Depositors rush Regent Merchant Bank

Regent Merchant Bank fell into default of payment Nov. 28. With continued withdrawal of deposits by customers, the bank failed to pay to some customers, as it was in short of cash asset.

Also, the government suspended operation of Taegu Mutual Savings for six months. It seems that the impact of ¡°Jin Seung-Hyun-gate¡± is spreading. Lee Keun-Young, chairman of the Financial Supervisory Commission (FSC), is planning to make a statement the morning of Nov. 29 regarding the recent scandal of mutual savings companies.

According to the Financial Supervisory Service (FSS) and Regent Merchant Bank, a lot of depositors rushed to Regent, which illegally provided loans amounting to 60 billion won to MCI Korea, and tried to withdraw their deposits. So the bank paid 50 billion won and stopped further payment.

Regent paid 50 billion won Nov. 25 and 150 billion won Nov. 27, so it has paid a total of 250 billion won during the past three days and is running out of cash. The bank tried to secure cash Tuesday night, and its operation would inevitably be suspended if it fails to secure enough funds before it opens Wednesday morning.

The FSS announced that it would suspend operation of Taegu Mutual Savings until May 27, 2001, so a total of eight mutual savings firms were closed since Oct. 23 when operation of Dongbang Mutual Savings in Seoul was suspended.

Hong Chan-Sun hcs@donga.com