South Korea’s internet-only banking service provider K-Bank has decided to delay its launch to late February from the initial plan of late January to ensure business stability and consumer protection, industry officials said Tuesday.

The bank received the license from the Financial Services Commission for banking services on Dec. 14, bring it a step closer to becoming the nation’s first bank to offer financial services 24 hours without brick-and-mortar branches and bank tellers. It was also the first new bank to gain business approval in Korea in 24 years, after Pyeonghwa Bank in 1992. 

“We put stability as the top priority. If there is any accident after a hasty opening, it will not only harm our business but the entire internet-only banking industry in the future,” K-Bank spokesman Kim Dong-woo said.

“For the final check of the system, our executives and employees will become the real customers of the bank. Then, we will open our business.”

Headquartered in Gwanghwamun in central Seoul, K-Bank is a consortium led by KT Corp., Woori Bank, GS Retail and 18 other companies. It has been capitalized at 250 billion won ($214 million) with some 150 employees.

According to news reports, K-Bank President Shim Sung-hoon said the bank will try to attract customers at GS Retail’s 15,000 nation-wide convenience stores and offer higher interest rates, as it does not have to bear the costs of real estate and employment of bank tellers.

The bank is also expected to offer various types of interest rates in noncash forms such as digital music or telco data.

Meanwhile, the head of Kakao Bank, a consortium led by mobile messenger app operator Kakao Corp., said the bank will drastically lower interest rates to get ahead of the competition with savings banks in the mid-tier loan market.

At a meeting with Jeong Eun-bo, vice chairman of the Financial Services Commission, at Kakao Bank’s head office in tech valley Pangyo in Seongnam on Monday, Kakao Bank Co-CEO Yun Ho-young said the bank will be able to offer cheaper loan interest rates to borrowers -- who were traditionally regarded as low credit rating holders but actually have a good record of debt repayments -- by using its parent company Kakao Corp’s big data and readjusting their credit ratings.

Kakao Bank recently submitted a request to the financial regulator for a banking business license. It hopes to get approval in the first quarter and launch the service in the first half of the year.

The moves by internet-only banks, however, face some regulatory obstacles that prevent conglomerates such as KT and Kakao from owning a more than 10 percent stake in a banking firm. If their voting rights are involved, they are allowed an up to 4 percent stake.

Internet-only banks need to boost capital to make inroads into the lending business in earnest, but such regulation makes it impossible to do so, industry officials say.

The FSC and ruling party lawmakers have been pushing to revise the law to ease regulations and raise the cap from 10 percent to 50 percent, but it is unclear whether the revision bill will be able to pass the National Assembly in which opposition lawmakers are a majority.

By Kim Yoon-mi (yoonmi@heraldcorp.com)