Toss Bank Receives Institutional Warning in First FSS Regular Inspection... Fined 240 Million Won

Legal Violations Including Inadequate Internal Controls Uncovered; Sanctions Imposed on Executives and Employees
22 Management Advisories and 35 Recommendations for Improvement Notified

Internet-only bank Toss Bank was found to have committed multiple legal violations, including inadequate internal controls, during its first regular inspection by the Financial Supervisory Service (FSS), resulting in an institutional warning and a fine of over 240 million won.

Toss Bank headquarters in Gangnam-gu, Seoul. Photo by Jinhyung Kang aymsdream@

According to financial authorities on September 4, the FSS released the results of Toss Bank's regular inspection the previous day. The inspection was conducted from November 4 to December 6, 2024, and the disciplinary actions were imposed on August 25.

The inspection found that Toss Bank had committed numerous legal violations, including insufficient internal controls. As a result, the FSS issued an institutional warning and imposed a fine of 245.2 million won.

Sanctions were also imposed on executives and employees. Three executives received warnings, and two former executives were subject to "caution equivalent to warning for retirees violating laws or engaged in improper conduct." Among employees, one was penalized with a salary reduction, and one former employee was subject to "caution-level action for violations committed by retirees." In addition, notifications for voluntary follow-up on four separate matters were issued.

The FSS identified eight major violations in this inspection. Specifically, these included: violation of the obligation to notify account holders about the provision of financial transaction information and to maintain related records; violation of the obligation to request public notice of commencement of the statute of limitations for accounts used in fraud, and to notify victims who file objections; failure to report and notify customers when establishing or revising terms and conditions related to financial transactions; delay in establishing a customer inquiry system for use and provision of credit information; violation of disclosures related to credit extension by major shareholders; failure to protect customer service staff; failure to control program changes and ensure the security of electronic financial transactions; and violation of the obligation to notify customers regarding corrections of errors in electronic financial transactions.

Separately from disciplinary actions, the FSS also issued 22 management advisories to Toss Bank, including strengthening its capital adequacy management system, upgrading its credit evaluation system for mid- and low-credit customers, and expanding loan offerings.

Additionally, the FSS delivered 35 recommendations for improvement, including enhancing the performance evaluation system and strengthening the capabilities of the board of directors.

The FSS stated that other matters, which are being handled separately from these sanctions, will be disclosed in the future.

This content was produced with the assistance of AI translation services.