South Korea's Financial Supervisory Service ordered SC First Bank Monday to ramp up its liquidity management to minimize the impact of a bank run sparked by a prolonged strike.
"Measures should be taken to prevent financial accidents and customer inconveniences. The management and union should settle the dispute as soon as possible," FSS Gov. Kwon Hyouk-se said in a staff meeting.
Close to 1 trillion won or US$942 million in deposits is estimated to have been withdrawn SC First Bank in the country since the start of the walkout.
"The instruction was issued since a prolonged strike could lead to a possible delay in withdrawals of deposits by customers," said an FSS official, adding that around 10 inspectors are conducting an on-site inspection to monitor the situation.
Meanwhile, SC First Bank said Monday it will deduct commissions on some bank services until the strike ends as part of its efforts to compensate for customer inconveniences.
SC First Bank is the first lender in South Korea to seek to introduce a performance-based pay system, sparking vehement opposition from its labor union, which claims the new pay scheme is merely aimed at reducing labor costs.
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