A total of 205 borrowers will call for the nation’s financial regulator to conduct an investigation into the nation’s first-tier banking industry on allegations that commercial banks manipulated some interest rates, the Korea Consumer Agency said Monday.

This will mark the first such case since the Financial Supervisory Service implemented the “consumer-initiated” inquiry system last May. KCA said it will file a petition with the regulator against banks on Tuesday.

In a statement, the consumer advocate said it alleges that banks overcharged borrowers collectively about 4.1 trillion won ($3.5 billion) in interest from January 2010 to June 2012 by fabricating rates for certificates of deposit.

“This means the nation’s bank customers had to shoulder the extra loan interest burden worth 136 billion won a month on average,” said KCA.

The civic group’s action comes amid the ongoing antitrust probe from the Fair Trade Commission into the allegations that some banks rigged the CD and loan rates via cartel practices.

Aside from the banking sector case, some market insiders said that the prosecution may launch investigations into similar allegations in the brokerage industry in the coming months.

In late 2012, the antitrust regulator referred six securities firms to the prosecution on allegations that major securities brokerage firms colluded to fix the rates on CDs.

“The antitrust regulator FTC has been more active in looking into the CD cartel allegation in the financial sector, compared to the financial regulator FSS,” said an executive director in the securities sector.

Citing the “obvious evidence for dealers’ talks on mobile messenger services” that were secured by the FTC, he said it does not seem that the six securities firms will be able to avert prosecutors’ investigation.

He also predicted that more brokerage firms or some banks would possibly be placed under the additional investigative target of the FTC and prosecution.

Further, several brokerage firms admitted irregular practices over the CD rates after the regulator announced its launch of a full-fledged probe last year.

The FTC investigation came as the CD rates remained relatively high when other market rates had dropped. The rate had remained untouched at 3.54 percent for almost three months in the first half of 2012.

The CD rate is the benchmark rate for corporate and household loans. The interest rates of 56 percent for corporate loans and 23 percent for household loans are tied to the interest rate.

Meanwhile, for the consumer-initiated FSS probe, a consumer group composed of at least 200 individuals is allowed to request the FSS scrutinize a financial firm ― as a class action-like petition against companies including banks, brokerage firms, credit card issuers and insurance firms.

The special board, which comprises regulatory officials and lawyers, will carry out preliminary reviews to accept or reject consumers’ proposals.

The new system reflects FSS Governor Choi Soo-hyun’s commitment to bolstering consumer protection as the number of irregular business practices in the financial sector has continued to grow.

By Kim Yon-se (kys@heraldcorp.com)