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Feb 20, 2008

Bank Antipathy To Foreigners

This article appeared in the Korea Times on Feb. 20, 2008.

By Sean Hayes

President-elect Lee Myung-bak's plan to make Korea a more hospitable place for foreigners is a welcome development for many of us long-term residents of Korea; however, the plan will fail unless private enterprises follow suit and realize that foreigners play an integral part in the Korean economy.

I have been writing legal Q&A column for this and other papers for over five years. I receive more complaints and questions about the banking sector than any other area combined. The complaints are real and the questions are because of the banks seeming incapability of understanding and explaining bank rules and government regulations.

Since I came to Korea more than 10 years ago, I have seen little development in the consumer banking sector and my bank, Kookmin Bank, has even deteriorated.

Bank employees are ill informed, incapable of performing even the most rudimentary transactions in an efficient manner and are too often willing to blame most of their missteps on the government. Senior management is unwilling to provide even the most basic services to foreigners in a convenient and consistent fashion.

For example, many foreigners, including myself are plagued with the problem of not being able to use our Korean ATM cards in foreign countries even though the card states, in Korean, that the card can be used in foreign nations. I was hit by this new bank rule a few years back when I went to the Philippines to present a speech. I brought my bankcard, a few hundred thousand Korean won, and the understanding that since I used the same card in the Philippines in the past that the Kookmin card would work.

Too my surprise, the card didn't work, the airport banks wouldn't exchange Korean money, and Philippine taxi drivers are so kind that they even take passengers without money. Luckily, the hotel was generous enough to overcharge my credit card and give me a cash refund for the overcharged amount and a former student was kind enough to send me money by Western Union. Obviously, this caused a good deal of embarrassment and a great deal of anxiety.

When I returned to Korea I confronted the bank manager at my local bank. He, in a not so kind manner, explained that this was a new Korean government regulation. I informed him that he was full of hot air. Korea has no regulation prohibiting foreigners from using international ATM cards, but the nation does prohibit foreigners from withdrawing more than $10,000 per exit from the country. Kookmin and other banks just feel its easier to block foreigners from using cards, than to create a system that prohibits foreigners from withdrawing more than $10,000 per exit from the country.

I was also a little alarmed by my bank a few weeks ago when I went to the bank to transfer funds overseas. I was given a form, in Korean, that stated that I must inform the bank of my reason for transferring the money. The form has multiple boxes and I was forced to pick one if I wanted to send money. I was also informed that I could only send money from this specific branch. I was lucky enough to be able to read and understand the form, but many foreigners would not have been.

I asked the bank to translate the form and get the form back to me, but three weeks later I never heard a word from the bank. I assume, as usual, Kookmin Bank employees are still pointing to a box and simply telling foreigners to check here, sign here, and initial here without foreigners even knowing what they are signing.

The Korean bank industry and other service industries will never improve until they realize that foreigners are a needed component for the future development of the local economy. This realization should be pushed on private industries by the new administration.

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SeanHayes@ipglegal.com