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Financial Authorities and Industry Clash Over Proposed Deposit Insurance Premium Hikes
Finance · Financial Conglomerates · yonhap_finance · 2026-08-23
South Korean financial regulators and the industry are at odds over proposed deposit insurance premium hikes, with some sectors facing up to a 3x increase.
What Happened
Deposit Insurance Reform: Financial authorities and the Korea Deposit Insurance Corporation (KDIC) have launched a task force to revise deposit insurance premium rates for 2028. Recent research suggests potential increases of up to 3.3 times current levels, sparking significant pushback from the financial sector.
Impact of Special Contributions: The KDIC argues that the burden on financial institutions will not increase significantly because the 'special contribution' for repaying deposit insurance bonds is set to expire next year. Data shows that many institutions currently pay more in special contributions than in standard insurance premiums, potentially offsetting the proposed hikes.
Industry Resistance: Financial firms contend that the expiration of special contributions should be treated as a separate issue and that the proposed rate increases remain excessive. The insurance sector, in particular, has criticized the research model for failing to adequately account for the volatility introduced by the IFRS17 accounting standards.
Regulatory Roadmap: Regulators plan to hold monthly task force meetings through November to gather industry feedback and finalize a balanced rate structure. Following these consultations, the government intends to proceed with the necessary amendments to enforcement decrees next year.