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ENFORCEMENT DECREE OF THE MUTUAL SAVINGS BANKS ACT

Wholly Amended by Presidential Decree No. 15758, Apr. 1, 1998

Amended by Presidential Decree No. 16266, Apr. 30, 1999

Presidential Decree No. 16323, May 24, 1999

Presidential Decree No. 16709, Feb. 14, 2000

Presidential Decree No. 16859, jun. 27, 2000

Presidential Decree No. 17265, jun. 30, 2001

Presidential Decree No. 17405, Nov. 7, 2001

Presidential Decree No. 18146, Nov. 29, 2003

Presidential Decree No. 18297, Feb. 28, 2004

Presidential Decree No. 18305, Mar. 9, 2004

Presidential Decree No. 18736, Mar. 8, 2005

Presidential Decree No. 19464, May 3, 2006

Presidential Decree No. 20555, Jan. 18, 2008

Presidential Decree No. 20653, Feb. 29, 2008

Presidential Decree No. 20947, Jul. 29, 2008

Presidential Decree No. 21059, Sep. 30, 2008

Presidential Decree No. 21518, May 29, 2009

Presidential Decree No. 21765, Oct. 1, 2009

Presidential Decree No. 22248, jun. 30, 2010

Presidential Decree No. 22401, Sep. 20, 2010

Presidential Decree No. 22719, Mar. 22, 2011

Presidential Decree No. 23283, Nov. 1, 2011

Presidential Decree No. 23488, Jan. 6, 2012

Presidential Decree No. 23644, Feb. 29, 2012

Presidential Decree No. 23987, Jul. 24, 2012

Presidential Decree No. 24635, jun. 21, 2013

Presidential Decree No. 24697, Aug. 27, 2013

Presidential Decree No. 25050, Dec. 30, 2013

Presidential Decree No. 25178, Feb. 11, 2014

Presidential Decree No. 25532, Aug. 6, 2014

Presidential Decree No. 25844, Dec. 9, 2014

Presidential Decree No. 25945, Dec. 30, 2014

Presidential Decree No. 26205, Apr. 20, 2015

Presidential Decree No. 26600, Oct. 23, 2015

Presidential Decree No. 27037, Mar. 11, 2016

Presidential Decree No. 27091, Apr. 8, 2016

Presidential Decree No. 27205, May 31, 2016

Presidential Decree No. 27289, jun. 28, 2016

Presidential Decree No. 27414, Jul. 28, 2016

 Article 1 (Purpose)
The purpose of this Decree is to prescribe matters delegated by the Mutual Savings Banks Act and matters necessary for the enforcement thereof.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 2 Deleted. <by Presidential Decree No. 18305, Mar. 9, 2004>
 Article 3 (Equity Capital)
(1) "Standards prescribed by Presidential Decree" in subparagraph 4 of Article 2 of the Mutual Savings Banks Act (hereinafter referred to as the "Act") means the following standards:
1. Core capital shall be the real net assets of a mutual savings bank, such as capital and reserves, with a permanent nature;
2. Supplementary capital shall be the capital equivalent to the capital under subparagraph 1, such as subordinated bonds, and shall be able to compensate for losses incurred in engaging in business activities of a mutual savings bank;
3. Capital which does not substantially contribute to soundly maintaining the capital, such as treasury stocks held by the relevant mutual savings bank, shall be excluded from the core capital or supplementary capital;
4. Equity capital shall be calculated every six months and shall be applied for six months from the date on which two months pass after the date of calculation (hereafter referred to as "period for the application of equity capital" in this Article).
(2) Notwithstanding paragraph (1), any of the following shall be deemed the equity capital: <Amended by Presidential Decree No. 24635, Jun. 21, 2013; Presidential Decree No. 25178, Feb. 11, 2014; Presidential Decree No. 27289, Jun. 28, 2016>
1. Amounts determined by the Financial Services Commission, in consideration of the financial structure of the relevant mutual savings bank and the period for management normalization thereof, after seeking opinions from the Governor of the Financial Supervisory Service established under the Act on the Establishment, etc. of Financial Services Commission (hereinafter referred to as the "Governor of the Financial Supervisory Service"), with regard to any of the following mutual savings banks: Provided, That this shall be limited to where the amounts are bigger than the equity capital calculated in accordance with standards under paragraph (1):
(a) A mutual savings bank which promotes management normalization under Articles 24-2 through 24-12 of the Act;
(b) A mutual savings bank which has taken over a contract under Article 10 (1) 8 or 14 (2) of the Act on the Structural Improvement of the Financial Industry;
(c) A mutual savings bank (excluding where an existing large shareholder or a person in special relationship therewith under Article 4-2 (1) has been changed to the largest shareholder), the largest shareholder (including a shareholder who is a person in special relationship under Article 4-2 (1) with the largest shareholder; hereafter the same shall apply in this Article and Article 6-3) of which has been changed in order to normalize the management of a mutual savings bank falling under any subparagraph of Article 6-3 (3);
2. Amounts before the capital of a mutual savings bank is reduced if the equity capital has been reduced as the result of the settlement of the equity capital: Provided, That this shall not apply to cases governed by Articles 24 (2) 2, 24-2 through 24-12 of the Act, Article 10 (1) or 14 (2) of the Act on the Structural Improvement of the Financial Industry, or Article 6-3 (1) 1, 6-3 (7) 2, or 11-6 (1) 1 of this Decree.
(3) Amounts falling under the main sentence of paragraph (2) 2 shall be only applied to the next period for the application of the equity capital.
(4) Except as otherwise provided for in paragraphs (1) through (3), matters necessary for calculation of the equity capital shall be determined and publicly announced by the Financial Services Commission.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 3-2 (Scope of Deposits, etc. and Credit Extension)
(1) "Matters prescribed by Presidential Decree" in subparagraph 5 of Article 2 of the Act means liabilities arising from the issuance of a bill by a mutual savings bank when it issues bills in performing its duties under Article 11 (1) 16 of the Act. <Amended by Presidential Decree No. 25178, Feb. 11, 2014>
(2) "Matters prescribed by Presidential Decree" in the former part of subparagraph 6 of Article 2 of the Act means any of the following: Provided, That those corresponding to deposits, etc. under subparagraph 2 of Article 2 of the Depositor Protection Act shall be excluded: <Amended by Presidential Decree No. 25178, Feb. 11, 2014>
1. Purchase of corporate bonds (excluding those issued by public offering);
2. Purchase of a bill issued by a company (referring to bills issued by a company for the purpose of raising funds);
3. Guarantee under subparagraph 1 of Article 11-2;
4. Call loan [referring to the grant of a loan through transactions between financial institutions (referring to institutions that undergo the inspection of the Financial Supervisory Service under Article 38 of the Act on the Establishment, etc. of Financial Services Commission; hereinafter the same shall apply) for a short term within 30 days, and call loan transactions, in which transaction partners are not designated, shall be excluded, from among call loan transactions made through the Korea Federation of Savings Banks under Article 25 of the Act (hereinafter referred to as the "Federation")];
5. Installment financing (referring to installment financing prescribed in subparagraph 13 of Article 2 of the Specialized Credit Finance Business Act; hereinafter the same shall apply).
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 3-3 (Scope of Persons Sharing Credit Risks)
"Persons who share credit risks prescribed by Presidential Decree" in subparagraph 8 (b) of Article 2 of the Act means companies which belong to enterprise groups under subparagraph 2 of Article 2 of the Monopoly Regulation and Fair Trade Act (hereinafter referred to as "identical borrowers").
[This Article Newly Inserted by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 4 (Details of Management Guidance)
"Matters prescribed by Presidential Decree" in subparagraph 9 (c) of Article 2 of the Act means any of the following matters:
1. Matters concerning the correction of illegal or unlawful acts;
2. Matters concerning the formulation and implementation of management normalization plans;
3. Matters concerning the liquidation of non-performing assets and the acquisition or disposal of real estate;
4. Matters concerning the transfer or merger of business or stocks;
5. Matters concerning the filing of or responding to lawsuits, to which the relevant mutual savings bank is a party, with regard to matters falling under subparagraphs 1 through 4;
6. Other matters for the rationalization and efficiency of the management of the relevant mutual savings banks, such as cutting costs and risk control.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 4-2 (Scope, etc. of Persons in Special Relationship)
(1) "Person in special relationship prescribed by Presidential Decree" in subparagraph 11 (a) of Article 2 of the Act means any of the following persons (hereinafter referred to as a "person in special relationship"):
1. Persons falling under any of the following items, if the principal is a private individual:
(a) The spouse (including a person who is in an actual marital relationship; the same shall apply hereinafter);
(b) Paternal relatives not more distant than the sixth degree and wives of paternal relatives not more distant than the fourth degree;
(c) Husbands and offspring of paternal relatives not more distant than the third degree;
(d) Maternal relatives not more distant than the third degree and their spouses and offsprings;
(e) The spouse's paternal relatives not more distant than the second decree and their spouses;
(f) Natural parents and their lineal ascendants of an adopted child;
(g) Adopted children, their spouses, and ascendants and descendants in their natural and adoptive families;
(h) Natural mothers of those born out of wedlock;
(i) Persons whose livelihood is maintained by the principal's money or any other property or who live together with the principal;
(j) A juristic person, etc. and its executives where investment made by the principal alone or jointly with persons who are in a relationship under any of items (a) through (i) reaches or exceeds 30/100 of total investment in the juristic person or organization or the principal has de facto control over important matters concerning the business management of the juristic person or organization (hereinafter referred to as a "juristic person, etc."), such as the appointment or dismissal of executives;
(k) A juristic person, etc. and its executives where the investment made by the principal alone or jointly with persons who are in a relationship under any of items (a) through (j) reaches or exceeds 30/100 of total investment in the juristic person or organization or the principal has de facto control over important matters concerning the business management of the juristic person or organization, such as the appointment or dismissal of executives;
2. Persons falling under any of the following items, if the principal is a juristic person, etc.:
(a) Executives;
(b) Affiliate companies and their executives;
(c) A private individual or a person and organization that has a relationship under any item of subparagraph 1 with such an individual or organization (excluding the affiliate companies; hereafter the same shall apply in this subparagraph) and its executives if the investment made by the private individual alone or jointly with persons who are in a relationship under any item of subparagraph 1 reaches or exceeds 30/100 of total investment in the principal or the private individual has de facto control over important matters concerning the business management of the principal, such as the appointment or dismissal of executives;
(d) An organization and its executives if the investment made by the principal alone or jointly with persons who are in a relationship with the principal under any of items (a) through (c) reaches or exceeds 30/100 of total investment in the organization or the principal has de facto control over important matters concerning the business management of the organization, such as the appointment or dismissal of executives.
(2) "Person prescribed by Presidential Decree" in subparagraph 11 (b) of Article 2 of the Act means any of the following persons:
1. A shareholder who, alone or under an arrangement or agreement with other shareholders, has appointed a representative the director or a majority of directors;
2. A shareholder identified by the Financial Services Commission as one who has dominant control over decision-making on important matters, such as management strategy and organizational changes, or business execution.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 5 (Transfer of Headquarters, Branch Offices, etc.)
"Requirements prescribed by Presidential Decree" in the part other than subparagraphs of Article 5 (2) of the Act means requirements under the following classifications:
1. When a main office (hereinafter referred to as the "headquarters") is transferred: Requirements for capital stocks, which are applied to a region to which the headquarters is transferred pursuant to subparagraphs of Article 5 (1) of the Act, shall be satisfied:
2. When a branch office, etc. (referring to a branch office or similar under the main sentence of Article 7 (1) of the Act; hereinafter the same shall apply) is transferred: Requirements for increasing capital stocks, which are applied under Article 7 (3) of the Act, shall be satisfied.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 5-2 Deleted. <by Presidential Decree No. 22401, Sep. 20, 2010>
 Article 6 (Applications for Authorization for Business)
(1) A person who intends to apply for authorization of a mutual savings bank under Article 6 (2) of the Act shall submit an application form stating the following matters to the Financial Services Commission: <Amended by Presidential Decree No. 23283, Nov. 1, 2011>
1. Trade name;
2. Location of the headquarters;
3. Names, resident registration numbers, and addresses of the representative and executives;
4. Matters concerning the capital stocks;
5. Business areas prescribed in Article 4 (1) of the Act (hereinafter referred to as "business areas");
6. Matters concerning facilities, equipments, and human resources;
7. Business for which he/she intends to obtain authorization.
(2) The following documents shall be attached to an application form under paragraph (1):
1. Articles of association;
2. Operational manuals;
3. Business plans for three years after the commencement of business (including estimated financial statements and revenues and expenses forecast statements);
4. Documents in which the locations and names of the headquarters and branch offices, etc. are written;
5. Resumes and career certificates of executives;
6. Minutes for the proceedings of promoters' association;
7. Resumes and career certificates of promoters;
8. Contracts on joint ventures (limited to joint ventures with foreigners);
9. Documents evidencing the payment of capital stocks under Article 5 (1) of the Act and the source of such capital stocks;
10. Documents stating the names or titles of shareholders who own not less than 2/100 of the total number of the issued securities as of the application date of authorization and the number of securities owned by them;
11. Other documents deemed necessary for the examination of requirements for authorization under the Act or this Decree, which are prescribed by the Financial Services Commission;
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 6-2 (Detailed Requirements, etc. for Authorization concerning Professional Human Resources and Physical Facilities)
(1) The detailed requirements for professional human resources and physical facilities under Article 6-2 (1) 2 of the Act shall be as follows: <Amended by Presidential Decree No. 22401, Sep. 20, 2010; Presidential Decree No. 27414, Jul. 28, 2016>
1. Anyone of its promoters (applicable only where promoters are private individuals) and executives shall not fall under any of the subparagraphs of Article 5 (1) of the Act on Corporate Governance of Financial Companies, and it shall have, as its executives and employees, professional human resources with such expertise as specified by the Financial Services Commission, including persons who have worked for at least five years in the business field in which it intends to engage;
2. It shall have an electronic computer system required for its business, and shall also have an adequate office space.
(2) Detailed requirements for authorization concerning business plans under Article 6-2 (1) 3 of the Act shall be as follows: <Amended by Presidential Decree No. 22401, Sep. 20, 2010; Presidential Decree No. 25178, Feb. 11, 2014; Presidential Decree No. 27289, Jun. 28, 2016>
1. The forecast for revenue and expenditure shall be feasible and practicable;
2. Its equity capital ratio under Article 11-6 (1) 1 shall not be lower than 5/100, and it shall be able to maintain the ratio prescribed by the Financial Services Commission.
(3) Deleted. <by Presidential Decree No. 20555, Jan. 18, 2008>
(4) "Shareholders prescribed by Presidential Decree" in Article 6-2 (1) 4 of the Act means the following persons: <Amended by Presidential Decree No. 22401, Sep. 20, 2010>
1. The largest shareholder of the legal entity that is the largest shareholder (including the person having de facto control over the legal entity that is the largest shareholder, if such person is not the largest shareholder of the legal entity);
2. The representative of the legal entity that is the largest shareholder.
(5) The large shareholders under Article 6-2 (1) 4 of the Act shall meet the requirements provided for in attached Table 1. <Amended by Presidential Decree No. 22401, Sep. 20, 2010>
(6) The Financial Services Commission may request the Governor of the Financial Supervisory Service to conduct an examination on the requirements under paragraph (5) or may request the head of a relevant central administrative agency or the Governor of the Financial Supervisory Service to submit data required for such examination. <Amended by Presidential Decree No. 22401, Sep. 20, 2010>
(7) The Financial Services Commission may establish further specific guidelines for the detailed requirements under paragraphs (1), (2), and (5). <Amended by Presidential Decree No. 22401, Sep. 20, 2010>
[This Article Newly Inserted by Presidential Decree No. 16859, Jun. 27, 2000]
 Article 6-3 (Standards, etc. on Authorization for Establishment of Branch Offices, etc.)
(1) Any mutual savings bank which intends to obtain authorization for the establishment of branch offices, etc. under the proviso to Article 7 (1) and Article 7 (2) of the Act shall satisfy the following requirements: <Amended by Presidential Decree No. 23283, Nov. 1, 2011; Presidential Decree No. 25178, Feb. 11, 2014; Presidential Decree No. 27289, Jun. 28, 2016>
1. The amounts remaining after subtracting the total amounts of debts from the gross amount of assets in balance sheets of the relevant mutual savings bank (hereinafter referred to as "equity capital in balance sheets") as at the end of the latest quarter shall be at least 200/100 of the amounts under Article 5 (1) of the Act [or at least 100/100 of the aforementioned amounts, where it establishes a local office (referring to a business office engaged in accounting, which is attached to the headquarters or a branch office and equipped with human resources and facilities prescribed by Ordinance of the Prime Minister; hereinafter the same shall apply)];
2. No warning shall be given to a mutual savings bank under Article 24 (1) 1 of the Act from the Financial Services Commission for the recent one year and no measures corresponding to the partial suspension of business within six months under Article 24 (1) 5 of the Act shall be taken against a mutual savings bank: Provided, That where the largest shareholder has been changed, measures taken due to grounds which have occurred before the change of the largest shareholder shall be excluded;
3. The capital ratio under Article 11-6 (1) 1 as well as asset soundness classifications and standards under paragraph (2) 2 of the said Article which are determined by the Financial Services Commission shall be met.
(2) Paragraph (1) shall not apply to any of the following mutual savings banks: <Amended by Presidential Decree No. 23283, Nov. 1, 2011>
1. A mutual savings bank, for which three years have not passed since the date on which contract transfer, transfer or merger of business or stocks, the takeover of the relevant mutual savings bank by a third party is made or other measures to promote the management normalization is taken in accordance with Article 24-9, 24-11, or 24-15 of the Act, Article 36 or 36-2 of the Depositor Protection Act, or Article 10 (1) or 14 (2) of the Act on the Structural Improvement of the Financial Industry are complete;
2. A mutual savings bank which has survived a merger or has been established after a merger (hereinafter referred to as "merged mutual savings bank"), where a merger has been effected after authorization is granted to such merger under Article 10 (1) 1 of the Act or Article 4 of the Act on the Structural Improvement of the Financial Industry, for which three years have not passed since such merger is effected;
3. At least two savings banks, for which three years have not passed since they are transferred to a subsidiary, second-tier subsidiary, or third-tier subsidiary of a financial holding company under the Financial Holding Companies Act;
4. A mutual savings bank which, by the transfer of contracts, succeeds to the headquarters of or a branch office of another mutual savings bank and operates such headquarters or branch office as its branch office, etc.;
5. A mutual savings bank which intends to expand the number of the establishment of a local office (hereinafter referred to as "local office specializing in credit finance") that only deals with business activities referred to in Article 11 (1) 4, 5, or 10 of the Act and business activities incidental thereto in its business areas within the range of at least three and of not exceeding the number prescribed by the Financial Service Commission.
(3) "Mutual savings bank prescribed by Presidential Decree" in Article 7 (2) of the Act means any mutual savings bank which has the change of the largest shareholder under paragraph (4) (hereinafter referred to as "mutual savings bank with the change of the largest shareholder) or any mutual savings bank which, by the transfer of contracts, succeeds to the headquarters of or a branch office, etc. of another mutual savings bank that has established its branch office, etc. outside its business areas, as any of the following mutual savings banks: Provided, That mutual savings banks which the Financial Services Commission deems to be likely to damage the sound operation of mutual savings banks shall be excluded: <Amended by Presidential Decree No. 23283, Nov. 1, 2011>
1. A mutual savings bank which has been required to take timely corrective measures under Article 10 (1) of the Act on the Structural Improvement of the Financial Industry (including a mutual savings bank, for which timely corrective measures have been postponed under paragraph (3) of the same Article);
2. A mutual savings bank which is deemed to be likely to seriously harm the sound financial order or the rights and interests of depositors by the Governor of the Financial Supervisory Service, as it is obvious that its financial status would fall short of standards under Article 10 (2) of the Act on the Structural Improvement of the Financial Industry as the result of an examination under Article 23 of the Act.
(4) A person who intends to become the largest shareholder [where a person who intends to become a large shareholder and is not in a special relationship with the largest shareholder, and the largest shareholder jointly acquire and take over shares (referring to practical control over the relevant shares; hereafter referred to as "acquisition, etc." in this Article and Article 7-4 (3)), referring to a person who intends to become such large shareholder] in a mutual savings bank with the change of the largest shareholder shall obtain approval from the Financial Services Commission for the acquisition, etc. of shares after satisfying requirements for approval under Article 10-6 (1) of the Act and all of the following requirements: Provided, That requirements under subparagraph 2 shall not apply where a financial institution intends to become the largest shareholder of a mutual savings bank, and requirements under subparagraph 3 below and subparagraph 1 (a) of attached Table 2 shall not apply where the Federation intends to become the largest shareholder of a mutual savings bank by using the reserved fund for structural improvement under Article 48 of the Restriction of Special Taxation Act: <Amended by Presidential Decree No. 23283, Nov. 1, 2011; Presidential Decree No. 26600, Oct. 23, 2015>
1. Funds for capital increase, which may raise the level of the financial soundness of the relevant mutual savings bank higher than the level prescribed by the Financial Services Commission, shall be secured and deposited in a financial institution: Provided, That if the Financial Services Commission recognizes that the sound financial status of a person who acquires shares is maintained, deposits in the financial institution may be exempted;
2. Funds for capital increase under subparagraph 1 shall not be borrowings;
3. The equity capital of a person who intends to acquire, etc. shares (only applicable to a corporation) shall be at least three times of funds for takeover and capital increase, which are necessary for achieving the financial soundness under subparagraph 1, and shall satisfy standards prescribed by the Financial Services Commission: Provided, That where a person who intends to acquire, etc. shares is a private equity fund under Article 9 (19) 1 of the Financial Investment Services and Capital Markets Act (in cases of a special purpose company under Article 249-13 of the said Act, referring to a private equity fund which is its shareholder or employee), the equity capital (only applicable to a corporation) of its business executive members and a partner with limited liability, the investment shares of which are at least 30/100, shall be at least three times of the relevant investment shares, respectively, and shall satisfy standards prescribed by the Financial Services Commission.
(5) Where a mutual savings bank with the change of the largest shareholder, intends to establish a branch office, etc. in areas other than business areas, the mutual savings bank with the change of the largest shareholder shall, within one year from the date on which it obtains approval from the Financial Services Commission for the acquisition, etc. of shares pursuant to paragraph (4), increase its capital with funds for capital increase (where deposit is exempted, referring to the amounts corresponding thereto) deposited in a financial institution pursuant to the main sentence of paragraph (4) 1, and then shall apply for the establishment of a branch office, etc. within three years from the date on which it obtains such approval, after satisfying requirements under subparagraphs of paragraph (1): Provided, That classification standards for financial soundness under paragraph (1) 3 may not apply, as prescribed by the Financial Services Commission. <Amended by Presidential Decree No. 23283, Nov. 1, 2011>
(6) With respect to a branch office, etc. which a mutual savings bank with the change of the largest shareholder establishes in areas other than business areas, the total number of branch offices, etc. approved by the Financial Services Commission shall be not more than five, and other detailed standards for the establishment of branch offices shall be prescribed and publicly announced by the Financial Services Commission. <Amended by Presidential Decree No. 23283, Nov. 1, 2011>
(7) "Amount prescribed by Presidential Decree" in the former part of Article 7 (3) of the Act means the smaller of the following amounts: <Amended by Presidential Decree No. 23283, Nov. 1, 2011; Presidential Decree No. 25178, Feb. 11, 2014; Presidential Decree No. 25844, Dec. 9, 2014>
1. The amount that is calculated after applying the following formula to any amount classified under each subparagraph of Article 5 (1) of the Act on the basis of the location of a branch office, etc. to be established: Provided, That in cases of any mutual savings bank falling under any subparagraph of paragraph (2) or any mutual savings bank which meets the requirements prescribed and publicly announced by the Financial Services Commission in consideration of the number of branch offices, etc. to be established, scale of business areas, etc., an amount corresponding to 50/100 of the amount calculated in the former part shall apply:
(a) Branch office: Any amount classified under each subparagraph of Article 5 (1) of the Act × 100/100;
(b) Local office: Any amount classified under each subparagraph of Article 5 (1) of the Act × 5/100;
(c) Local office specializing in credit finance: Any amount classified under each subparagraph of Article 5 (1) of the Act × 1/100;
2. The amount that remains after subtracting the equity capital in a balance sheet from the sum of the following amounts:
(a) Any amount classified under each subparagraph of Article 5 (1) of the Act on the basis of the location of the headquarters;
(b) The amount added up by each amount that is calculated after applying a formula falling under each item of subparagraph 1 to any amount classified under each subparagraph of Article 5 (1) of the Act on the basis of the locations of all branch offices, etc. (including a branch office, etc. to be established under subparagraph 1): Provided, That in cases of any mutual savings bank falling under any subparagraph of paragraph (2) or any mutual savings bank which meets the requirements prescribed and publicly announced by the Financial Services Commission in consideration of the number of branch offices, etc. to be established, scale of business areas, etc., an amount corresponding to 50/100 of the amount calculated as mentioned here shall apply.
[This Article Newly Inserted by Presidential Decree No.22401, Sep. 20, 2010]
 Article 7 (Matters to be Reported)
(1) "Shareholders prescribed by Presidential Decree" in Article 10-2 (3) 1 of the Act means those who hold at least 2/100 of the total number of voting shares issued by a mutual savings bank: Provided, That those who have obtained approval under Article 10-2 (3) 2 or 10-6 (1) of the Act shall be excluded herefrom.
(2) "Cases prescribed by Presidential Decree" in Article 10-2 (1) 5 of the Act means the acquisition or disposal of own stocks.
(3) Deleted. <by Presidential Decree No. 27414, Jul. 28, 2016>
(4) "Cases prescribed by Presidential Decree" in Article 10-2 (3) 7 of the Act means cases where the amount that is calculated after the revenue of deposits, etc. is deducted from a payment made according to the closure of or withdrawal of funds from accounts for deposits, etc. for each person (hereinafter referred to as "payment of deposits, etc." in this paragraph) means any amount that is not less than any standardized amount prescribed by the Financial Services Commission: Provided, That cases where grounds for the withdrawal of funds from accounts for deposits correspond to grounds prescribed by the Financial Services Commission shall be excluded. <Amended by Presidential Decree No. 23283, Nov. 1, 2011>
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Articles 7-2 and 7-3 Deleted. <by Presidential Decree No. 27414, Jul. 28, 2016>
 Article 7-4 (Examining Qualifications of Large Shareholders)
(1) "Large shareholder prescribed by Presidential Decree" in Article 10-6 (1) of the Act means the following: <Amended by Presidential Decree No. 25844, Dec. 9, 2014>
1. The largest shareholder (including any shareholder who is a person in special relationship);
2. Any major shareholder (including any shareholder who is a person in special relationship);
3. Where the largest shareholder or major shareholder is a corporation, the largest shareholder or the largest investor (including a person who has de facto control over a corporation where a person who has de facto control over a corporation is different from the largest shareholder or the largest investor of such corporation) and representative of such corporation.
(2) "Requirements prescribed by Presidential Decree" in Article 10-6 (1) of the Act means requirements provided for in attached Table 2: Provided, That where the Governor of the Financial Supervisory Service or the President of the Korea Deposit Insurance Corporation (hereinafter referred to as the "Korea Deposit Insurance Corporation") established under the Depositor Protection Act makes a request due to special grounds, such as liquidation (including capital increase for self-normalization) of mutual savings banks under subparagraphs of Article 6-3 (3) and of insolvent financial institutions under subparagraph 2 of Article 2 of the Act on the Structural Improvement of the Financial Industry, all or some of requirements under items (b) and (f) of subparagraph 1 and items (a) and (b) of subparagraph 2 in attached Table 2 shall be excluded. <Amended by Presidential Decree No. 23283, Nov. 1, 2011; Presidential Decree No. 24635, Jun. 21, 2013>
(3) Grounds for the acquisition, etc. of shares and the period of application for approval under Article 10-6 (2) of the Act shall be as follows: <Amended by Presidential Decree No. 25178, Feb. 11, 2014>
1. When a person becomes a large shareholder by acquiring shares as the result of inheritance, legacy, or gift effective upon death after the death of the former shareholder: Three months after the date on which the previous shareholder dies: Provided, That where any unavoidable reason exists, the period may be extended by up to three months by obtaining approval from the Financial Services Commission;
2. When a person becomes a large shareholder by acquiring shares due to grounds prescribed and publicly announced by the Financial Services Commission, such as the exercise of a security right, the receipt of payment in substitutes or other grounds corresponding thereto: One month after the date on which he/she acquires shares;
3. When a person becomes a large shareholder due to the reduction of capital or the disposal of shares by other shareholders: One month after the date on which he/she becomes a large shareholder.
(4) The Financial Services Commission shall, upon receipt of an application for approval pursuant to Article 10-6 (1) or (2) of the Act, examine the details of such application, decide whether to grant approval within 60 days, and notify the applicator of the result and rationale in writing without delay. In such cases, the Financial Services Commission may request to rectify any defect such application may have. <Newly Inserted by Presidential Decree No. 25844, Dec. 9, 2014>
(5) When the period of examination under paragraph (4) is calculated, the period for rectifying any defect of the application, etc. determined and notified by the Financial Services Commission shall not be counted in the period of examination. <Newly Inserted by Presidential Decree No. 25844, Dec. 9, 2014>
(6) "Major shareholder prescribed by Presidential Decree" in the former part of Article 10-6 (3) of the Act means any of the following persons: <Amended by Presidential Decree No. 25844, Dec. 9, 2014>
1. The largest shareholder (including a person in special relationship with the largest shareholder, who holds at least 2/100 of the total number of voting shares issued by mutual savings banks);
2. Major shareholder (including a person in special relationship with any major shareholder, who holds at least 2/100 of the total number of voting shares issued by mutual savings banks);
3. Where the largest shareholder is a corporation, the largest shareholder (including a person who has de facto control over a corporation when a person who has de facto control over a corporation is different from the largest shareholder of such corporation; hereafter the same shall apply in paragraph (8)) and representative of such corporation.
(7) “Regular intervals prescribed by Presidential Decree" in the former part of Article 10-6 (3) of the Act means two years: Provided, That the period means one year, in cases of a same affiliated mutual savings bank under Article 12 (1) of the Act (hereinafter referred to as “same affiliated mutual savings bank”) and mutual savings banks, the total assets of which are at least two trillion won as of the latest fiscal year. <Amended by Presidential Decree No. 25178, Feb. 11, 2014; Presidential Decree No. 25844, Dec. 9, 2014>
(8) “Requirements prescribed by Presidential Decree” in the former part of Article 10-6 (3) of the Act means requirements provided for in attached Table 3. <Amended by Presidential Decree No. 24635, Jun. 21, 2013; Presidential Decree No. 25844, Dec. 9, 2014>
(9) The Financial Services Commission may request the submission of the following data to examine qualifications as major shareholders: <Amended by Presidential Decree No. 25844, Dec. 9, 2014>
1. Largest shareholder (including a person in special relationship with the largest shareholder, who holds at least 2 percent of the total number of voting shares issued by mutual savings banks);
2. Major shareholder (including a person in special relationship with any major shareholder, who holds at least 2 percent of the total number of voting shares issued by mutual savings banks);
3. Where the largest shareholder is a corporation, the largest shareholder or largest investor (including a person who has de facto control over a corporation when a person who has de facto control over a corporation is different from the largest shareholder of such corporation; hereafter the same shall apply in paragraph (8)) and representative of such corporation.
[This Article Newly Inserted by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 7-5 (Requirements for Conducting Installment Financial Business)
"Requirements prescribed by Presidential Decree, including financial soundness" in Article 11 (1) 15 of the Act means the following requirements: <Amended by Presidential Decree No. 27289, Jun. 28, 2016>
1. The ratio of equity capital to risk-weighted assets provided for in Article 11-6 (1) 1 shall be 10/100 or higher for the latest two consecutive fiscal years;
2. No record of having been subject to a warning or heavier punishment under Article 24 (1) 1 of the Act for the latest two years.
[This Article Newly Inserted by Presidential Decree No. 25178, Feb. 11, 2014]
 Article 8 (Preferential Treatment for Merged Mutual Savings Banks, etc.)
When the Financial Services Commission grants approval for incidental business activities pursuant to Article 11 (1) 16 of the Act, it may grant such approval preferentially to a merged mutual savings bank, a mutual savings bank that has taken over contracts, or a mutual savings bank that has shown excellent business performance and sound financial status. <Amended by Presidential Decree No. 25178, Feb. 11, 2014>
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 8-2 (Matters to be Observed in Performing Duties)
Mutual savings banks shall observe the following matters under Article 11 (2) of the Act: <Amended by Presidential Decree No. 23283, Nov. 1, 2011; Presidential Decree No. 25178, Feb. 11, 2014; Presidential Decree No. 27091, Apr. 8, 2016>
1. Any mutual savings bank shall maintain the aggregate amount of credit extensions offered to the individuals and small and medium enterprises determined and publicly announced by the Financial Services Commission in its business areas in accordance with any ratio as classified under each of the following items: Provided, That any credit extension determined and publicly announced by the Financial Services Commission shall be excluded in the calculation of the maintenance ratio:
(a) Where the mutual savings bank has its business areas falling under Article 4 (1) 1 and 2 of the Act: At least 50/100 of the amount of the total credit extensions;
(b) Where the mutual savings bank has its business areas other than areas falling under Article 4 (1) 1 and 2 of the Act: At least 40/100 of the amount of the total credit extensions;
(c) Where the mutual savings bank corresponds to any of the following: At least 30/100 of the amount of the total credit extensions:
(i) Any mutual savings banks with the change of the largest shareholder;
(ii) Any mutual savings bank which is newly established and, by the transfer of contracts, only succeeds to the headquarters of or a branch office, etc. of any mutual savings bank with the change of the largest shareholder;
(iii) Any mutual savings bank which is prescribed in subitems (i) and (ii) and, by the transfer of contracts or by merger, only succeeds to the headquarters of or a branch office, etc. of anther mutual savings bank prescribed in subitems (i) and (ii);
(d) Where the mutual savings bank fails to correspond to any mutual savings bank falling under items (a) through (c): At least any standardized ratio prescribed by the Financial Service Commission within the range of at least 30/100 and of not more than 50/100 of the amount of the total extensions;
2. Any mutual savings bank shall ensure that it does not exceed any ratio determined and publicly announced by the Financial Services Commission within 50/100 of the amount of the total credit extensions, with regard to any business type and credit extension determined and publicly announced by the Financial Services Commission;
3. Any mutual savings bank shall ensure that it satisfies standards determined and publicly announced by the Financial Services Commission with regard to trading partners or sales price when purchasing or buying loans;
4. Deleted. <by Presidential Decree No. 25844, Dec. 9, 2014>
5. No mutual savings bank shall offer credit extensions for procuring liabilities;
6. No mutual savings bank shall offer credit extensions on security of its own stocks (including investment securities);
7. Any mutual savings bank shall obtain approval from the Financial Services Commission when it intends to conclude real estate transfer contracts with a large shareholder, etc. (referring to a large shareholder, etc. prescribed in the main sentence of Article 37 (1) of the Act other than each subparagraph);
8. When any mutual savings bank purchases commercial bills issued and endorsed by major shareholders from persons other than major shareholders, it shall purchase such bills within 20/100 of its equity capital;
9. No amount of installment financing shall exceed 25/100 of the amount of the total credit extensions of mutual savings banks.
10. No mutual savings bank shall perform any of the following acts to protect the rights and interests of its users:
(a) The act of coercing a borrower into purchasing mutual bank products, such as deposit accounts, installment savings accounts, etc. (referring to mutual bank products referred to in Article 18-5 (1) of the Act; hereinafter the same shall apply), against his/her intent in connection with credit transactions;
(b) The act of restricting cancellation or withdrawal of mutual savings bank products, such as deposit accounts, installment savings accounts, etc., against a borrower’s intent in connection with credit transactions;
(c) The act of coercing a related person of a borrower determined and publicly announced by the Financial Services Commission, such as representative, executive officer, etc. of a small and medium-sized enterprise, into purchasing mutual savings bank products against the related person’s intent in connection with credit transactions;
(d) The act of selling mutual savings bank products, within one month before or after the date on which credit transactions have been made, to a small and medium-sized enterprise which is a borrower and to other borrowers and the related persons of such borrowers who were determined and publicly announced by the Financial Services Commission in connection with credit transactions, which also satisfies the requirements determined and publicly announced by the Financial Services Commission in consideration of the features, selling prices, etc. of mutual savings bank products for the purpose of protecting such borrowers and the related persons of such borrowers;
(e) Other acts corresponding to the provisions prescribed in items (a) through (e) which are determined and publicly announced by the Financial Services Commission to protect the rights and interests of users of mutual savings bank.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 9 (Limits on Extension of Credit to Individual Borrowers, etc.)
(1) "Limits prescribed by Presidential Decree within 20/100 of the equity capital of mutual savings banks" in Article 12 (1) of the Act means the following amounts, each of which do not exceed 20/100 of the equity capital of such mutual savings banks: <Amended by Presidential Decree No. 23283, Nov. 1, 2011; Presidential Decree No. 27091, Apr. 8, 2016>
1. Credit extensions to a corporation: 10 billion won;
1-2. Credit extensions to any business proprietor other than a corporation: 5 billion won;
2. Credit extensions to a person who conducts a regional development project or public project: An amount incurred in conducting the relevant project;
3. Credit extensions to a person who does not correspond to any person falling under subparagraphs 1, 1-2 and 2: 800 million won.
(2) "Limits prescribed by Presidential Decree within 20/100 of the equity capital in accordance with combined financial statements" in Article 12 (1) of the Act means 20/100 of the equity capital in accordance with combined financial statements.
(3) "Persons prescribed by Presidential Decree" in Article 12 (2) of the Act means persons who are offered credit extensions under paragraph (1) 2 and 3.
(4) "Limits prescribed by Presidential Decree within 25/100 of the equity capital of mutual savings banks" in Article 12 (3) of the Act means 25/100 of the equity capital of the relevant mutual savings banks.
(5) "Limits prescribed by Presidential Decree within 25/100 of the equity capital in accordance with combined financial statements" in Article 12 (3) of the Act means 25/100 of the equity capital in combined financial statements.
(6) Limits on extensions of credit under Article 12 (1) through (3) of the Act shall be calculated by subtracting the following amounts from the amounts of the total credit extensions to individual borrowers or same borrowers:
1. Amounts corresponding to deposits, etc. in the relevant mutual savings bank in the names of individual borrowers (excluding those which may be deposited and withdrawn freely from time to time, those transferable, and those offered as security for a third party);
2. Amounts for which the Government, the Bank of Korea under the Bank of Korea Act (hereinafter referred to as the "Bank of Korea"), or banks under the Banking Act guarantee payment;
3. Amounts secured by shares issued or guaranteed by the Government, the Bank of Korea, or banks under the Banking Act;
4. Other amounts secured by bonds issued by local governments, or other amounts determined by the Financial Services Commission as having no risk in the collection of claims.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 9-2 (Grounds for Exceeding Limits on Credit Extensions)
(1) Mutual savings banks may offer credit extensions to individual borrowers or identical borrowers, in excess of the limits set forth in Article 12 (1) through (3) of the Act, due to grounds under Article 12 (4) 1 in the following cases:
1. Where they offer additional credit extensions to a company, for which rehabilitation procedures under the Debtor Rehabilitation and Bankruptcy Act are in progress, or a company which jointly promotes management normalization with financial institutions for corporate restructuring;
2. Where they offer additional credit extensions in accordance with acquisition contracts to a person who has taken over a company falling under subparagraph 1;
3. Cases deemed inevitable by the Financial Services Commission for industrial development or the stabilization of the livelihood of citizens, including the promotion of infrastructure projects.
(2) Cases in which credit extensions offered by a mutual savings bank to an individual borrower or an identical borrower may exceed the limits set forth in Article 12 (1) through (3) of the Act due to grounds under Article 12 (4) 2 of the Act shall be as follows: <Amended by Presidential Decree No. 25844, Dec. 9, 2014>
1. Where the equity capital of mutual savings banks is reduced;
2. Deleted; <by Presidential Decree No. 23283, Nov. 1, 2011>
3. Where there is a change in the composition of individual borrowers or identical borrowers and the amounts of credit extensions due to a merger or business transfer between companies, to which banks have extended credit;
3-2. Where a merger with, or transfer or acquisition of business of financial institutions defined in suparagraph 1 of Article 2 of the Act on the Structural Improvement of the Financial Industry is made;
4. Cases where the Financial Services Commission recognizes that credit extensions offered by the mutual savings bank exceeds limits due to unavoidable grounds, such as sudden changes in the economic condition with no causes attributable to such mutual savings banks.
(3) "Public institutions prescribed by Presidential Decree" in Article 12 (4) 3 of the Act means public institutions under the Act on the Management of Public Institutions and local directly-run companies, local public corporations and local industrial complexes under the Local Public Enterprises Act.
(4) "Regional development projects prescribed by Presidential Decree" in Article 12 (4) 3 of the Act means the following projects:
1. Waterworks projects;
2. Waterworks projects for industrial purposes;
3. Railway projects (including urban railway projects);
4. Public transportation projects;
5. Gas projects;
6. Local road projects;
7. Sewerage projects;
8. Cleaning and sanitation projects;
9. Housing projects;
10. Medical service projects;
11. Interment or graveyard projects;
12. Parking lot projects;
13. Land development projects;
14. Market projects;
15. Tourism projects;
16. Other public projects determined by the Financial Services Commission as especially necessary for regional development, which are equivalent to those referred to in subparagraphs 1 through 15.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 9-3 (Grounds for Extending Period of Time Allowable for Credit Extension Being in Excess of Limit)
In any of the following cases, mutual savings banks may extend a period under Article 12 (5) upon obtaining approval from the Financial Services Commission under Article 12 (6) of the Act:
1. Where it is hard to collect within the period of time because the maturity of the credit extension already offered has not yet become due;
2. Where grounds under Article 9-2 (2) 1 of the Act last for a long time and the management stability of a person, to whom the credit extension has been offered, is likely to be severely undermined if the mutual savings bank collects the credit extension;
3. Where any ground similar to those under subparagraphs 1 and 2 exists and the Financial Services Commission concludes that the soundness in assets of the mutual savings bank is not likely to be severely hurt even when the credit extension remains in excess of the limits for a certain period of time.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 9-4 (Limit on Acquisition of Stocks Issued by Large Shareholders)
(1) "Amount prescribed by Presidential Decree" in the first sentence of Article 12-2 (1) and (2) of the Act means the smaller of an amount equivalent to 10/10,000 of the equity capital of a mutual savings bank, as the amount for a single transaction determined and publicly announced by the Financial Services Commission (in cases falling under Article 12-2 (1) of the Act, the amount acquired from the securities market or the Alternative Trading System under the Financial Investment Services and Capital Markets Act or a foreign market similar to those markets shall be excluded herefrom), and one billion won. <Amended by Presidential Decree No. 20653, Feb. 29, 2008; Presidential Decree No. 20947, Jul. 29, 2008; Presidential Decree No. 24697, Aug. 27, 2013>
(2) "Matters prescribed by Presidential Decree" in Article 12-2 (3) of the Act means the following: <Amended by Presidential Decree No. 20653, Feb. 29, 2008>
1. The size of stocks acquired among those issued by large shareholders as of the end of each quarter;
2. The increased or decreased amount of stocks held during each quarter;
3. The value of stocks acquired during each quarter;
4. Other matters prescribed and publicly announced by the Financial Services Commission.
(3) Each mutual savings bank shall disclose the matters referred to in the subparagraphs of paragraph (2) to the public within one month after the end of each quarter.
[This Article Newly Inserted by Presidential Decree No. 20555, Jan. 18, 2008]
 Article 9-5 (Scope of Undue Influence Exercised by Large Shareholders)
"Conduct prescribed by Presidential Decree" in subparagraph 3 of Article 12-3 of the Act means the following:
1. Demanding a mutual savings bank to commit an illegal act;
2. Demanding to engage in a transaction with a large shareholder him/herself or a third party under terms and conditions different from ordinary terms and conditions in relation to interest rate, fees, security, or such.
[This Article Newly Inserted by Presidential Decree No. 20555, Jan. 18, 2008]
 Article 10 (Composition, etc. of Credit Screening Committees and Supervisory Departments)
(1) "Mutual savings banks that meet criteria prescribed by Presidential Decree” in Article 13 (1) of the Act means mutual savings banks with the average total value of assets of at least 300 billion won as stated in their balance sheets of the latest three business years.
(2) The credit screening committee referred to in Article 13 (1) of the Act (hereafter referred to as “credit screening committee” in this Article) shall be comprised of three to five members, including at least one person who has been engaged in credit-related business for at least five years.
(3) Any decision of a meeting of the credit screening committee shall require at least two-thirds of its enrolled members to be present and the concurring vote of at least two-thirds of the members present. <Amended by Act No. 27091, Apr. 8, 2016>
(4) The composition of a department in charge of supervision under Article 13 (1) of the Act shall include at least one person who has been engaged in credit-related business for at least five years, and the department shall be operated independently from departments responsible for directly managing or screening credit.
(5) Detailed matters concerning the composition and operation of the credit screening committee and supervisory department prescribed in paragraphs (2) through (4) shall be determined and publicly announced by the Financial Services Commission.
[This Article Newly Inserted by Presidential Decree No. 25178, Feb. 11, 2014]
 Article 10-2 (Contents of and Methods for Obligations to Explain)
(1) “Matters prescribed by Presidential Decree” in Article 14 (1) 3 of the Act means the matters according to the following classification:
1. Where a mutual savings bank solicits customers to enter into a contract for a deposit, etc.: Matters related to the payment of interest;
2. Where a mutual savings bank recommends a subordinated bond (referring to a subordinated bond prescribed in Article 14 (1) of the Act; hereinafter the same shall apply):
(a) Matters related to the payment of interest;
(b) Main content of financial instruments including the content of their special contract terms;
(c) Matters related to the risk of investment including the loss of the principal and interest;
(d) Matters concerning the soundness of half-yearly business management of the relevant mutual savings bank for the latest two years, which are determined and publicly announced by the Financial Services Commission.
(2) "Methods prescribed by Presidential Decree” in Article 14 (2) of the Act means the following methods:
1. Electronic mail and other similar electronic communications;
2. Mail;
3. Telephone answering system;
4. Electronic documents with certified digital signature as prescribed in subparagraph 3 of Article 2 of the Digital Signature Act.
[This Article Newly Inserted by Presidential Decree No. 25178, Feb. 11, 2014]
 Article 11 (Retention of Assets for Reserve)
(1) The Financial Services Commission may determine the following matters pursuant to Article 15 of the Act:
1. Reserve ratio (which means the ratio of assets for reserve to the total amounts of installment savings, deposits, and installment received by a mutual savings bank);
2. The ratio of cash, savings, deposits, and securities retained as assets for reserve within the scope of the reserve ratio under subparagraph 1 and the methods of retention.
(2) "Securities prescribed by Presidential Decree" in Article 15 of the Act means any of the following:
1. State bonds under the State Bond Act and local government bonds under the Local Finance Act;
2. Treasury bills under the Management of the National Funds Act;
3. Monetary stabilization bonds issued by the Bank of Korea under the Bank of Korea Act;
4. Bonds issued by public enterprises and quasi-governmental institutions under the Act on the Management of Public Institutions;
5. Securities prescribed by the Financial Services Commission, which correspond to those falling under subparagraphs 1 through 4.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 11-2 (Prohibited Activities, etc.)
(1) "Provision of guarantee for an obligation or offering any security prescribed by Presidential Decree" in Article 18-2 (1) 3 of the Act means any of the following: <Amended by Presidential Decree No. 25178, Feb. 11, 2014>
1. Guarantee provided for a depositor after creating a security interest within the amount of his/her deposits, etc.;
2. Guarantee or security provided for another mutual savings bank when the other mutual savings bank receives a loan from the Federation, the Korea Deposit Insurance Corporation, or a financial institution.
(2) “Persons prescribed by Presidential Decree” in Article 18-2 (1) 8 and (2) 2 of the Act means those who jointly perform a project in a same project site for real estate development and supply. In such cases, the detailed scale of a project site shall be determined and publicly announced by the Financial Services Commission. <Newly Inserted by Presidential Decree No. 25178, Feb. 11, 2014>
(3) “Credit extension prescribed by Presidential Decree” in Article 18-2 (1) 8 or (2) 2 of the Act means the extension of credit provided with a future cash flow to be generated from a relevant real estate development and supply project as the main financial resources for the repayment of the principal and interest of a loan, by evaluating the business value of the relevant real estate development and supply. <Newly Inserted by Presidential Decree No. 25178, Feb. 11, 2014>
(4) “Limits prescribed by Presidential Decree within 25 percent of its equity capital” in Article 18-2 (1) 8 of the Act means 25/100 of the equity capital. <Newly Inserted by Presidential Decree No. 25178, Feb. 11, 2014>
(5) “Requirements prescribed by Presidential Decree, including financial soundness” in the proviso to Article 18-2 (1) 9 of the Act means the following requirements: <Newly Inserted by Presidential Decree No. 25178, Feb. 11, 2014; Presidential Decree No. 27289, Jun. 28, 2016>
1. The ratio of equity capital to risk-weighted assets, etc. provided for in Article 11-6 (1) 1 shall be at least the ratio determined and publicly announced by the Financial Services Commission;
2. The subordinated bonds issued by a relevant mutual savings bank shall receive an investment grade rating or higher from a credit rating company prescribed in the Financial Investment Services and Capital Markets Act.
(6) “Large shareholders prescribed by Presidential Decree” in Article 18-2 (1) 10 of the Act means the largest shareholder and major shareholders. <Newly Inserted by Presidential Decree No. 25178, Feb. 11, 2014>
(7) “Limits prescribed by Presidential Decree within 25 percent of its equity capital according to consolidated financial statements” in Article 18-2 (2) 2 of the Act means 25/100 of the equity capital based on consolidated financial statements. <Newly Inserted by Presidential Decree No. 25178, Feb. 11, 2014>
(8) “Reasons prescribed by Presidential Decree, including a change in its equity capital” in the main sentence of Article 18-2 (3) of the Act means any of the following reasons: <Newly Inserted by Presidential Decree No. 25178, Feb. 11, 2014>
1. Reduction in equity capital;
2. Transfer of a contract, transfer of business or stocks, or merger with other financial institutions;
3. Transfer of business or stocks, or merger between companies which have issued securities owned by a mutual savings bank or same-affiliated mutual savings bank;
4. Other reasons equivalent to those under subparagraphs 1 through 3, where the Financial Services Commission recognizes that the limits provided for in Article 18-2 (1) or (2) of the Act are exceeded without causes attributable to a mutual savings bank or same-affiliated mutual savings bank.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 11-3 (Criteria for Management of Collective Investment Assets, etc.)
(1) “Criteria prescribed by Presidential Decree, such as the method for managing assets necessary for sound management of assets” in the part other than each subparagraph of Article 18-4 (1) of the Act means the following criteria: <Amended by Presidential Decree No. 27414, Jul. 28, 2016>
1. A mutual savings bank shall not unduly promise the protection of principal or fixed profit, or extend credit, to other investors, etc.;
2. A mutual savings bank shall include the following matters in its internal control standards (referring to an internal control standards under Article 24 (1) of the Act on Corporate Governance of Financial Companies; hereinafter the same shall apply):
(a) Matters related to the standards and procedures for the appointment or dismissal of a financial investment business entity (referring to a financial investment business entity provided for in Article 8 (1) of the Financial Investment Services and Capital Markets Act; hereinafter the same shall apply);
(b) Matters related to the evaluation of asset management performance of a financial investment business entity;
(c) Matters related to the monitoring of the adequacy of asset management by a financial investment business entity;
(d) Matters related to the establishment of a comprehensive management system of assets;
(e) Other matters necessary for the sound asset management by a mutual savings bank.
(2) “Cases prescribed by Presidential Decree” in Article 18-4 (1) 4 of the Act means any of the following cases: <Amended by Presidential Decree No. 26600, Oct. 23, 2015>
1. Where a mutual savings bank acts as an executive partner prescribed in Article 214 or 249-14 of the Financial Investment Services and Capital Markets Act;
2. Where at least 50/100 of the earnings of a private placement collective investment scheme (referring to a private placement collective investment scheme provided for in Article 9 (19) of the Financial Investment Services and Capital Markets Act; hereafter the same shall apply in subparagraph 3) is distributed to a mutual savings bank or its specially related person in accordance with the collective investment agreement referred to in Article 9 (22) of the same Act;
3. Where, in accordance with the articles of incorporation, etc., of a firm in which a mutual savings bank invests through a private placement collective investment scheme (referring to a special purpose company prescribed in subparagraph 5 of Article 2 of the Asset-Backed Securitization Act and a company prescribed in Article 170 of the Commercial Act), at least 50/100 of the earnings of the firm is distributed to a mutual savings bank or its specially related person;
4. Other Cases equivalent to those in subparagraphs 1 through 3, where the Financial Services Commission recognizes that a mutual savings bank actually manages assets through a specially related person, etc.
(3) “Matters prescribed by Presidential Decree” in Article 18-4 (2) 3 of the Act means the following:
1. Prohibition against owning any real estate other than real estate for business purposes as prescribed in Article 18-2 (1) 2 of the Act;
2. Prohibition against extending credit to, making a deposit in, or making a provisional payment, to a large shareholder, etc. as prescribed in Article 37 of the Act;
3. Matters to be observed in performing duties under subparagraphs 2, 4, 8, and 9 of Article 8-2.
(4) The scope and size of assets considered to be owned by a mutual savings bank or same-affiliated mutual savings bank under Article 18-4 (2) of the Act shall be an amount calculated by multiplying the credit extension referred to in paragraph (2) of the same Article which is owned by a private placement collective investment scheme operated in accordance with each subparagraph of paragraph (1) of the same Article by the percentage of investment of a relevant mutual savings bank or same-affiliated mutual savings bank.
(5) Detailed matters necessary for the evaluation of the scope and size of the assets prescribed in paragraph (4) shall be determined and publicly announced by the Financial Services Commission.
[This Article Newly Inserted by Presidential Decree No. 25178, Feb. 11, 2014]
 Article 11-4 (Methods and Procedures for Advertising of Financial Instruments of Mutual Savings Banks)
(1) The terms of trade referred to in Article 18-5 (1) and (2) of the Act shall include the matters related to the range of interest rates, period for interest payment, interest payment limitation, period for imposition of interest, incidental cost, etc. of a relevant financial instrument of a mutual savings bank. <Amended by Act No. 27091, Apr. 8, 2016>
(2) Where a mutual savings bank advertises its financial instruments, it shall comply with the following matters:
1. With respect to the range and calculation method of interest rates, period for payment and imposition of interest, and incidental benefits and cost, matters which have not been determined yet shall not be indicated as if they have been determined;
2. With respect to the range and calculation method of interest rates, period for payment and imposition of interest, and incidental benefits and cost, a mutual savings bank shall not indicate that its financial instruments have comparative advantages over other financial instruments without presenting detailed grounds and contents of relevant terms.
(3) Where a mutual savings bank intends to advertise its financial instrument, it shall, in advance, reflect matters to be observed with respect to the production and content of an advertisement in its internal control standards, and gain the confirmation of a compliance officer (referring to a compliance officer under Article 25 (1) of the Act on Corporate Governance of Financial Companies; hereinafter the same shall apply) concerning its compliance with such matters. <Amended by Presidential Decree No. 27414, Jul. 28, 2016>
(4) Where a mutual savings bank advertises its financial instrument, it shall keep the content of an advertisement and related records until the termination of the contract of a relevant financial instrument.
(5) Matters necessary for the methods and procedures for advertising other than the those specified in paragraphs (1) through (4) shall be determined and publicly announced by the Financial Services Commission.
[This Article Newly Inserted by Presidential Decree No. 25178, Feb. 11, 2014]
 Article 11-5 (Measures to Protect Customer Service Employees)
“Measures, such as legal measures, prescribed by Presidential Decree” referred to in Article 18-7 (1) 4 of the Act means the following measures:
1. Where verbal abuse, sexual harrassment, assault, etc. (hereinafter referred to as “verbal abuse, etc.”) committed by a customer are deemed to violate criminal punishment provisions of the related statutes and the relevant employee who was harmed by such acts requests: File a criminal charge to a competent investigative agency, etc.;
2. Where verbal abuse, etc. committed by a customer do not violate criminal punishment provisions of the related statutes but it is deemed necessary considering the degree of damages to the employee affected by such acts and the possibility of future damage to such and other employees: Request a competent investigative agency, etc. to take necessary measures;
3. Provide administrative and procedural support necessary for the harmed employee to take a measure, such as complaint, accusation, claim for damages, etc., directly to a competent investigative agency, etc. against a customer who has committed verbal abuse, etc.;
4. Carry out education on instructions for action by employees to prevent or respond to verbal abuse, etc. committed by customers;
5. Other measures necessary to protect employees from verbal abuse, etc. committed by customers, which is determined and publicly announced by the Financial Services Commission.
[This Article Newly Inserted by Presidential Decree No. 27289, Jun. 28, 2016]
 Article 11-6 (Standards for Soundness of Management)
(1) Standards for financial soundness to be determined by the Financial Services Commission pursuant to Article 22-2 (1) 1 of the Act shall include the following matters:
1. The ratio of equity capital to risk-weighted assets in accordance with standards of the Bank for International Settlements;
2. The ratio of reserve for bad debts to amounts of reserve required to be accumulated;
3. The ratio of retirement benefits appropriation fund to estimated amounts of retirement benefits.
(2) Standards for the classification of asset soundness to be determined by the Financial Services Commission pursuant to Article 22-2 (1) 2 of the Act shall include the following matters:
1. Scope of assets subject to classification;
2. Classification stages for asset soundness and standards therefor.
(3) Standards for accounting and the settlement of accounts to be determined by the Financial Services Commission pursuant to Article 22-2 (1) 3 of the Act shall include the following matters:
1. Standards for accounting;
2. Standards for settlement of accounts;
3. Standards for the accumulation of the reserve for bad debts and depreciation.
(4) Deleted. <by Presidential Decree No. 27414, Jul. 28, 2016>
(5) Standards for liquidity determined by the Financial Services Commission under Article 22-2 (1) 5 of the Act shall include the following matters:
1. Scope of current liabilities and current assets;
2. The holding ratio of current assets to current liabilities.
(6) When the Financial Services Commission determines standards for management soundness under paragraphs (1) through (5), it shall notify the Federation, the Korea Deposit Insurance Corporation, and mutual savings banks of such standards without delay.
(7) The Financial Services Commission may allow the Governor of the Financial Supervisory Service to determine detailed requirements for standards provided for in paragraphs (1) through (5). <Newly Inserted by Presidential Decree No. 23283, Nov. 1, 2011>
 Articles 12 and 12-2 Deleted. <by Presidential Decree No. 27414, Jul. 28, 2016>
 Article 12-3 (Restriction on Transactions with Large Shareholders)
"Case prescribed by Presidential Decree" in the main sentence of Article 22-4 (2) of the Act means where a large shareholder falls under any of the following: <Amended by Presidential Decree No. 24697, Aug. 27, 2013>
1. Where the liabilities of a large shareholder (applicable only where the large shareholder is a company, and including specially related persons of the company: the same shall apply in this paragraph) exceeds its assets;
2. Where the financial institution that has extended the largest amount of credit to a large shareholder (excluding where the large shareholder of a financial institution which has extended credit is the large shareholder of the relevant mutual savings bank) is classified as one that falls short of standards prescribed by the Financial Services Commission, as a result of evaluating the credit risks of the large shareholder in accordance with the standards for classification of asset soundness prescribed by the Financial Services Commission under Article 22-2 (1) 2 of the Act;
3. Where a large shareholder is rated at the below-investment grade by at least two credit rating agencies under the Financial Investment Services and Capital Markets Act.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 13 (Public Disclosure of Business Management)
(1) "Matters prescribed by Presidential Decree" in Article 23-2 of the Act means the following matters:
1. Matters concerning the organization and human resources;
2. Matters concerning the financial status, profit, and loss;
3. Matters concerning the procurement and management of funds;
4. Deleted. <by Presidential Decree No. 27414, Jul. 28, 2016>
5. Details of a disposition made against it, if such disposition was made pursuant to Article 24, 24-2, or 24-3 of the Act or Article 10 or 14 of the Act on the Structural Improvement of the Financial Industry;
6. Other matters determined by the Financial Services Commission that deems necessary for the protection of customers and the maintenance of financial order.
(2) The Financial Services Commission may prescribe detailed guidelines concerning matters subject to the public disclosure under paragraph (1) 1 through 5.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 14 (Reporting, etc. of Illegal Acts)
(1) When a person intends to report an illegal act to, or provide information on an illegal act to the Financial Services Commission or the Governor of the Financial Supervisory Service under Article 23-3 (1) of the Act, he/she shall observe the following standards:
1. Reports or information shall be related to the illegal act of a specific person;
2. He/she shall present the violator, the date and place of the violation, and the fact of violation along with evidence;
3. The identity of a person who intends to report or provide information (hereafter referred to as "reporter, etc." in this Article) shall be disclosed.
(2) The Financial Services Commission or the Governor of the Financial Supervisory Service may ask reporters, etc. about their personal information, the details and purposes of making reports or providing information, or other matters necessary for identifying reports or information.
(3) The Financial Services Commission or the Governor of the Financial Supervisory Service may request reporters, etc. to submit data to the extent necessary for verifying the truth of reports or information.
(4) The Financial Services Commission or the Governor of the Financial Supervisory Service shall handle reports or information within 90 days after receipt of such reports or information. In such cases, it may extend the period by up to 30 days, when it is deemed necessary for the submission of data or listening to opinions, etc.
(5) The Financial Services Commission or the Governor of the Financial Supervisory Service shall notify reporters, etc. of the outcomes of handling reports or information in writing: Provided, That it may notify reporters, etc. of such outcomes orally or via the information communications network in cases determined and publicly announced by the Financial Services Commission. In such cases, it shall give documents on the outcomes of handling reports or information without delay, when reporters, etc. make a request to do so.
(6) When reporters, etc. receive unfavorable treatment by institutions, to which they belong, with regard to reports or information, they may request the Financial Services Commission or the Governor of the Financial Supervisory Service to take necessary measures, such as reinstatement.
(7) The Financial Services Commission or the Governor of the Financial Supervisory Service may request the heads of institutions, to which reporters, etc. belong, to take appropriate measures, such as reinstatement, when requests from reporters, etc. under paragraph (6) are deemed to be reasonable: Provided, That where institutions, to which reporters, etc. belong, are not financial institutions, it may recommend the heads of institutions, to which reporters, etc. belong, or the heads of related institutions to take appropriate measures.
(8) The Financial Services Commission or the Governor of the Financial Supervisory Service may pay rewards to reporters, etc. within budgetary limits, in accordance with standards determined and publicly announced by the Financial Services Commission within 300 million won, when reports or information it has received are deemed to be helpful in detecting major illegal acts of mutual savings banks or taking measures following such detection. <Amended by Presidential Decree No. 24635, Jun. 21, 2013>
(9) Except as otherwise expressly provided for in paragraphs (1) through (8), matters necessary in relation to the methods of providing or accepting reports or information on illegal acts, procedures for handling such reports or information, and the payment of rewards shall be determined and publicly announced by the Financial Services Commission.
[This Article Newly Inserted by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 14-2 (Administrative Dispositions)
"Case prescribed by Presidential Decree" prescribed in subparagraph 55 of attached Table 1 of the Act, as referred to in the main sentence of Article 24 (1) of the Act, means any case falling under any subparagraph of attached Table 4.
[This Article Newly Inserted by Presidential Decree No. 23283, Nov. 1, 2011]
 Article 15 (Requirements, etc. for Business Guidance)
(1) "Credit extended to an individual borrower in excess of the limit, credit illegally extended in a large amount, or credit extended to a large shareholder, as prescribed by Presidential Decree" in Article 24-2 (1) 1 of the Act means credit extended in any of the following manners:
1. The portion of credit extended in excess, where the aggregate of credit extended in excess of the limit for each individual borrower under subparagraph 8 (a) of Article 2 of the Act (hereinafter referred to as "credit extended in excess of the limit for each individual borrower") exceeds 100/100 of the equity capital;
2. The exceeding portion of credit extended in excess, where the aggregate of credit illegally extended in a large amount under subparagraph 8 (c) of Article 2 of the Act (hereinafter referred to as "large credit illegally extended") exceeds 200/100 of the equity capital;
3. The exceeding portion of credit extended in excess, where the aggregate of credit extended to a large shareholder under subparagraph 8 (d) of Article 2 of the Act exceeds 10/100 of the equity capital.
(2) "Disposition specified by Presidential Decree" in Article 24-2 (1) 2 of the Act means the following disposition:
1. Demanding a censure (limited to dismissal or suspension from office);
2. Recommending removal or demanding suspension of performance of duties.
(3) “Cases prescribed by Presidential Decree” in Article 24-2 (1) 5 of the Act means any of the following cases: <Newly Inserted by Presidential Decree No. 25178, Feb. 11, 2014>
1. Where a mutual savings bank is granted the delay of the timely corrective measures under Article 10 (3) of the Act on the Structural Improvement of the Financial Industry;
2. Where a mutual savings bank is feared to infringe on depositors’ rights and interests and disrupt order in credit as it is unable to pay debts, such as deposits, or repay its borrowings due to its abruptly destabilized financial standing;
3. Where the normal management of a mutual savings bank is likely to be impracticable as its liabilities exceed its assets due to the occurrence of any major financial accident or accrual of non-performing loans.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 15-2 (Requirements, etc. for Cessation of Business Guidance)
(1) The business guidance under Article 24-2 of the Act (hereinafter referred to as "business guidance") may be terminated in any of the following cases: <Amended by Presidential Decree No. 25178, Feb. 11, 2014>
1. Where the aggregate of credit extended in excess of the limit for each individual borrower is reduced to not more than 100/100 of the equity capital;
2. Where the aggregate of large credit illegally extended is reduced to not more than 200/100 of the equity capital;
3. Where the credit extended to large shareholders is fully recovered;
4. Where the corrective measures taken for business guidance pursuant to Article 24-2 (1) 2 or 3 of the Act is completed or it is concluded unnecessary to continue business guidance any longer;
5. Where it is concluded that the cause of business guidance has been eliminated by timely corrective measures pursuant to Article 24-2 (1) 4 of the Act or where an administrator is appointed pursuant to an order to improve business management;
6. Where it is recognized that the reasons for business guidance prescribed in each subparagraph of Article 15 (3) have been resolved.
(2) Notwithstanding paragraph (1), the Financial Services Commission may terminate business guidance for a mutual savings bank, where the bank under the business guidance transfers its business or a third party acquires the bank in accordance with Article 24-15 (1) or (2) of the Act or Article 36 of the Depositor Protection Act.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 15-3 (Methods of Business Guidance)
(1) In principle, business guidance shall be provided by dispatching an employee of the Financial Supervisory Service or the Korea Deposit Insurance Corporation (or a person who is not an employee of the Financial Supervisory Service or Korea Deposit Insurance Corporation, but whom the Governor of the Financial Supervisory Service recognizes and recommends as competent in business guidance; hereinafter referred to as "business management instructor") to remain in the head office or a branch office of a mutual savings bank (hereinafter referred to as "on-site guidance"): Provided, That business guidance may also be provided in writing, where the control of the mutual savings bank subject to business guidance has been transferred to another person or if the likelihood of illegal or poor business management is low because illegal or non-performing loans have been secured by collateral, or other measures have been taken for securing claims. <Amended by Presidential Decree No. 25178, Feb. 11, 2014>
(2) On-site guidance shall be provided in such a way that a business management instructor inspects and examines documents relating to business affairs of the relevant mutual savings bank or keeps records of the matters concerning which such guidance has been provided.
(3) Guidance in writing may be provided in such a way that a business management instructor requires the relevant mutual savings bank to submit reports, but visits the bank in person, if necessary to ensure that the bank performs as guided.
(4) Matters concerning business guidance, including the appointment, dispatch, and visits of business management instructors and reporting on matters subject to business management shall be prescribed in further detail by the Financial Services Commission.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 15-4 (Term of Business Guidance)
(1) The term of business guidance shall be six months.
(2) The Financial Services Commission may extend the term of business guidance by three months, if a mutual savings bank fails to meet the requirements for cessation of business guidance under Article 15-2 within the term under paragraph (1).
(3) The Financial Services Commission shall, when it intends to extend the term of business guidance pursuant to paragraph (2), notify the mutual savings bank concerned of the fact by no later than three days before the expiration of the term of business guidance, clearly stating the reason therefor.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 15-5 (Notice of Business Guidance)
The Financial Services Commission shall, when it intends to provide a mutual savings bank with business guidance, notify the bank, in writing, of the reasons for and term of the business guidance and a list of business management instructors.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 16 (Detailed Requirements for Business Management)
(1) Detailed requirements for business management under Article 24-3 (2) of the Act shall be cases falling under any of the following subparagraphs:
1. Where a mutual savings bank has illegally extended credit or non-performing credit falling under any of the following items but has failed to take measures for the preservation of claims, such as securing of collateral appropriate for such credit:
(a) Where the amounts of non-performing credit as defined in subparagraph 8 (e) of Article 2 of the Act out of the aggregate of credit extended in excess of the limit for each individual borrower exceed 100/100 of the equity capital;
(b) Where the amounts of non-performing credit as defined in subparagraph 8 (e) of Article 2 of the Act out of the aggregate of large credit illegally extended exceed 100/100 of the equity capital;
(c) Where the aggregate of credit extended to a large shareholder exceeds 100/100 of the equity capital;
(d) Where the aggregate of illegally extended credit or non-performing credit under items (a) through (c) exceeds 100/100 of the equity capital.
2. Where a mutual savings bank, which has been subject to the business guidance continuously for at least six months or three times or more during the recent five years, has credit extended in excess of the limit for each individual borrower, large credit illegally extended, or credit extended to a large shareholder, but fails to secure collateral appropriate for such credit or to take any measure for the preservation of claims;
3. Where a mutual savings bank has failed to perform its obligations within three months, in compliance with a supervisory order under Article 22 (2) of the Act or a demand for censure (which shall be limited to dismissal or suspension from service) against an executive or suspension of performance of duties of an executive, or a recommendation of removal of an executive under Article 24 (1) 1 or 3 of the Act;
4. Where a mutual savings bank that has been subject to the disposition under Article 24 (1) 5 of the Act does not perform its obligations or does not observe a fixed period;
5. Where business management is deemed necessary for the protection of public interests or depositors, falling under any of the following items, because a bank run or credit extension to a large shareholder is likely to occur again:
(a) Where the aggregate of credit extended to a large shareholder for the recent two years exceeds 200/100 of the equity capital;
(b) Where the relevant mutual savings bank or any of its executives and employees have been sentenced to a fine or heavier punishment on three or more occasions or have been subjected to the disposition of a warning (limited to a warning to the censured institution) or a censure (which shall be limited to recommendation for dismissal of an executive or demand for dismissal of an employee) from the Financial Services Commission during the recent three years on account of credit extension to a large shareholder.
(2) When a mutual savings bank becomes subject to business management, it shall provide a public notice of the fact at the customer lounge of its head office and branch offices under Article 24-3 (5) of the Act (including cases applied mutatis mutandis in Article 24-8 (4)), without delay, and shall publish the notice in a daily newspaper circulated in the area where the head office of the bank is located within one business day.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 17 (Liabilities, etc. Subject to Exclusion from Payment Suspension)
(1) "Cases prescribed by Presidential Decree, such as taxes and the public utilities' charge" in Article 24-4 (1) of the Act means any of the following cases: <Amended by Presidential Decree No. 23987, Jul. 24, 2012>
1. Taxes and the public utilities' charges or rental charges;
2. Liabilities related to wages or disaster compensation during the recent three months, for which a preferential payment right is recognized under Article 38 (2) of the Labor Standards Act, or retirement benefits for the recent three years, for which a preferential payment right is recognized under Article 11 (2) of the Guarantee of Workers' Retirement Benefits Act;
3. Funds for the settlement of domestic exchanges;
4. Funds temporarily deposited for the performance of duties of the State, public organizations, the Federation, or financial institutions by proxy;
5. Other liabilities deemed necessary for the maintenance or management of mutual savings banks by the Financial Services Commission.
(2) "Grounds prescribed by Presidential Decree, such as cases where management normalization is possible" in Article 24-4 (2) of the Act means any of the following cases:
1. Cases where claims for illegally extended credit or non-performing credit have been substantially secured, and it is deemed that all liabilities owed by the mutual savings bank may be fully repaid with its assets;
2. Cases where it is deemed that all liabilities owed by the mutual savings bank may be repaid with its assets as the result of evaluating assets and liabilities;
3. Cases where it is deemed that liabilities owed by the mutual savings bank may not be fully repaid with its assets as the result of inspecting assets, but there exists a person designated to take over its contracts;
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 18 (Standards for Requesting Contract Transfer)
"Standards prescribed by Presidential Decree" in Article 24-8 (1) 2 of the Act means any of the following cases: <Amended by Act No. 27037, Mar. 11, 2016>
1. Cases where it is not necessary for the Korea Deposit Insurance Corporation to support the mutual savings bank, to which a contract is transferred, or it is deemed that the burden that the Korea Deposit Insurance Corporation shall bear by supporting the mutual savings bank does not outweigh the burden that shall be borne if the bank becomes bankrupt;
2. Cases where it is deemed more profitable for the protection of depositors for the Korea Deposit Insurance Corporation or settling financial companies under Article 36-3 of the Depositor Protection Act (hereinafter referred to as “settling financial companies”) to take over a mutual savings bank or a contract is transferred to such institutions, etc. than a mutual savings bank goes bankrupt;
3. Cases where the heads of the local governments or another mutual savings bank in the relevant area proposes to acquire the mutual savings bank because it is deemed that the bankruptcy of the bank will seriously undermine the stability of the local economy, if the relevant mutual savings bank goes bankrupt.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 18-2 (Criteria and Procedure for Designation of Person Eligible for Novation Contracts)
(1) The Financial Services Commission shall, when it intends to designate a person who shall novate contracts pursuant to Article 24-8 (2) of the Act, make an advance decision on the following matters and shall hold a public presentation about such matters: Provided, That the Korea Deposit Insurance Corporation or a settling financial company may be designated as the person who shall novate contracts without holding a public presentation, if is anticipated that no one who is willing to take over contracts of a mutual savings bank because the losses estimated as a result of an actual inspection of assets exceeds 50/100 of its assets or it is considered difficult for a mutual savings bank to normalize its business within a short period of time even after its contracts are transferred to a third party: <Amended by Presidential Decree No. 27037, Mar. 11, 2016>
1. The amount that the person who shall novate contracts shall invest in or provide as financial aid to the mutual savings bank as a result of an actual inspection of assets of the mutual savings bank that shall transfer the contracts;
2. Terms and conditions of the financial aid provided by the Korea Deposit Insurance Corporation in the transfer of contracts;
3. Conditions of designation of the person who shall novate the contracts;
4. Other matters necessary for the designation of a person who shall novate contracts.
(2) When the Financial Services Commission intends to hold a public presentation under paragraph (1), it shall provide the public notice thereof in a daily newspaper in advance, and shall also inform the public of such fact via the information communications network, etc.
(3) Any person who desires to novate contracts from a mutual savings bank shall submit to the Financial Services Commission a document that states the amount that he/she intends to invest or provide as financial aid to the bank (hereinafter referred to as "application for acquisition") by no later than the date designated by the Financial Services Commission.
(4) The Financial Services Commission shall, upon receiving applications for acquisition designate a person who has proposed terms and conditions better than the criteria for designation under subparagraphs of paragraph (1) to the person who shall take over contracts among those who meet the following requirements: Provided, That the Commission may designate the Korea Deposit Insurance Corporation or a settling financial company concerned as the person who shall novate the contracts, if no one who is willing to novate the contracts in accordance with the criteria for the designation under subparagraphs of paragraph (1): <Amended by Presidential Decree No. 27037, Mar. 11, 2016>
1. The person shall have adequate credit in the aspects of its large shareholder's capability to raise funds, the amount of taxes paid, and the records of banking transactions;
2. The person shall have the capability of specialized management required for business normalization of the mutual savings bank;
3. Where an existing mutual savings bank is willing to novate contracts, its assets and the current status of its business management shall meet the standards for soundness prescribed by the Financial Services Commission.
(5) A person designated as the person who shall take over contracts pursuant to paragraph (4) shall take measures necessary for the contracts forthwith, including an actual inspection of assets of the mutual savings bank that shall transfer the contract and the establishment of a new mutual savings bank.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 2010]
 Article 18-3 (Application for Approval on Transfer of Contracts)
A mutual savings bank shall, when it intends to obtain approval on the transfer of contracts under Article 24-9 (3) of the Act, file an application for transfer with the Financial Services Commission along with the following documents attached thereto:
1. A copy of the agreement on the transfer of contracts;
2. Financial statements and supplemental documents of the parties to the agreement;
3. A list of contracts that shall be transferred between the parties;
4. Minutes of the general meetings of shareholders and other documents specified by the Financial Services Commission.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 19 (Public Notice of Transfer of Contracts)
Article 16 (2) shall apply mutatis mutandis to the public notice of transfer of contracts under Article 24-12 (2) of the Act.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 20 (Grounds for Requesting Nomination of Auditors)
"Grounds prescribed by Presidential Decree" in Article 24-14 of the Act means any of the following cases: <Amended by Presidential Decree No. 25178, Feb. 11, 2014; Presidential Decree No. 25844, Dec. 9, 2014; Presidential Decree No. 27091, Apr. 8, 2016; Presidential Decree No. 27289, Jun. 28, 2016>
1. Where any executive has been subject to the recommendation for dismissal (including the cases where such executive received a demand for dismissal under subparagraph 4 of the said paragraph as at the time when he/she was an employee) under Article 24 (1) 3 of the Act due to illegal or non-performing credit extension for the recent three years;
2. Where a mutual savings bank is under business guidance under Article 24-2 of the Act or three years have not elapsed since the mutual savings bank received business guidance;
3. Where three years have not elapsed since a mutual savings bank underwent business management under Article 24-3 of the Act;
4. Where a contract has transferred to a mutual savings bank;
5. Where it is deemed necessary to nominate an auditor under Article 4-3 of the Act on External Audit of Stock Companies because its income has been overstated or its loss has been understated, failing to satisfy standards prescribed by the Financial Services Commission;
6. Where it is ordered to take timely corrective measures under Article 10 (1) of the Act on the Structural Improvement of the Financial Industry or three years have not elapsed since it was ordered to take such measures;
7. Where its largest shareholder is changed and it is deemed particularly necessary to maintain the financial soundness of the mutual savings bank;
8. Where an auditor (including the member of the audit committee, other than an outside director; hereafter the same shall apply in this subparagraph) is dismissed before his/her term of office expires: Provided, That cases in which the auditor is dismissed due to causes attributable to himself/herself shall be excluded;
9. Where the equity capital ratio under Article 11-6 (1) 1 is below the ratio determined and publicly announced by the Financial Services Commission within 8/100.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 20-2 (Scope of Shareholders)
"Shareholders prescribed by Presidential Decree" in Article 24-15 (2) of the Act means large shareholders (including persons in special relationship with the largest shareholder).
[This Article Newly Inserted by Presidential Decree No. 20555, Jan. 18, 2008]
 Article 21 (Registration of Incorporation of Federation)
(1) The Federation shall prepare the articles of incorporation and register the incorporation of the Federation in the location of the principal office within two weeks from the date on which it obtains authorization from the Financial Services Commission.
(2) The registration of incorporation under paragraph (1) shall include the following matters:
1. Purposes;
2. Name;
3. Addresses of the principal office and branch offices;
4. Names and addresses of executives;
5. Methods of notification;
6. Other necessary matters.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 21-2 (General Meetings and Board of Directors of Federation)
(1) The Federation shall have the general meetings comprised of the President and members of the Federation under Article 25 (6) of the Act and the general meetings shall be classified into regular general meetings and extraordinary general meetings.
(2) Regular general meetings shall be convoked by the President of the Federation once each year after the date of settlement, and the extraordinary general meetings shall be convoked, as provided for in the articles of incorporation of the Federation.
(3) Matters falling under any of the following subparagraphs shall be matters for resolution by the general meeting:
1. Revisions to the articles of incorporation;
2. Appointment of executives;
3. Matters concerning the qualification suspension of members;
4. Approval of written reports on final accounts and audit reports;
5. Matters concerning the handling of surpluses;
6. Matters concerning the allocation of dues;
7. Matters referred to the general meeting after undergoing the resolution of the board of directors or obtaining consent from not less than 1/5 of members;
8. Other matters deemed necessary by the President of the Federation.
(4) The board of directors under Article 25 (6) of the Act shall be comprised of the President, senior executive director, and directors, and resolve on the following matters:
1. Matters concerning the finalization of business plans and the budget;
2. Matters concerning recommendation for correction, recommendation for improvement, the discipline of members, and dispute conciliation;
3. Large-scale investment and for-profit businesses;
4. Enactment and revision of operational manuals;
5. Enactment, revision, or repeal of regulations on the performance of duties;
6. Acquisition, change, or disposal of major assets;
7. Matters concerning the borrowing or lending of funds;
8. Matters concerning the management of reserve deposits;
9. Determination of the interest rates of deposits and loans;
10. Matters concerning the organization of office and the remuneration of employees;
11. Acceptance of the resignation of executives;
12. Matters concerning the establishment of branch offices;
13. Other matters referred to the board of directors, which are deemed important by the chairperson of the board of directors.
(5) Matters concerning the operation of the general meetings and the board of directors, other than those prescribed under paragraphs (1) through (4), shall be governed by the articles of incorporation of the Federation.
[This Article Newly Inserted by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 22 (Duties, etc. of Federation)
(1) "Duties prescribed by Presidential Decree" in Article 25-2 (1) 13 of the Act means the following duties: <Amended by Presidential Decree No. 25178, Feb. 11, 2014>
1. The following self-regulation duties for maintaining the sound and orderly conduct of business operations by mutual savings banks:
(a) Standardization of the methods for accounting and operation of mutual savings banks and guidance therefor;
(b) Analysis on the business management of mutual savings banks, and necessary guidance based thereon;
(c) Autonomous deliberation on advertising under Article 18-6 of the Act;
(d) Other affairs necessary for the protection of the rights and interests of customers;
2. Training for executives and employees of mutual savings banks;
3. Projects for the common interests of mutual savings banks;
4. Other projects necessary for mutual savings banks.
(2) Operational manuals under Article 25-2 (2) of the Act shall include the following: <Amended by Presidential Decree No. 25178, Feb. 11, 2014>
1. Matters concerning the income and operation of deposits and the deposits for reserve;
2. Matters concerning loans and the purchase of bills;
3. Matters concerning the guarantee of payment;
4. Matters concerning the human resources and organization necessary for performing duties prescribed in paragraph (1) 1;
5. Other matters important for performing duties.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 23 (Articles of Incorporation of Federation)
Matters to be included in the articles of association of the Federation under Article 25-3 (1) of the Act shall be as follows:
1. Purposes;
2. Name and address of a principal office;
3. Matters concerning executives and employees;
4. Matters concerning the rights and obligations of members;
5. Matters concerning duties and the performance thereof;
6. Matters concerning dues;
7. Matters concerning the general meeting and the board of directors;
8. Matters concerning accounting;
9. Matters concerning the method of public notification.
10. Other necessary matters.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 23-2 (Composition, etc. of Directors of Federation)
(1) Executives under Article 25-4 (1) of the Act shall be elected by the general meeting, in accordance with the articles of incorporation of the Federation: Provided, That a senior executive director and an expert director under paragraph (2) 2 shall be elected by the general meeting at the recommendation of the president. <Amended by Presidential Decree No. 25178, Feb. 11, 2014>
(2) Directors of the Federation shall be comprised as classified in the following subparagraphs: <Amended by Presidential Decree No. 25178, Feb. 11, 2014>
1. Member directors (referring to part-time directors elected from among the representatives of mutual savings banks): Not more than six persons;
2. Expert directors (referring to directors with specialized knowledge and experience in finance, other than the representatives of mutual savings banks): At least four persons.
(3) Matters concerning the composition of executives and selection methods thereof, other than those prescribed in paragraphs (1) and (2), shall be governed by the articles of incorporation of the Federation.
[This Article Newly Inserted by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 24 (Limitation, etc. on Borrowings)
(1) Pursuant to Article 25-9 of the Act, the Federation may borrow loans from the following persons: <Amended by Presidential Decree No. 23283, Nov. 1, 2011>
1. The Bank of Korea;
2. Banks under the Banking Act;
3. The Korea Development Bank under the Korea Development Bank Act;
4. The Industrial Bank of Korea under the Industrial Bank of Korea Act;
5. Deleted; <by Presidential Decree No. 25945, Dec. 30, 2014>
6. The National Agricultural Cooperative Federation under the Agricultural Cooperatives Act;
7. The National Federation of Fisheries Cooperatives under the Fisheries Cooperatives Act;
8. Trust business operators under the Financial Investment Services and Capital Markets Act;
10. The Korea Deposit Insurance Corporation;
12. Other persons designated by the Financial Services Commission.
(2) The maximum limit on loans that the Federation may borrow shall be 30/100 of the aggregate amount of deposits and installment deposits, etc. of mutual savings banks as of the borrowing date.
(3) When the Federation intends to borrow funds, it shall submit documents stating the following matters to the Financial Services Commission and obtain approval from the Financial Services Commission: Provided, That if it has obtained approval of limits on borrowings from the Financial Services Commission, it may borrow from time to time within the approved limit:
1. Reasons of borrowings;
2. The amounts of borrowing or limits on borrowings;
3. Methods of repaying borrowings;
4. Other necessary matters.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 24-2 (Registration of Appointment of Agent)
The Federation Chairperson shall, when he/she appoints his/her agent in accordance with Article 25-10 of the Act, complete the registration of the following details at the registry office having jurisdiction over the Federation's principal place of business. The foregoing shall also apply to a revision to any registered description:
1. Name and address of the agent;
2. Details of restriction on the agent's authority, if there is such restriction.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 25 (Vicarious Exercise of Authority)
(1) When the Financial Services Commission requires the Governor of the Financial Supervisory Service to exercise its authority on its behalf pursuant to Article 34-2 (1) of the Act, it shall determine the extent of the authority that shall be exercised on its behalf and shall notify the Financial Supervisory Service, mutual savings banks, the Federation, and the Korea Deposit Insurance Corporation of such authority in writing.
(2) When the Governor of the Financial Supervisory Service exercises authority on behalf of the Financial Services Commission pursuant to paragraph (1), the Financial Services Commission may order him/her to take necessary corrective measures, when such exercise of authority is deemed to undermine the protection of customers of the mutual savings bank and financial order.
(3) When the Governor of the Financial Supervisory Service completes the exercise of authority under paragraph (1) on behalf of the Financial Services Commission, it shall report such fact to the Financial Services Commission without delay.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 26 (Entrustment of Authority)
(1) The Financial Services Commission shall entrust the authority concerning the following matters to the Governor of the Financial Supervisory Service under Article 35 (1) of the Act: <Amended by Presidential Decree No. 23283, Nov. 1, 2011; Presidential Decree No. 25178, Feb. 11, 2014; Presidential Decree No. 25844, Dec. 9, 2014; Presidential Decree No. 27414, Jul. 28, 2016>
1. Examination of requirements for authorization under Article 6-2 of the Act;
2. Authorization for the establishment of a branch office, etc. under the proviso to Article 7 (1) and Article 7 (2) of the Act;
3. Examination of requirements for authorization under Article 10 (1) of the Act;
4. Acceptance of reports under Article 10-2 (1) 2 through 5 of the Act and corrective orders and recommendation for supplementation under Article 10-2 (2) of the Act;
5. Acceptance of reports under Article 10-2 (3) 1 through 3 and 7 of the Act;
5-2. Deleted. <by Presidential Decree No. 27414, Jul. 28, 2016>
6. Examination of requirements for approving the acquisition, etc. of stocks under Article 10-6 (1) or (2) of the Act;
7. Examination of requirements for the maintenance of eligibility for large shareholders under the former part of Article 10-6 (3) of the Act and requests for data or information under the latter part of Article 10-6 (3) of the Act;
7-2. Confirmation of the compliance with an order to satisfy the requirements for the maintenance of eligibility for large shareholders and an order to dispose of shares under Article 10-6 (6) and (8) of the Act;
8. Approval prescribed in Article 11 (1) 16 of the Act;
9. Approval for the extension of a period under Article 12 (6) of the Act and acceptance of, approval for and notification of a detailed plan under Article 12 (7) of the Act;
10. Acceptance of reports under Article 12-2 (2) and (3) of the Act
11. Approval for exception to the limit on borrowings under the proviso to Article 17 of the Act;
11-2. Approval under the proviso to Article 18-2 (3) of the Act;
12. Acceptance of reports on the enactment or revision of terms and conditions under the main sentence of Article 18-3 (1) of the Act, the acceptance of reports under the proviso to Article 18-3 (1) of the Act, the acceptance of reports on the enactment or revision of standardized agreements under Article 18-3 (4) of the Act and an order to revise terms and conditions or standardized agreements under Article 18-3 (6) of the Act;
13. Notification of terms and conditions or standardized agreements under the former part of Article 18-3 (5) of the Act to the Fair Trade Commission;
14. Supervisory orders under Article 22 (2) of the Act (limited to a supervisory order for corrective measures, where such corrective measures are deemed necessary as a result of inspection under Article 23 of the Act or the analysis and evaluation of data);
14-2. Analysis and evaluation of the actual status of management under Article 22-2 (3) of the Act;
15. Requests for the submission of materials under Article 22-4 (1) of the Act;
16. Payment of rewards under Article 23-3 (4) of the Act;
17. Measures under Article 24 (1) 1 of the Act;
17-2. Approval under Article 4 (3) of the Addenda to the partially amended Mutual Savings Banks Act (Act No. 12100) and the acceptance of a detailed plan prescribed in paragraph (4) of the same Article;
18. Recognition of the equity capital of a mutual savings bank that has been promoting management normalization under Article 3 (2) 1;
19. Approval for contracts on the transfer or acquisition of real estate, which are to be concluded with large shareholders, etc. under subparagraph 7 of Article 8-2;
19-2. Recognition under Article 9-2 (2) 4, subparagraph 3 of Article 9-3, and Article 11-3 (2) 4;
20. and 21. Deleted. <by Presidential Decree No. 27414, Jul. 28, 2016>
(2) The Financial Services Commission shall entrust the authority concerning the following matters to the Chairperson of the Federation under Article 35 (1) of the Act:
1. Acceptance of reports on revisions to the articles of incorporation, corrective orders related thereto and recommendation for supplementation under Article 10-2 (1) 1 and (2) of the Act;
2. Acceptance of reports under Article 10-2 (3) 4 and 5 of the Act;
3. Inspection of matters specified by the Financial Services Commission and requests for correction, from among the authority of the Financial Services Commission under Article 22 of the Act;
4. Determination of the proportion of assets for reserve under Article 11 (1) 2 and the methods of holding such assets.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 26-2 (Handling of Sensitive Information and Personally Identifiable Information)
(1) To conduct the following affairs, the Financial Services Commission (or any person who is entrusted with the affairs of the Financial Services Commission pursuant to Article 38-7 (3) of the Act or Article 26 of this Decree) or the Governor of the Financial Supervisory Service may, in extenuating circumstances, handle information that corresponds to any criminal history record prescribed in subparagraph 2 of Article 18 of the Enforcement Decree of the Personal Information Protection Act, and materials in which any resident registration number, passport number, or alien registration number is stated pursuant to subparagraph 1, 2, or 4 of Article 19 of the same Decree: <Amended by Presidential Decree No. 27414, Jul. 28, 2016>
1. Affairs relating to any authorization, etc. prescribed in Articles 6, 7, 10 and 24-9 of the Act;
2. Affairs relating to any reporting, reports, etc. prescribed in Articles 10-2 and 12-2 of the Act;
3. Affairs relating to any approval, examination, etc. prescribed in Articles 10-6, 11 (1) 15, and 12 of the Act;
4. Affairs relating to any supervision, measures subsequent thereto, etc. prescribed in Article 22 of the Act;
5. Affairs relating to the submission of any material or business report, etc. prescribed in Articles 22-4 and 22-5 of the Act;
6. Affairs relating to any inspection, measures subsequent thereto, etc. prescribed in Article 23 of the Act;
7. Affairs relating to any administrative disposition, hearing, etc. prescribed in Articles 24, 29, 35-3, and 38 of the Act;
8. Affairs relating to any business guidance, measures subsequent thereto, etc. prescribed in Article 24-2 of the Act;
9. Affairs relating to any business administration, measures subsequent thereto, etc. prescribed in Article 24-3 of the Act;
10. Affairs relating to the imposition and collection of any penalty surcharge prescribed in Articles 38-2 through 38-7 of the Act;
11. Affairs relating to any approval, etc. prescribed in subparagraph 7 of Article 8-2;
12. Deleted. <by Presidential Decree No. 27414, Jul. 28, 2016>
(2) Where it is unavoidable to perform self-regulation duties provided for in Article 22 (1) 1, the President of the Federation may treat data which include a resident registration number, passport number, or foreign registration number referred to in subparagraph 1, 2 or 4 of Article 19 of the Enforcement Decree of the Personal Information Protection Act. <Newly Inserted by Presidential Decree No. 25178, Feb. 11, 2014>
(3) A mutual savings bank may handle materials containing a resident registration number, a passport number, or an alien registration number under subparagraph 1, 2, or 4 of Article 19 of the Enforcement Decree of the Personal Information Protection Act, where inevitable to perform the following affairs: <Amended by Presidential Decree No. 25532, Aug. 6, 2014>
1. Affairs concerning safeguard deposit under Article 11 (1) 7 of the Act;
2. Affairs concerning execution of collection and payment as an agent under Article 11 (1) 8 of the Act;
3. Affairs concerning incidental services approved by the Financial Services Commission under Article 11 (1) 16 of the Act.
[This Article Newly Inserted by Presidential Decree No. 23488, Jan. 6, 2012]
 Article 27 Deleted. <by Presidential Decree No. 27414, Jul. 28, 2016>
 Article 28 Deleted. <by Presidential Decree No. 22401, Sep. 20, 2010>
 Article 29 (Credit Extension to Large Shareholders)
(1) "Deposits, etc. prescribed by Presidential Decree" in the proviso to the main sentence of Article 37 (1) of the Act means any of the following subparagraphs:
1. Deposits in the Federation by a mutual savings bank if the Federation becomes the large shareholder of such mutual savings bank under Article 6-3 (4);
2. Amounts deposited by a mutual savings bank in accounts opened in a financial institution, which is a large shareholder of the relevant mutual savings bank, for the payment of principal and interests of loans, for which three business days have not elapsed since the date of deposit;
3. Margin money deposited by a mutual savings bank in a financial institution, which is a large shareholder of the relevant mutual savings bank, and amounts deposited in accounts for securities deposit, etc. for the transaction of securities.
(2) "Credit extension prescribed by Presidential Decree" in the proviso to the main sentence of Article 37 (1) of the Act means any of the following subparagraphs:
1. Credit extended to a person falling under Article 37 (1) 1 through 3 of the Act by taking his/her deposits, etc. in the relevant mutual savings bank as security;
2. Credit extended to a large shareholder under Article 37 (1) 1 of the Act and persons in special relationship with him/her under Article 30 (2) 5 through 8 by taking their deposits in the relevant mutual savings bank as security;
3. Credit extended to employees of the mutual savings bank for their welfare, falling under the following items: Provided, That it shall not exceed the limit of 15/100 of the equity capital of the bank, and the aggregate of credit extended to an individual borrower under items (a) through (c) shall not exceed 50 million won:
(a) Ordinary loan up to 20 million won;
(b) Housing loan up to 50 million won;
(c) Loan up to 50 million won for setting off damage sustained by the mutual savings bank due to acts of the relevant employee.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 30 (Scope of Large Shareholders, etc.)
(1) "Shareholders prescribed by Presidential Decree" in Article 37 (1) 1 of the Act means shareholders who hold at least 2 percent of the total number of voting shares issued by a mutual savings bank.
(2) "Relatives or a person in a special relationship prescribed by Presidential Decree" in Article 37 (1) 3 of the Act means any of the following persons: <Amended by Presidential Decree No. 24635, Jun. 21, 2013>
1. A lineal ascendant, descendant, spouse of the large shareholder, the parent of the spouse of the large shareholder, a sibling of the large shareholder or the spouse of a sibling, or the spouse of a lineal descendant of the large shareholder, if the large shareholder under Article 37 (1) 1 of the Act is an individual;
2. Any of the following persons if the large shareholder under Article 37 (1) 1 of the Act is a corporation:
(a) An executive of the relevant corporation, a lineal ascendant, descendant or spouse of an executive, a parent of the spouse of an executive, and the spouse of a lineal ascendant or descendant of an executive;
(b) A person who holds or has contributed at least 30 percent of the total number of shares issued or total amounts of investment in the relevant corporation, etc.;
3. A lineal ascendant, descendant or spouse of an executive (referring to the executive of a mutual savings bank; hereafter the same shall apply in this subparagraph), a parent of the spouse of an executive or the spouse of a lineal descendant of an executive;
4. The spouse of an employee of a mutual savings bank;
5. A corporation, for which at least 30 percent of shares or total amount of investment are held or have been contributed by a person who holds or has contributed at least 30 percent of the total number of shares issued (which shall be limited to voting shares; hereafter the same shall apply in this paragraph) or total amount of investment in a mutual savings bank, or a corporation, for which at least 30 percent of shares or total capital are held or have been invested by such corporation;
6. A corporation in which a person, who holds or has invested at least 30 percent of total number of shares or total amount of investment in a mutual savings bank, holds office as an executive;
7. A corporation that holds or has contributed at least 30 percent of the total number of shares or total amount of investment in a corporation falling under subparagraph 5 or 6;
8. A corporation, etc. the management of which is deemed substantially controlled by any of the following persons, which meets criteria prescribed by the Governor of the Financial Supervisory Service upon obtaining approval from the Financial Services Commission:
(a) A large shareholder under Article 37 (1) 1 of the Act;
(b) An executive of a mutual savings bank;
(c) A mutual savings bank.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 30-2 (Guidelines, etc. for Imposition of Penalty Surcharges)
(1) Penalty surcharges under Article 38-2 of the Act shall be imposed in accordance with the following guidelines pursuant to Article 38-3 (1) of the Act: <Amended by Presidential Decree No. 25178, Feb. 11, 2014>
1. If a violation falls under any of the following items, the amount of a penalty surcharge to be imposed may be increased:
(a) If the amount of the violation exceeds 5/100 of the equity capital;
(b) If such violation has persisted for one year or longer or has recurred on three or more occasions;
2. If a violation falls under any of the following items, a penalty surcharge may be exempted or abated:
(a) If the violation is minor;
(b) If the violation has been corrected promptly.
(2) When the Financial Services Commission intends to impose a penalty surcharge pursuant to Article 38-2 of the Act, it shall issue a written notice, clearly stating the category of the violation involved and the amount of penalty surcharge as well as the following matters and demanding the payment therefor. The foregoing shall also apply where it issues a notice extending the deadline for payment under Article 38-6 (1) of the Act or demanding payment of the penalty surcharge in accordance with a decision on installment payments:
1. Issuance number;
2. Person liable for penalty surcharge;
3. Date of violation;
4. Category of violation;
5. Amount of penalty surcharge due;
6. Deadline for payment;
7. Receiving institution.
(3) Any person who has received a notice under paragraph (2) shall pay the penalty surcharge to the receiving institution designated by the Financial Services Commission within 60 days from the date the notice was served.
(4) Detailed matters concerning the imposition of penalty surcharges, other than those referred to in paragraphs (1) through (3), shall be prescribed by the Financial Services Commission.
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 30-3 (Extension of Payment Deadline and Payment in Installments)
(1) The extension of payment deadline under Article 38-6 (1) of the Act shall not exceed one year from the following day of such payment deadline.
(2) Where payment in installments is permitted in accordance with Article 38-6 (1) of the Act, the interval between deadlines for payment in installments shall not exceed six months and the number of installments shall not exceed three times.
(3) The extension of payment deadline or application for payment in installments under Article 38-6 (2) of the Act shall be made by using an application form stating the following matters. In such cases, evidentiary documents shall be accompanied for matters falling under subparagraph 6:
1. Issue number of payment notices on penalty surcharges;
2. Date of violation;
3. Type of violation;
4. Amounts of penalty surcharges;
5. Payment deadline;
6. Grounds for filing an application for the extension of payment deadline or payment in installments.
(4) Detailed matters concerning the extension of payment deadline under paragraph (1), the payment in installments under paragraph (2), and the application form referred to in paragraph (3) shall be determined and publicly announced by the Financial Services Commission. <Amended by Presidential Decree No. 25178, Feb. 11, 2014>
(5) "Grounds prescribed by Presidential Decree" in Article 38-6 (3) 4 of the Act means cases where the Financial Services Commission deems that the extension of payment deadline or payment in installments is unnecessary due to changes in circumstances surrounding a person on whom penalty surcharges are imposed, including property status.
(6) Security under the latter part of Article 38-6 (1) of the Act shall be held in any of the following methods pursuant to Article 38-6 (4) of the Act:
1. Letter of guarantee, in which payment is guaranteed by banks under the Banking Act or insurance companies engaged in guarantee insurance business under Article 4 (1) 2 (d) of the Insurance Business Act;
2. Deposits under the Deposit Act. In such cases, subjects of deposit shall be limited to securities falling under any of the subparagraphs of Article 11 (2).
[This Article Wholly Amended by Presidential Decree No. 22401, Sep. 20, 2010]
 Article 30-4 (Additional Charges)
"Additional charges, as prescribed by Presidential Decree" in Article 38-7 (1) of the Act means an amount calculated by applying 6/100 per annum to the overdue penalty surcharge. In such cases, the period for the imposition of penalty surcharges shall not exceed 60 months. <Amended by Presidential Decree No. 22719, Mar. 22, 2011>
[This Article Newly Inserted by Presidential Decree No. 20555, Jan. 18, 2008]
 Article 31 (Reexamination of Regulations)
With respect to the following matters, the Financial Services Commission shall review their relevance and take necessary actions such as improvement, etc. every three years from the following base date (referring to until the day before the base date of every third year): <Amended by Presidential Decree No. 25178, Feb. 11, 2014>
1. Requirements for the prevention of financial accidents under the main sentence of Article 7-4 (2) and attached Table 2: January 1, 2014;
1-2. Conditions for conducting installment financial business provided for in Article 7-5: February 14, 2014;
2. Matters to be observed by a mutual savings bank when it conducts its duties provided for in Article 8-2: January 1, 2014;
3. Limits on the extension of credit to individual borrowers, etc. provided for in Article 9: January 1, 2014;
4. Conditions for prohibited activities provided for in Article 11-2: February 14, 2014.
[This Article Newly Inserted by Presidential Decree No. 25050, Dec. 30, 2013]
ADDENDA
Article 1 (Enforcement Date)
This Decree shall enter into force on April 1, 1998.
Article 2 (Repeal of Other Statute)
The Enforcement Decree of the Credit Management Fund Act is hereby repealed.
Article 3 (Transitional Measures concerning the Scope of Small Enterprises)
The businesses specified by the Minister of Finance and Economy pursuant to the former provisions of subparagraph 3 (g) of Article 2 as of the enforcement date of this Decree shall be deemed as those specified by the Financial Services Commission pursuant to the amended provisions of Article 2 (1) 3 (g).
Article 4 (Transitional Measures concerning the Scope of Securities)
Bonds acquired in accordance with the former provisions of subparagraph 6 of Article 11 as of the enforcement date of this Decree shall be deemed securities acquired in accordance with the amended provisions of Article 11 (2) until arrival of the maturity date for redemption.
Article 5 (Relations to Other Statutes)
A citation of the former Enforcement Decree of the Credit Management Fund Act or any provision thereof by any other statute enforceable at the time this Decree enters into force, if any, shall be deemed to be a citation of a corresponding provision hereof in lieu of the former provisions, if such corresponding provisions exist herein.
ADDENDUM <Presidential Decree No. 16266, Apr. 30, 1999>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 16323, May 24, 1999>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 4 Omitted.
ADDENDA <Presidential Decree No. 16709, Feb. 14, 2000>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 Omitted.
ADDENDUM <Presidential Decree No. 16859, Jun. 27, 2000>
This Decree shall enter into force on the date of its promulgation.
ADDENDUM <Presidential Decree No. 17265, Jun. 30, 2001>
This Decree shall enter into force on the date set by Presidential Decree pursuant to the main text of Article 1 of Addenda of the Amendment (Act No. 6429) to the Mutual Credit Unions Act: Provided, That the amended provisions of Articles 5, 7, 7-2, 7-3, 12-2, 16, 20, 26, 29, and 30 shall enter into force on the date of its promulgation, but the term "mutual savings bank" in such amended provisions shall be deemed "mutual credit union" until the date this Act enters into force set pursuant to the said main text.
ADDENDUM <Presidential Decree No. 17405, Nov. 7, 2001>
This Decree shall enter into force on the date of its promulgation: Provided. That the term of "mutual savings bank" in the amended provisions of paragraph (2) 4 of Article 3-2 shall be deemed "mutual credit union" until on the date set by Presidential Decree pursuant to the main text of Article 1 of Addenda of the Amendment (Act No. 6429).
ADDENDA <Presidential Decree No. 18146, Nov. 29, 2003>
Article 1 (Enforcement Date)
This Decree shall enter into force on Nov. 30, 2003. (Proviso Omitted.)
Articles 2 through 15 Omitted.
ADDENDA <Presidential Decree No. 18297, Feb. 28, 2004>
Article 1 (Enforcement Date)
This Decree shall enter into force on March 1, 2004.
Articles 2 through 5 Omitted.
ADDENDUM <Presidential Decree No. 18305, Mar. 9, 2004>
This Decree shall enter into force on March 12, 2004.
ADDENDA <Presidential Decree No. 18736, Mar. 8, 2005>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 through 5 Omitted.
ADDENDUM <Presidential Decree No. 19464, May 3, 2006>
This Decree shall enter into force three months after the date of its promulgation.
ADDENDA <Presidential Decree No. 20555, Jan. 18, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on January 20, 2008: Provided, That the amended provisions of attached Tables 1 and 2 shall enter into force on March 20, 2008 respectively.
Article 2 (Applicability to Requirements for Large Shareholders)
The amended provisions of attached Table 1 shall be applicable to the applications filed for the license under Article 6 (1) with the Financial Services Commission on or after the date this Decree enters into force. <Amended by Presidential Decree No. 20653, Feb. 29, 2008>
Article 3 (Applicability to Requirements for Approval on Changes in Large Shareholders)
The amended provisions of attached Table 2 shall be applicable to applications filed for approval under Article 10-2 (4) of the Act on or after the date this Decree enters into force.
ADDENDA <Presidential Decree No. 20653, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation: Provided, That the amended parts of the Presidential Decrees amended in accordance with Article 2 of the Addenda, which were promulgated before the date this Decree enters into force, but their enforcement date have not yet arrived, shall enter into force on the date each the Presidential Decree enters into force.
Article 2 Omitted.
ADDENDA <Presidential Decree No. 20947, Jul. 29, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on February 4, 2009. (Proviso Omitted.)
Articles 2 through 28 Omitted
ADDENDA <Presidential Decree No. 21059, Sep. 30, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Applicability to Standards for Authorization for Establishment of Branch Office)
The amended provision of Article 5 (1) 3 shall apply beginning from a case where the first measures corresponding to warnings or partial suspension of business within six months have been taken after this Decree enters into force.
Article 3 (Applicability to Establishment of Branch Office outside Business Area)
The amended provisions of Article 5-2 shall apply beginning from the first application for approval for acquisition, etc. of shares under paragraph (2) of the same Article after this Decree enters into force.
ADDENDA <Presidential Decree No. 21518, May 29, 2009>
Article 1 (Enforcement Date)
This Decree shall enter into force on June 1, 2009.
Articles 2 and 3 Omitted.
ADDENDA <Presidential Decree No. 21765, Oct. 1, 2009>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 and 5 Omitted.
ADDENDUM <Presidential Decree No. 22248, Jun. 30, 2010>
This Decree shall enter into force on July 1, 2010.
ADDENDA <Presidential Decree No. 22401, Sep. 20, 2010>
Article 1 (Enforcement Date)
This Decree shall enter into force on September 23, 2010.
Article 2 (Applicability to Credit Extension of Call Loan Transactions through Federation)
The amended provisions of Article 3-2 (2) 4 shall apply from the first call loan transaction after this Decree enters into force.
Article 3 (Applicability to Standards for Authorization for Establishment of Local Offices Specializing in Credit Finance)
The amended provisions of Article 6-3 (7) shall apply from the first application for authorization for the establishment of a local office specializing in credit finance after this Decree enters into force.
Article 4 (Applicability to Requirements for Approval of Changes in Major Shareholders)
The amended provisions of attached Table 2 shall apply from the first application for approval of stock acquisition, etc. after this Decree enters into force.
Article 5 (Transitional Measures concerning Citation of other Acts)
"Banks under the Banking Act" shall be deemed "financial institutions under the Banking Act", among the amended provisions of Article 9 (6) 2 and 3, Article 24 (1) 2, and Article 30-3 (6) 1 until November 17, 2010.
ADDENDUM <Presidential Decree No. 22719, Mar. 22, 2011>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 23283, Nov. 1, 2011>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Articles 2 (Transitional Measures concerning Limits on Extensions of Credit to Individual Borrowers, etc.)
(1) Any mutual savings bank that has offered credit extensions in excess of the limits under the amended provisions of Article 9 (1) as at the time this Decree enters into force shall comply with the same provisions within two years after this Decree enters into force: Provided, That the mutual savings bank may, in extenuating grounds including the scale of any credit extension, extend such period by up to one more year (where the term of the credit extension does not mature even though the mutual savings bank extends such period by up to one more year, any period determined by the Governor of Financial Supervisory Service separately) after obtaining approval from the Governor of the Financial Supervisory Service.
(2) Any mutual savings bank that intends to obtain approval under the proviso to paragraph (1) shall, by three months before the period expires under the main sentence of paragraph (1), submit to the Governor of the Financial Supervisory Service a detailed plan for the compliance with the amended provisions of Article 9 (1), and the Governor of the Financial Supervisory Service shall, within one month upon receipt of the detailed plan, determine whether it grants the approval and notify the mutual savings bank thereof.
(3) Any mutual savings bank that failed to comply with the provisions of Article 9 (1), from among mutual savings banks which have obtained approval for the extension of period under the proviso to paragraph (1), shall make sure to comply with the same provisions from January 1 to December 31, 2015: Provided, That if there exists any unavoidable reason, such as credit offering, it may extend the period by one year upon approval from the Governor of the Financial Supervisory Service. <Newly Inserted by Presidential Decree No. 25844, Dec. 9, 2014>
(4) Any mutual savings bank that intends to obtain approval under the proviso to paragraph (3) shall, by three months before the period expires under the main sentence of the same paragraph (referring to the extended period in cases of the extension of period under the proviso to the same paragraph), submit to the Governor of the Financial Supervisory Service a detailed plan for the compliance with Article 9 (1), and the Governor of the Financial Supervisory Service shall, within one month upon receipt of the detailed plan, determine whether it grants the approval and notify the mutual savings bank thereof. <Newly Inserted by Presidential Decree No. 25844, Dec. 9, 2014>
ADDENDA <Presidential Decree No. 23488, Jan. 6, 2011>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted)
Article 2 Omitted.
ADDENDA <Presidential Decree No. 23644, Feb. 29, 2012>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation. (Proviso Omitted.)
Articles 2 through 4 Omitted.
ADDENDA <Presidential Decree No. 23987, Jul. 24, 2012>
Article 1 (Enforcement Date)
This Decree shall enter into force on July 26, 2012.
Articles 2 through 6 Omitted.
ADDENDA <Presidential Decree No. 24635, Jun. 21, 2013>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation: Provided, That the amended provisions of Article 14 (8) shall enter into force three months after the date of its promulgation.
Article 2 (Applicability to Payment of Rewards)
The amended provisions of Article 14 (8) shall apply beginning with a report or information received after the enforcement date under the proviso to Article 1 of Addenda.
Article 3 (Applicability to Prohibition against Credit Extension, etc. to Large Shareholders, etc.)
The amended provisions of Article 30 (2) 8 (c) shall apply beginning with an act, such as credit extension to a large shareholder, prohibited pursuant to Article 37 (1) of the Act after the enforcement date (hereinafter referred to as "enforcement date of this Decree") under the main sentence of Article 1 of Addenda.
Article 4 (Applicability to Requirements, etc. for Large Shareholders)
(1) The amended provisions of subparagraphs 1 (d) through (g), 2 (d), 3 (b), 4 (e), 5 (a) through (d) of attached Table 1 and the main sentence of subparagraph 1 of the remarks of the said Table shall apply beginning with cases where a mutual savings bank applies for approval pursuant to Article 6 (1) after this Decree enters into force.
(2) The amended provisions of the proviso to Article 7-4 (2), subparagraphs 1 (c), (e) and (f), 2 (d), 3 (b), 4 (d), 5 (b) through (d) of attached Table 2 and the remarks of the said Table shall apply beginning with cases where a mutual savings bank applies for approval for the acquisition or acquisition by transfer of stocks pursuant to Article 10-6 (1) of the Act after this Decree enters into force.
(3) The amended provisions of the proviso to Article 7-4 (6) and the remarks of attached Table 3 shall apply beginning with cases where the Financial Services Commission examines requirements for the maintenance of eligibility for a large shareholder pursuant to the former part of Article 10-6 (3) after this Decree enters into force.
Article 5 (Transitional Measures concerning Incumbent Outside Directors)
Notwithstanding the amended provision of Article 7-2 (4) 5, the former provision shall apply to an outside director falling under the amended provision of Article 7-2 (4) 5 until the date his/her term of office expires, who is an incumbent outside director as at the time this Decree enters into force.
ADDENDA <Presidential Decree No. 24697, Aug. 27, 2013>
Article 1 (Enforcement Date)
This Decree shall enter into force on August 29, 2013. (Proviso Omitted.)
Articles 2 through 13 Omitted.
ADDENDUM <Presidential Decree No. 25050, Dec. 30, 2013>
This Decree shall enter into force on January 1, 2014. (Proviso Omitted.)
ADDENDA <Presidential Decree No. 25178, Feb. 11, 2014>
Article 1 (Enforcement Date)
This Decree shall enter into force on February 14, 2014: Provided, That the amended provisions of Article 11-3 (3) through (5) shall enter into force on August 14, 2015.
Article 2 (Applicability to Application for Examination of Qualifications of Large Shareholders)
The amended provisions of the proviso to Article 7-4 (3) 1 shall apply beginning with the death of an existing shareholder after this Decree enters into force.
Article 3 (Applicability to Business Guidance)
The amended provisions of Article 15 (3) 1 shall apply beginning with a mutual savings bank which is granted the delay of timely corrective measures after this Decree enters into force.
Article 4 (Applicability to Requirements, etc. for Large Shareholders)
(1) The amended provisions of subparagraph 1 (f) of attached Table 1 shall apply beginning with cases where an application for authorization is filed pursuant to Article 6 (2) of the Act after this Decree enters into force.
(2) The amended provisions of subparagraph 1 (e) of attached Table 2 shall apply beginning with cases where an application for approval is filed pursuant to Article 10-6 (1) of the Act after this Decree enters into force.
(3) The amended provisions of subparagraph 1 (d) (iv) of attached Table 3 shall apply beginning with cases where an examination is conducted pursuant to Article 10-6 (3) of the Act after this Decree enters into force.
Article 5 (Transitional Measures concerning Directors of Federation)
(1) A senior executive director or an expert director who is holding office as at the time this Decree enters into force shall be deemed to have been elected by the general meeting at the recommendation of the President in accordance with the amended provisions of the proviso to Article 23-2 (1).
(2) Two directors with the shortest remaining term of office out of the member directors who are holding office as at the time this Decree enters into force shall be deemed expert directors elected by the general meeting at the recommendation of the President until the date their term of office expires in accordance with the amended provisions of the proviso to Article 23-2 (1).
Article 6 (Transitional Measures concerning Standards for Imposition of Penalty Surcharges)
Where the standards for the imposition of a penalty surcharge is applied to a violation committed before this Decree enters into force, notwithstanding the amended provisions of Article 30-2 (1), the former provisions shall apply.
ADDENDUM <Presidential Decree No. 25532, Aug. 6, 2014>
This Decree shall enter into force on August 7, 2014.
ADDENDUM <Presidential Decree No. 25844, Dec. 9, 2014>
This Decree shall enter into force on January 1, 2015.
ADDENDA <Presidential Decree No. 25945, Dec. 30, 2014>
Article 1 (Enforcement Date)
This decree shall enter into force on the date when the registration of acquisition was made under Article 4 (6) of the Addenda of the wholly amended Korea Industrial Bank Act (Act No. 12663).
Articles 2 through 5 Omitted.
ADDENDA <Presidential Decree No. 26205, Apr. 20, 2015>
Article 1 (Enforcement Date)
This decree shall enter into force on April 29, 2015.
Articles 2 and 3 Omitted.
ADDENDA <Presidential Decree No. 26600, Oct. 23, 2015>
Article 1 (Enforcement Date)
This decree shall enter into force on October 25, 2015. (Proviso Omitted.)
Articles 2 through 9 Omitted.
ADDENDA <Presidential Decree No. 27037, Mar. 11, 2016>
Article 1 (Enforcement Date)
This decree shall enter into force on the date of its promulgation.
Article 2 Omitted.
ADDENDUM <Presidential Decree No. 27091, Apr. 8, 2016>
This decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 27205, May 31, 2016>
Article 1 (Enforcement Date)
This decree shall enter into force on September 30, 2016. (Proviso Omitted.)
Articles 2 and 3 Omitted.
ADDENDUM <Presidential Decree No. 27289, Jun. 28, 2016>
This decree shall enter into force on June 30, 2016.
ADDENDA <Presidential Decree No. 27414, Jul. 28, 2016>
Article 1 (Enforcement Date)
This decree shall enter into force on August 1, 2016. (Proviso Omitted.)
Articles 2 through 4 Omitted.