Korea rejects two web-only bank applicants

It cited lack of innovation and concerns over governance and financing.

In a surprise development, the Financial Services Commission (FSC) of Korea has rejected the bids of both Kiwoom Securities and Viva Republica to open web-only banks, reports The Korea Times. 

The regulator said that the proposal for the planned Kiwoom Bank was not 'economically viable and innovative' and raised concerns about governance and capital structures of Viva Republica's Toss Bank. 

"We will begin accepting additional applications in the third quarter of this year," FSC Chairman Choi Jong-ku told local media. 

Also read: Can South Korea's web-only banks break out of beginner's rut to ensure sustainability?

The development came even as Choi earlier hinted that the FSC could select up to two applicants to launch web-only banking services in the country, following K bank and kakaobank which both launched in 2017.  

In March, three consortia submitted applications for the internet banking licenses. Anyband Smart Bank was rejected in early May due to lack of documentary evidence to support its financial capability. 

If either of the two parties had been chosen, they could have officially launched the third internet bank in January 2020.