Headquarters of Financial Institutions Tied to Seoul... North Jeolla Begins Overhauling 'Location Regulations'

NongHyup, Korea Development Bank, Industrial Bank of Korea, Korea Deposit Insurance Corporation, National Federation of Fisheries Cooperatives, and National Credit Union Federation of Korea
Discussions Begin in the National Assembly Ahead of the Second Phase of Public Institution Relocations

With the second phase of public institution relocations ahead, North Jeolla Province is making significant efforts to revise related laws that currently restrict the headquarters of financial institutions to Seoul. The province believes that before selecting which institutions to relocate, it is essential to first amend the existing laws that specify “the headquarters must be in Seoul,” as this is a precondition for enabling actual relocation to the regions.

According to North Jeolla Province on September 7, it has identified eight institutions that require legal amendments. Of these, seven institutions—the National Agricultural Cooperative Federation (NongHyup), Korea Development Bank, Industrial Bank of Korea, Korea Deposit Insurance Corporation, National Credit Union Federation of Korea, National Federation of Fisheries Cooperatives, and Korea Teachers’ Pension—are currently specified by their existing statutes to have their headquarters or main offices based in Seoul.

In the case of Korea Investment Corporation, relocation would be possible simply by amending its articles of association, but for greater certainty in attracting the headquarters, legal revision is also being considered.

Currently, various provisions remain in place throughout relevant laws, stipulating that the headquarters of financial and public institutions must be located in Seoul.

For example, Article 114 of the Agricultural Cooperatives Act prescribes the main office location of the National Agricultural Cooperative Federation. Similarly, Article 4 of both the Korea Development Bank Act and the Industrial Bank of Korea Act specify the location of their headquarters. In addition, Article 4 of the Depositor Protection Act, Article 54 of the National Credit Union Act, and Article 117 of the Fisheries Cooperatives Act contain regulations related to the location of those institutions.

Because of these constraints, even if the government decides to relocate a specific financial institution to a local area, it would be difficult to implement such a move unless the relevant laws are revised. Therefore, according to North Jeolla Province, to ensure the effectiveness of the second phase of public institution relocations, it is necessary to select the institutions and simultaneously revise the current legal provisions that require Seoul as the headquarters location to make regional relocation possible.

The province further asserts that, since these regulations could affect not only the relocation of particular institutions but also the overall process of the second phase of public institution relocations in the future, discussions on revising the relevant laws should begin in the National Assembly before the government finalizes its relocation plans.

On August 10, the province visited the National Assembly to explain to local lawmakers’ offices why changes to these laws are necessary. Then, on August 27, Lee Wontak, Governor of North Jeolla Province, and local lawmakers adopted a joint statement pledging cooperative efforts to place key financial institutions in North Jeolla and to amend the related legislation.

The province plans to work with local lawmakers to prepare and seek additional sponsorship of legislative amendments for each institution that would either ease or eliminate the requirements for Seoul as the headquarters location. In the case of the National Agricultural Cooperative Federation, lawmakers Lee Sungyoon and Yoon Joonbyung already sponsored an amendment to the Agricultural Cooperatives Act last year.

The province’s plan is not to simply wait for the government’s announcement on which institutions will be relocated, but to preemptively secure a legal foundation so that follow-up procedures can begin immediately once a decision is made on relocation.

Yeom Kinam, Policy Planning Director of North Jeolla Province, stated, “Revising the regulations regarding the headquarters location of financial public institutions is not about serving the interests of a specific region, but about establishing the institutional foundation for the entire second phase of public institution relocation policy. We will continue to work with the National Assembly and local political circles to ensure that related legislative amendments can be introduced in connection with the government’s relocation plans.”

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