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[Focus] Year end witnesses banking chaos

Posted December. 27, 2000 14:13,   


When will the financial paralysis stop?

Paralysis of banking transactions is likely to continue for a while, considering the chaos of bank window service and strike atmosphere at Kookmin Bank and Housing & Commercial Bank (H&CB) Tuesday.

The reason why the presidents of both Kookmin and H&CB issued a lightening announcement on the merger of the two banks last Friday was because they thought the striking ranks might scatter, if the merger becomes an established fact. This expectation, however, completely missed the target.

It is forecast that the normalization of window service at the banks is not coming soon, even though police can stop the strike, because the strikers decided to refuse to report for work under the direction of union districts, in case they are dispersed by force. Disappearance of core computer staff members of Kookmin Bank, especially, became an obstacle to normalization.

There are frequent computer network hitches such as Internet banking problems, because only about 20 executive members and contract staff are working. A computer network shutdown is possible if this situation persists.

Will there be a general strike?

There seems to be no justification for other commercial banks to participate in the strike except the two banks, a different scenario from the July general strike. Actually, the bank unions decided to vote on the issue of a general strike Tuesday, but the other bank unions except Cho Hung Bank postponed the vote until Wednesday.

It appears that they are reluctant to join the walkout because of the instruction from the upper union, the Korea Financial Industry Union. The hard-liner unions of Hanvit, Seoul and Peace banks -- which received public fund injections -- are likely difficult to participate in the strike, considering the national consensus.

When will be the payment on behalf of other banks possible?

Although the government announced that it would facilitate customers of Kookmin and H&CB in the withdrawals of their deposits from the windows of Shinhan, Industrial and Hanvit banks starting Wednesday, it¡¯s nearly impossible to do so, since the development of the program alone takes at least seven days.

The government said it would implement the methods including withdrawal through other banks, withdrawal through tele-banking account establishment, and later settlement after manual payment as a last resort, which seems almost impossible, too.

Withdrawal through other banks is the method in which a depositor of Kookmin or H&CB opens an account with one of three banks -- Hanvit, Industrial and Shinhan Bank -- and presents withdrawal application, then those banks send the application by fax to any Kookmin or H&CB branch that is not closed, and the branch sends the requested money by way of payment without account after confirming the client¡¯s registered seal and account balance.

Dealing with the fax request, however, is nearly impossible due to the surge of thousands of people to open branches. At the same time, tele-banking or manual payment transactions also cannot be efficient, because the fax messages must be sent and confirmed first.

Park Hyeon-Jin witness@donga.com