ENFORCEMENT DECREE OF THE INDUSTRIAL BANK OF KOREA ACT
Wholly Amended by Presidential Decree No. 4207, Nov. 10, 1969
Amended by Presidential Decree No. 6715, May 31, 1973
Presidential Decree No. 8414, Jan. 18, 1977
Presidential Decree No. 9384, Mar. 23, 1979
Presidential Decree No. 9773, Feb. 15, 1980
Presidential Decree No. 11313, Dec. 31, 1983
Presidential Decree No. 13635, Apr. 29, 1992
Presidential Decree No. 14438, Dec. 23, 1994
Presidential Decree No. 15515, Nov. 29, 1997
Presidential Decree No. 16744, Mar. 4, 2000
Presidential Decree No. 19535, jun. 22, 2006
Presidential Decree No. 19806, Dec. 29, 2006
Presidential Decree No. 20653, Feb. 29, 2008
Presidential Decree No. 21173, Dec. 17, 2008
Presidential Decree No. 21969, Dec. 31, 2009
Presidential Decree No. 23488, Jan. 6, 2012
The purpose of this Decree is to prescribe matters delegated by the Industrial Bank of Korea Act (hereinafter referred to as the "Act") and those necessary for enforcement thereof. <Amended by Presidential Decree No. 19535, Jun. 22, 2006> [This Article Wholly Amended by Presidential Decree No. 13635, Apr. 29, 1992]
| Article 2 (Registration of Establishment) |
| (1) | The president of the Industrial Bank of Korea shall duly register its establishment within two weeks in a registry nearest the head office and within three weeks in registries nearest branches or sub-branches after authorization of the articles of incorporation under Article 2 (2) of the Addenda to the Act. |
| (2) | Registration of the establishment shall include the following matters: <Amended by Presidential Decree No. 15515, Nov. 29, 1997> |
| 3. | Location of the head office; |
| 4. | Locations of branches or sub-branches; |
| 5. | Total number of authorized shares to be issued; |
| 7. | Par value of each share; |
| 8. | The total number and class of shares issued, and contents and number of each class of shares; |
| 9. | The name, resident registration number, and domicile of the president; |
| 10. | Names and resident registration numbers of senior managing directors, directors and auditors; and |
| 11. | Procedures for public notice. |
| Article 3 (Registration of New Branch or Sub-branch) |
When a new branch or sub-branch has been established, the Industrial Bank of Korea shall register the following:
| 1. | Location and establishment date of each branch or sub-branch within two weeks after its establishment in the registry nearest the head office; and |
| 2. | Matters as mentioned in Article 2 (2) 1 to 3, 9 and 11 within three weeks after its establishment in the registry nearest the new branch or sub-branch concerned. |
[This Article Wholly Amended by Presidential Decree No. 15515, Nov. 29, 1997]
| Article 4 (Registration of Movement) |
| (1) | The Industrial Bank of Korea shall, if it moves its head office, register the new location and date of movement, within two weeks after such movement, in the registry nearest the former head office, and the matters as mentioned in each subparagraph of Article 2 (2) in the registry nearest the new head office. |
| (2) | The Industrial Bank of Korea shall, if it moves a branch or sub-branch, register the new location and the date of movement, within two weeks after such movement, in the registry nearest the head office and the former branch or sub-branch, and matters as mentioned in Article 2 (2) 1 to 3, 9 and 11 in the registry nearest the new branch or sub-branch. |
[This Article Wholly Amended by Presidential Decree No. 15515, Nov. 29, 1997]
| Article 5 (Change of Registration) |
In case where the matters as mentioned in each subparagraph of Article 2 (2) have changed, such change shall be registered within two weeks in the registry nearest the head office. In this case, if the matters as mentioned in Article 2 (2) 1 to 3, 9 or 11 have changed, such change shall be also registered within three weeks in registries nearest branches or sub-branches. [This Article Wholly Amended by Presidential Decree No. 15515, Nov. 29, 1997]
| Article 6 (Registration of Proxy) |
When the president of the Industrial Bank of Korea has designated the proxies provided for in Article 30 of the Act, the following matters shall be registered within two weeks in registries nearest the head office, branches, and subbranches. The same shall apply where any change has occurred relating to matters of registration: <Amended by Presidential Decree No. 15515, Nov. 29, 1997> | 1. | A name, resident registration number and domicile of a proxy; |
| 2. | Deleted; and <by Presidential Decree No. 15515, Nov. 29, 1997> |
| 3. | Details of limited authority, if any, of a proxy. |
| Article 7 Deleted. <by Presidential Decree No. 13635, Apr. 29, 1992> |
| Article 8 (Reckoning of Registration Period) |
If any of items to be registered under Articles 2 through 6 requires the authorization of the Financial Services Commission, the registration period shall be reckoned from the arrival date of such authorization. <Amended by Presidential Decree No. 20653, Feb. 29, 2008>
| (1) | The Industrial Bank of Korea shall be registered in the district court, its branch court or the registry having jurisdiction over the area in which the head office, a branch or a sub-branch concerned is located. <Amended by Presidential Decree No. 15515, Nov. 29, 1997> |
| (2) | The registry shall publicly announce the registered matters without delay. |
| (3) | Each registry shall keep the register of the Industrial Bank of Korea. |
| Article 10 (Documents Accompanying for Registration) |
A registration form provided for in Articles 2 through 6 shall be accompanied by the following documents: | 1. | For registration of the establishment provided for in Article 2 (2), the articles of incorporation of the Industrial Bank of Korea, a certified copy of the authorization of the articles of incorporation as provided for in Article 2 (2) of the Addendum to the Act, documents certifying subscription of the paid-in capital and documents certifying that appointment of the president of the Industrial Bank of Korea is consistent with the provisions of Article 26 (1) of the Act; |
| 2. | For registration of the establishment of a new branch or sub-branch as provided for in Article 3, documents certifying the establishment of such branch or sub-branch; |
| 3. | For registration of movement provided for in Article 4, documents certifying such movement of the head office, branch, or sub-branch; |
| 4. | For registration of changes in any substantial part of registered matters under the provisions of Article 5, documents certifying such changes; and |
| 5. | For registration pertaining to the appointment of proxies under the provisions of Article 6, documents certifying that the appointment of the proxy concerned is consistent with the provisions of Article 30 of the Act and; if the authority of the proxy concerned has been limited as provided for in subparagraph 3 of Article 6, other documents verifying the said limitation of the authority of the proxy. |
| Article 11 Deleted. <by Presidential Decree No. 13635, Apr. 29, 1992> |
| Article 12 Deleted. <by Presidential Decree No. 6715, May 31, 1973> |
| Article 13 Deleted. <by Presidential Decree No. 13635, Apr. 29, 1992> |
| Articles 13-2 and 13-3 Deleted. <by Presidential Decree No. 15515, Nov. 29, 1997> |
| Article 14 (Loan Supervision) |
The term "necessary measures" in Article 36 (1) of the Act shall refer to any of the following subparagraphs: <Amended by Presidential Decree No. 13635, Apr. 29, 1992> | 1. | Inspection of the borrower’s use of the loan and the status of his properties by employees of the Industrial Bank of Korea; |
| 2. | Request for the borrower’s submission of documents required for inspection as provided for in subparagraph 1 and summoning of witnesses for a hearing; and |
| 3. | Request to the borrower for reports to the pertinent authorities on, or rectification of, if any, unjustifiable disposition of loan funds. |
| Article 15 Deleted. <by Presidential Decree No. 9384, Mar. 23, 1979> |
| Article 16 (Contract for Agent) |
| (1) | The Industrial Bank of Korea shall, when it desires to have a financial institution act as its agent, enter into a contract with that institution. |
| (2) | The contract in paragraph (1) shall be entered into between the president of the Industrial Bank of Korea, in accordance with the provisions of the articles of incorporation of the Industrial Bank of Korea, and the head of the financial institution concerned. |
| Article 17 Deleted. <by Presidential Decree No. 16744, Mar. 4, 2000> |
The Small and Medium Business Finance Bonds shall be issued in bearer form: Provided, That upon the request of a subscriber or holder, the Bonds in bearer form may be replaced with those in registered form and vice versa. <Amended by Presidential Decree No. 13635, Apr. 29, 1992>
| Article 19 (Public Subscription of Bonds and Application) |
| (1) | Any one desiring to subscribe to the Small and Medium Business Finance Bonds shall indicate the total amount of bonds and his address, write his name and affix his seal on two copies of the Bond subscription application. |
| (2) | The president of the Industrial Bank of Korea shall prepare the application for the Bond subscription, and it shall describe the following: |
| 1. | The name of the Industrial Bank of Korea; |
| 2. | Total amount of the Small and Medium Business Finance Bonds issued; |
| 3. | Face value of the Small and Medium Business Finance Bonds by denomination; |
| 4. | Interest rate of the Small and Medium Business Finance Bonds; |
| 5. | A redemption procedure and time of the principal; |
| 6. | Interest payment procedure and time; |
| 7. | Issue amount of price or minimum price of the Small and Medium Business Finance Bonds; |
| 8. | Total amount of capital and reserves of the Industrial Bank of Korea; |
| 9. | If the issue is for redemption of old bonds, as provided for in Article 36-3 of the Act, the issue’s relevant details; and |
| 10. | Total amount of outstanding bonds. |
| (3) | Where the minimum bond price of the Small and Medium Business Finance Bonds has been determined, an applicant shall decide the application amount on the Small and Medium Business Finance Bonds application. |
| Article 20 (Bond Total Amount) |
The Industrial Bank of Korea may state on the subscription of the Small and Medium Business Finance Bonds application that the Industrial Bank of Korea might issue the Bonds concerned even if the total amount subscribed to falls short of the total amount of the issue indicated on the application; and in such cases, the subscription amount shall be regarded as the total issue amount.
| Article 21 (Procedure for Exclusive Subscription) |
In case of the exclusive and total subscription to the Small and Medium Business Finance Bonds, the provisions of Article 19 shall not apply.
Upon completion of the subscription to the Small and Medium Business Finance Bonds, the president of the Industrial Bank of Korea shall, without delay, have the Bond subscription paid in.
| Article 23 (Issuance Date) |
Except for the Small and Medium Business Finance bonds issued by public sale, the bonds shall not be issued until paid in full.
| Article 24 (Bonds Issued by Public Sale) |
| (1) | The Small and Medium Business Finance Bonds may be issued by public sale, and the period of such public sale shall be determined in advance. |
| (2) | In case of paragraph (1), the Bond subscription application shall not be necessary. |
| (3) | The Small and Medium Business Finance Bonds issued under paragraph (1) shall bear descriptions of the matters relating to Article 19 (2) 1 and 3 through 6 and the serial number. |
| Article 25 (Notice of Public Sale) |
When the Industrial Bank of Korea intends to issue the Small and Medium Business Finance Bonds by public sale, the Industrial Bank of Korea shall give public notice of the period of public sale and the matters relating to Article 19 (2) 1 through 7.
| Article 26 (Bond Register) |
| (1) | The Industrial Bank of Korea shall keep a register of the Small and Medium Business Finance Bonds at the head office describing the following subparagraphs: |
| 1. | Number of bonds by denomination and their serial numbers; |
| 3. | Matters relating to the Article 19 (2) 2 through 6. |
| (2) | For registered Small and Medium Business Finance Bonds, the names and domiciles of the owners, in addition to the information provided for in the subparagraphs of paragraph (1) shall be described. |
| Article 27 (Inspection of Bond Register) |
Any bond owner may demand to inspect the Small and Medium Business Finance Bonds register at any time during business hours of the Industrial Bank of Korea.
| Article 28 (Transfer of Registered Bonds) |
In cases of transfer of registered Small and Medium Business Finance Bonds, no bond holder may claim the Bonds against the Industrial Bank of Korea and the third party unless he/she has registered his/her name and domicile in a bond register of the Industrial Bank of Korea.
| Article 29 (Pledge of Registered Bonds) |
| (1) | In cases of establishing pledge of registered Small and Medium Business Finance Bonds, no bond holder may claim the Bonds against the Industrial Bank of Korea and the third party unless he/she has registered his/her name and domicile in a bond register of the Industrial Bank of Korea. |
| (2) | Where the pledge has been created as provided in paragraph (1), the Industrial Bank of Korea shall indicate the purport on the relevant bonds of the Industrial Bank of Korea. |
| Article 30 Deleted. <by Presidential Decree No. 16744, Mar. 4, 2000> |
| Article 30-2 (Supervision for Sound Management) |
| (1) | The Financial Services Commission shall conduct supervision over the Industrial Bank of Korea under Articles 30-3 through 30-9 of this Decree pursuant to Article 46 (1) of the Act. <Amended by Presidential Decree No. 20653, Feb. 29, 2008; Presidential Decree No. 21173, Dec. 17, 2008> |
| (2) | In conducting the supervision under paragraph (1), the Financial Services Commission may determine the detailed matters necessary for it. <Amended by Presidential Decree No. 20653, Feb. 29, 2008> |
[This Article Newly Inserted by Presidential Decree No. 16744, Mar. 4, 2000]
| Article 30-3 (Restriction on Investment, etc. to Other Juristic Persons) |
The Industrial Bank of Korea shall not acquire stocks in excess of 15/100 of the voting stocks issued by other juristic persons (including the investment shares; hereafter the same shall apply in this Article): Provided, That the same shall not apply to the following subparagraphs: <Amended by Presidential Decree No. 19535, Jun. 22, 2006; Presidential Decree No. 20653, Feb. 29, 2008; Presidential Decree No. 21173, Dec. 17, 2008>
| 1. | Where stocks of other juristic persons are acquired in consequence of investment by the Government in the Industrial Bank of Korea; |
| 2. | Where stocks are acquired in consequence of stock dividends or capital increase without consideration; |
| 3. | Where stocks are acquired in consequence of conversion of loans into investment through the restructuring of enterprise, etc.; |
| 4. | Where stocks are acquired in consequence of an exercise of security right; |
| 5. | Where stocks are acquired in consequence of the participation in capital increase consideration within the scope of existing ownership shares; |
| 6. | Where stocks are acquired in consequence of converting the stock-related claims into stocks such as the bond with warrant on new stocks; |
| 7. | Where stocks are acquired in consequence of investment in the company in which the Industrial Bank of Korea owns the stocks in excess of 15/100 of issued voting stocks (hereinafter referred to as the "subsidiary company") and which belongs to the business type designated by the Financial Services Commission. In this case, the total sum of investments in each subsidiary company shall not exceed 15/100 (30/100, in cases where the Industrial Bank of Korea has fulfilled the requirements prescribed and announced separately by the Financial Services Commission and has obtained approval of the Financial Services Commission) of the equity capital of the Industrial Bank of Korea; |
| 10. | Where the Financial Services Commission has approved that it is necessary for achieving the aims for the establishment of the Industrial Bank of Korea. |
[This Article Newly Inserted by Presidential Decree No. 16744, Mar. 4, 2000]
| Article 30-4 (Restriction on Holding Securities) |
The Industrial Bank of Korea may not hold stocks or the securities whose maturity is in excess of three years, in excess of 60/100 of its equity capital: Provided, That the following securities shall be excluded: <Amended by Presidential Decree No. 19535, Jun. 22, 2006; Presidential Decree No. 19806, Dec. 29, 2006>
| 1. | Bonds issued by the State, local governments, or special corporations under any special Acts; |
| 2. | Currency stabilization bonds issued by the Bank of Korea; |
| 4. | Securities acquired through investment by the Government; and |
| 5. | Stocks acquired by converting the loan into an investment by the restructuring of enterprises, etc. |
[This Article Newly Inserted by Presidential Decree No. 16744, Mar. 4, 2000]
| Article 30-5 (Building of Risk Control Systems) |
The Industrial Bank of Korea shall prepare business conduct standards and procedures to properly control various risks which might occur in overall management, and shall build and operate a risk control system such as the integrated control of assets and liabilities, etc.
[This Article Newly Inserted by Presidential Decree No. 16744, Mar. 4, 2000]
| Article 30-6 (Accounting Standards) |
The accounting of the Industrial Bank of Korea shall be conducted in accordance with the accounting rules pursuant to Article 13 (1) of the Act on External Audit of Stock Companies and the bank-related accounting standards determined by the Financial Services Commission. <Amended by Presidential Decree No. 19535, Jun. 22, 2006; Presidential Decree No. 20653, Feb. 29, 2008; Presidential Decree No. 21173, Dec. 17, 2008; Presidential Decree No. 21969, Dec. 31, 2009> [This Article Newly Inserted by Presidential Decree No. 16744, Mar. 4, 2000]
| Article 30-7 (Scope of Supervision over Soundness of Management) |
The supervision and inspection of the soundness of management by the Financial Services Commission shall be conducted only with respect to matters which are not subject to the accounting inspection under Article 22 of the Board of Audit and Inspection Act and to the supervision of duties under Article 24 of the same Act. <Amended by Presidential Decree No. 19535, Jun. 22, 2006; Presidential Decree No. 20653, Feb. 29, 2008> [This Article Newly Inserted by Presidential Decree No. 16744, Mar. 4, 2000]
| Article 30-8 (Guidance of Sound Management) |
| (1) | The Industrial Bank of Korea shall regularly grade its holding assets according to their soundness to accumulate and hold appropriate bad debt allowances: Provided, That the claims on the State, local governments or government-invested corporations shall be excluded from the claims subject to the establishment of bad debt allowances. |
| (2) | The Industrial Bank of Korea shall observe the asset working standards determined by the Financial Services Commission such as the ratio of equity capital to assets weighted by risk pursuant to the standards of the Industrial Bank of Korea of International Settlements, and the ratio of current assets expressed in won currency to current liabilities expressed in won currency. <Amended by Presidential Decree No. 20653, Feb. 29, 2008> |
| (3) | Where the Financial Services Commission deems that the soundness of management of the Industrial Bank of Korea might be severely impaired by a failure to meet the standards of sound management under this Decree, the Commission may request that the Industrial Bank of Korea take necessary measures to correct it. <Amended by Presidential Decree No. 20653, Feb. 29, 2008> |
[This Article Newly Inserted by Presidential Decree No. 16744, Mar. 4, 2000]
| Article 30-9 (Public Notice of Management) |
The Industrial Bank of Korea shall publicly announce major information and data on the state of management under the conditions as determined by the Financial Services Commission. <Amended by Presidential Decree No. 20653, Feb. 29, 2008>
[This Article Newly Inserted by Presidential Decree No. 16744, Mar. 4, 2000]
| Article 31 (Credit Ceiling on Local Government, etc.) |
[This Article Newly Inserted by Presidential Decree No. 15515, Nov. 29, 1997]
| Article 31-2 (Process of Unique Identification Number) |
The Financial Services Commission (including the person entrusted with the duties of the Financial Services Commission under Article 48 (4) of the relevant Act) may, if necessary to conduct the duties of the following, process data containing the resident registration number, passport number, drivers license number, or foreign registration number. <Amended by Presidential Decree No. 19535, Jun. 22, 2006; Presidential Decree No. 21969, Dec. 31, 2009; Presidential Decree No. 23488, Jan. 6, 2012>
| 1. | Clerical works concerning the inspection, order, and other follow-up measures pursuant to Article 46 |
| 2. | Clerical works concerning the submission of reports, inspection of documents, and other follow-up measures pursuant to Article 48 |
| Article 32 (Detailed Procedures) |
Detailed procedures relating to the submission of the authorization application and approval, supervision and other matters relevant to the Industrial Bank of Korea shall be determined by the Financial Services Commission. <Amended by Presidential Decree No. 20653, Feb. 29, 2008>
ADDENDUM
This Decree shall enter into force on the date of its promulgation.
ADDENDUM <Presidential Decree No. 6715, May 31, 1973>
This Decree shall enter into force on the date of its promulgation.
ADDENDUM <Presidential Decree No. 8414, Jan. 18, 1977>
This Decree shall enter into force on the date of its promulgation.
ADDENDUM <Presidential Decree No. 9384, Mar. 23, 1979>
This Decree shall enter into force on the date of its promulgation.
ADDENDUM <Presidential Decree No. 9773, Feb. 15, 1980>
This Decree shall enter into force on the date of its promulgation.
ADDENDUM <Presidential Decree No. 11313, Dec. 31, 1983>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 13635, Apr. 29, 1992>
| (1) | (Enforcement Date) This Decree shall enter into force on the date of its promulgation. |
| (2) | (Transitional Measures on Canceled Registration of Small and Medium Business Finance Bonds) With respect to the Small and Medium Business Finance Bonds which are not premature, as financial bonds issued from small and medium enterprises registered under the provisions of the previous Article 7, their registration may be canceled en bloc. |
ADDENDA <Presidential Decree No. 14438, Dec. 23, 1994>
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. 15515, Nov. 29, 1997>
This Decree shall enter into force on the date of its promulgation.
ADDENDUM <Presidential Decree No. 16744, Mar. 4, 2000>
This Decree shall enter into force on the date of its promulgation.
ADDENDUM <Presidential Decree No. 19535, Jun. 22, 2006>
This Decree shall enter into force on July 1, 2006.
ADDENDA <Presidential Decree No. 19806, Dec. 29, 2006>
Article 1 (Enforcement Date)
This Decree shall enter into force on January 1, 2007.
Articles 2 through 6 Omitted.
ADDENDA <Presidential Decree No. 20653, Feb. 29, 2008>
Article 1 (Enforcement Date)
This Decree shall enter into force on date of its promulgation. (Proviso Omitted.)
Article 2 Omitted.
ADDENDUM <Presidential Decree No. 21173, Dec. 17, 2008>
This Decree shall enter into force on the date of its promulgation.
ADDENDA <Presidential Decree No. 21969, Dec. 31, 2009>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 through 8 Omitted.
ADDENDA <Presidential Decree No. 23488, Jan. 6, 2012>
Article 1 (Enforcement Date)
This Decree shall enter into force on the date of its promulgation.
Article 2 Omitted.