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Protection of Financial Consumers

Depositor protection system

Protected financial companies

Depositor protection system

What is the “depositor protection system”?

- The “depositor protection system” refers to the system where the Korea Deposit Insurance Corporation pays deposits on behalf of financial companies when they cannot pay because of business suspension, bankruptcy, etc. (see Article 1 of the Depositor Protection Act; see the Korea Deposit Insurance Corporation website (https://www.kdic.or.kr)-Depositor Protection System).

Protected financial companies

Scope of financial companies

- Financial companies that are subject to deposit protection under the Depositor Protection Act (hereinafter “insured financial companies”) refer to any of the following (Subparagraph 1 of Article 2 of the Depositor Protection Act; Article 2 of the Enforcement Decree of the Depositor Protection Act):

Category	Protected Financial Companies
Banks	Banks licensed under the Banking Act, Korea Development Bank under the Korea Development Bank Act, Industrial Bank of Korea under the Industrial Bank of Korea Act, NongHyup Bank under the Agricultural Cooperatives Act, SuHyup Bank under the Fisheries Cooperatives Act, Domestic branches and agencies of foreign banks licensed under the Banking Act
Securities Dealers and Brokers	Securities dealers and brokers licensed for securities trading and brokerage under the Financial Investment Services and Capital Markets Act; However, multilateral trading facility companies under Article 78 of the Financial Investment Services and Capital Markets Act, securities dealers and brokers without deposits, and cooperatives under Subparagraph 1 of Article 2 of the Act on the Structural Improvement of Agricultural Cooperatives are excluded. √ Those licensed for investment trading or brokerage only for professional investors for debt securities under Articles 4(3) and 12(1)3 of the Financial Investment Services and Capital Markets Act √ Those licensed for brokerage only for professional investors for securities under Articles 4(1) and 12(1)3 of the Financial Investment Services and Capital Markets Act (only applicable when brokering repurchase condition-based trading of the securities). √ Those registered as online small investment brokers under Article 117-4 of the Financial Investment Services and Capital Markets Act Securities finance companies licensed under Article 324(1) of the Financial Investment Services and Capital Markets Act
Insurance Companies	Insurance companies licensed under the Insurance Business Act (excluding insurance companies mainly engaged in reinsurance or guarantee insurance)
Comprehensive Financial Companies	Comprehensive financial companies under the Financial Investment Services and Capital Markets Act
Mutual Savings Banks	Mutual savings banks and central associations of mutual savings banks under the Mutual Savings Bank Act

※ Protected Financial Companies

Q. I’m considering depositing money in a community credit cooperative. Is the deposit in a community credit cooperative protected under the Depositor Protection Act?

A. A community credit cooperative is not a financial company protected under the Depositor Protection Act. However, deposits in a community credit cooperative can be protected through the deposit protection reserve fund established by the Korean Federation Community Credit Cooperatives under the Community Credit Cooperatives Act.

For reference, deposits in NongHyup Bank or SuHyup Bank, as well as regional associations of NongHyup and SuHyup and credit cooperatives, are not subject to protection under the Depositor Protection Act, but rather are protected according to their respective funds under relevant statutes.

※ You can check the list of financial companies eligible for depositor protection on the Korea Deposit Insurance Corporation website (https://www.kdic.or.kr) under “Depositor Protection System-Protected Targets-Search for Protected Financial Companies.”

Protected deposits

- The Korea Deposit Insurance Corporation only protects “deposits, etc.” handled by financial companies that are subscribed to deposit insurance.

※ Detailed information on financial products eligible for depositor protection can be checked on the Korea Deposit Insurance Corporation website (https://www.kdic.or.kr) under “Depositor Protection System-Financial Products-Search for Protected Financial Products.”