KDIC President Yoo Jae-hoon speaks during a press conference in Seoul on March 8. He talked about expanding the coverage of the country’s deposit insurance system. Photo courtesy of KDIC

State-backed outfit strives to strengthen consumer protection

The Korea Deposit Insurance Corporation (KDIC) announced on March 8 that the entity had worked on the idea of expanding the coverage of deposit insurance.

KDIC President Yoo Jae-hoon made the remarks during a press conference in Seoul. The former government bureaucrat took charge of the KDIC late last year.

“The conventional deposit insurance system deals merely with savings deposits. But we need to consider whether to expand the scope to non-savings products,” Yoo said.

“Toward that end, the country is required to revise the relevant law. We don’t have detailed plans to introduce the new system. But that may be the right direction.”

Established in 1996, the KDIC is a South Korean outfit, which is geared toward protecting depositors and maintaining the stability of the country’s financial system.

Also included in the deposit insurance corporation’s other main functions are insurance management and risk surveillance.

The state-backed outfit is based on the Depositor Protection Act, which was enacted in late 1995.

To expand the coverage of deposit insurance, the National Assembly has to revise the law and related regulations.

The KDIC currently covers up to 50 million won ($38,000) per depositor, which is just above Korea’s per capita gross domestic product.

Regarding the discussion of increasing the ceiling, CEO Yoo remained cautious.

“So many issues are related to the discussion, and we have yet to make our official stance,” he said. “But we will let people know how the upper limit was come up with.”