Credit finance industry regulations revised in South Korea

[img_assist|nid=7998|title=|desc=|link=none|align=left|width=100|height=75]Starting from the second half of 2009 customers will be enabled to receive such financial products as funds, deposits and installment savings by means of debit cards.

In addition they will be able to pay their tax bills and insurance fees and invest in equity funds with a plastic card.
Besides financial institutions will be admitted to market stock funds and serve as a loan underwriter for households and corporations.

As of today rules on paying tax, utilities and insurance bills with credit, check or debit cards do not exist. Most customers settle such bills through an automatic wire transfer via bank accounts.

But in the near future the situation is apparently going to be altered. The Financial Services Commission (FSC), financial policymaking body, is determined to change its regulatory frameworks concerning credit finance from a current positive system to a negative system by revising rules governing the use of plastics for paying specific bills.

“We will make it clear as to which cards ? debit, credit or check ? consumers will be able to use to pay bills, ranging from public utilities to insurance. That is why we are trying to shift to a negative system,” said a FSC official.

In view of the fact that debit cards are more risk-protected rules revision will be directed to increase the usage of debit cards rather than credit cards for payment settlements.

And as it was already mentioned credit finance companies are to be allowed by FSC to provide equity funds to customers. “Only companies that fit the criteria under the Capital Market Consolidation Act can provide fund services,” states FSC.