With the start on the 20th of the "bank agency service," which allows customers to apply for commercial bank loans at post offices, banks and the post office agreed that the partner bank will be responsible if a financial mishap occurs, but the bank can seek indemnity if the post office's fault is recognized. The launch was pushed from the first half of the year to July reportedly because banks and the post office differed over where responsibility lies.
According to the financial sector on the 24th, the four major banks—KB Kookmin, Shinhan, Hana and Woori—and the post office decided that responsibility for incidents arising in the course of performing the bank agency service will first lie with the partner bank. If a financial mishap occurs, the bank must compensate the customer for the loss.
However, if there is a cause attributable to the post office, such as intent or negligence, breach of this contract, violation of relevant laws and regulations, or violation of business processing standards, the partner bank may seek full or partial indemnity from the post office for the loss. For example, if a post office counter employee sells a loan product through an inadequate explanation, the partner bank bears responsibility and can seek indemnity from the post office for the amount of the loss.
If a customer suffers loss due to a system problem, the post office and the partner bank agreed to bear responsibility only when at fault within the scope of their respective processing and control duties. They agreed not to be responsible for losses caused by the other party's operations or system issues.
They also clarified the scope of work. The post office handles only identity verification, loan application intake, and contract support. The partner bank is responsible for matters related to screening of the loan the customer applied for, approval, the applied interest rate, limit, repayment terms, acceleration, arrears management, and the formation and maintenance of the loan contract.
The bank agency service is a program through which residents in farming and fishing communities can apply for personal credit loans (including Sae Hope Hall) from the four major banks via the post office. Customers receive loan counseling at the regional head post office and can compare each bank's lending rate, limits and other terms to choose a product.
Some in the banking sector say responsibility remains unclear when financial mishaps occur. Banks and Korea Post have held working-level meetings since Feb. to introduce the bank agency service, and the core issue was reportedly apportioning responsibility for financial mishaps. It was unclear whether the bank, Korea Post, or both jointly would be responsible when a mishap occurs. There are also concerns that even if an incident occurs due to the post office's fault, banks may find it difficult to seek indemnity.
A commercial bank official said, "Given that most customers using the bank agency service are older adults, problems such as inadequate explanations or mistakes may arise during the product explanation process," and added, "These issues should be addressed as the program is operated."