listed in the database would be required, but the scope of 'relatives' is unclear, and it's uncertain how many would agree to this. Since there is no reliable way to identify individuals who are not direct family members, employees view the relatives' database as unrealistic.
Regarding unfair loans, the Industrial Bank of Korea is currently under inspection by the Financial Supervisory Service (FSS). The FSS plans to send an inspection opinion letter by April and may begin sending letters for some individual unfair loan cases that have been completed. Once the FSS sends the inspection opinion letter, the Industrial Bank of Korea must submit a response based on the inspection's findings within 2 to 3 weeks. Subsequently, the FSS will create a sanctions proposal, which will be finalized after approval by the Sanctions Review Committee, the Securities and Futures Commission, and the Financial Services Commission.