Banks failing to submit labor pacts to be disposed of through P&As

Among the six banks receiving public funds, those not submitting written labor agreements by Dec. 29 will be disposed of through means of P&A (purchase of assets and assumption of liabilities) under related laws, government officials warned Friday.

"The government will handle banks that don't present written labor consent through means of P&A according to relevant laws," said Yoon Yong-Roe, chief of the banking system department at the Ministry of Finance and Economy. "We have already delivered our intention to the banks." He said that the agreements are necessary for signing a memorandum of understanding (MOU) with the Korea Deposit and Insurance Corp. for management reform.

Of the six banks, Kwangju, Cheju, Kyongnam and Peace have already submitted the documents but Hanvit and Seoul have yet to do so.

As the state order for complete capital reductions on these banks took effect Friday, they will be able to resume normal operations only after all of their capital is exhausted and public funds are injected.