South Korea's Financial Supervisory Service said on Tuesday it will review overall governance conditions at eight financial holding companies from Jan. 19 to 23, including KB Financial Group, Shinhan Financial Group, Hana Financial Group, Woori Financial Group, NongHyup Financial Group, iM Financial Group, BNK Financial Group and JB Financial Group.

The FSS is currently inspecting BNK Financial Group after President Lee Jae-myung described the practice of financial holding chairmen being reappointed as a "corrupt inner circle". It is widening that effort to all holding firms through a special review.

The move aims to intensively check governance after criticism that bank holding firms are only formally implementing, or circumventing through loopholes, the "best practices for governance" they drew up in 2023.

The FSS plans to focus on whether governance is operating soundly, rather than the outward appearance of governance rules or organisational structures, and on formal compliance that weakens the intent of the best practices.

The FSS said it will use the results to identify best practices and areas needing improvement by each bank holding firm and reflect them in discussions by a governance advancement task force. It said it will also share the findings with the banking sector to encourage voluntary improvements by banks.