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South Korea to have online-only bank

Two South Korean entities are joining hands to set up the country’s first online-only bank. Korea Investment Holdings and Daum Kakao are now in the process of finalizing plans to get government approval for setting up a bank. A spokesperson for Daum Kakao, South Korea’s second-largest internet portal and operator of chat app KakaoTalk, said the company plans to take a 10% stake in the consortium, the maximum stake currently allowed by law for a non-financial company. Korea Investment, a local brokerage and asset manager, is expected to take a 50% stake and is sounding out interest among the country’s four commercial lenders including Hana Bank and Shinhan Bank for the remaining stake The government plans to issue a permit for one or two internet-only banks by the end of the year. The country is introducing web-only banks as part of efforts to deregulate and advance the under-developed financial sector, as it seeks new economic growth drivers.

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