Korean banks shut branches to the poor

If you are Korean and broke, go elsewhere is the message, as Kookmin and Shinhan close 164 regular branches in favour of bigger “wealth centres” catering to upmarket clients.

In terms of interest rates, major commercial banks are now also providing better interest rates to “wealthier” clients in a move to improve profitability. Woori Bank, through its Kiwi Savings Account, provides a 3.75 percent interest rate for clients with more than 50 million won in their accounts. For those with less than 10 million won on deposit, interest rate is at 3.45 percent. Meanwhile, SC First Bank applies a 2.5 percent interest rate for its My Dream Savings Account clients with more than 50 million won on deposit and 0.1 percent for those with less than 1 million won.

HSBC Korea, on the other hand, has increased from 1.6 percent to 2 percent the interest rate for deposits of more than 50 million won in the HSBC Direct Savings Account.

"It is hard to expect the banks to be very active in supporting the financially disadvantaged at the cost of their profit," said Park Deok-bae, a researcher at the Hyundai Economic Research Institute, in a report by The Korea Herald.