Parliamentary committee agrees to compensate savings bank victims

By Kim Eun-jung
SEOUL, Aug. 9 (Yonhap) -- The ruling and opposition parties agreed Tuesday to reimburse individual victims of suspended savings banks for virtually all of their lost deposits, sparking criticism that lawmakers are bending rules to woo voters ahead of next year's general elections.
The government has suspended operations of nine savings banks so far this year due to their weak financial standing stemming from bad real estate loans. Among them was Busan Savings Bank, the nation's largest savings bank, which is at the center of a massive influence-peddling scandal involving bank officials, state auditors and politicians.
Victims have waged protests in front of the National Assembly over the past weeks, calling for strong action for those responsible for poor management and regulations and full compensation for their deposits kept in the troubled banks.
Hundreds of Busan Savings Bank customers have also lodged class action suits against bank officials, state regulators and accountants, holding them accountable for fraudulent accounting and lax inspection.
On Tuesday, ruling and opposition lawmakers belonging to a special parliamentary committee agreed to seek a special law to use the Deposit Insurance Fund to compensate individual customers and bond investors for their losses of up to 200 million won (US$183,700), officials said.
The move marks an exception to the current law that allows a state deposit insurance corporation to cover only up to 50 million won for customers of the failed banks. Critics accused the parties of bending rules to woo voters ahead of next year's parliamentary elections.
It is expected to take up to 280 billion won to compensate victims.
The agreement also came as the deadline nears for the committee's expiry without considerable progress on its own inquiry on the sidelines of the prosecution's investigation over a string of irregularities and bribery allegations. The ad-hoc committee has to wrap up its activities by Friday.
Ruling and opposition lawmakers of the committee said they will submit a bill on the new deposit protection scheme this month. If it passes in the August extra parliamentary session, the government will be able to use the public funds to provide victims compensation as early as September, they added.
ejkim@yna.co.kr