[DigitalToday reporter Ji-young Lee] The scope of in-person services permitted for internet-only banks will be partly expanded. The principle of non-face-to-face operations will be maintained, but exceptions will be allowed for tasks deemed unavoidable to protect consumers and promote inclusive finance, including support for debt restructuring, corporate loan screening and checks for forged or altered documents.

The Financial Services Commission said on Tuesday it approved a plan titled "Measures to reasonably adjust the scope of in-person services for internet-only banks" at its 12th regular meeting.

The commission said the range of in-person services that are realistically necessary should be adjusted given the recent launch of the Youth Future Savings product, support for debt restructuring and the expansion of joint lending with regional banks for local small and medium-sized companies and self-employed individuals.

It will first clarify that in-person services are possible under current legal interpretations when interviews with a representative or employees are needed during corporate funding loan screening. It said interviews to assess the credibility of fund use and repayment plans and the feasibility of business plans fall within the scope of on-site inspections.

It also set additional tasks to be allowed through the commission's decision and revisions to banking supervisory rules. In-person services will be allowed when debtor guidance, consultations and negotiations are needed to manage and recover delinquent claims, as well as when consultations on debt restructuring are necessary.

Exceptions will also be recognised when original documents must be checked to verify whether documents submitted online have been forged or altered. This includes cases related to special early termination of the Youth Future Savings product where verification is needed for application and supporting materials such as certificates of retirement.

It also includes cases where checks are needed after a loan is made on whether funds are being used properly, and on the status or value of collateral. Banks will be able to conduct in-person checks when they need to examine whether corporate or self-employed loan funds were used for purposes such as buying a home, or to verify whether collateral has been lost or damaged.

In-person services will also cover fact-checking at a consumer's request, delivery of processing results, and issuance and acceptance of documents.

Verification tasks related to mortgages and jeonse loans will also be allowed. This applies when banks must investigate and confirm rights and occupancy relations for collateral or leased homes, whether there are senior tenants, whether borrowers actually live in the home, and whether lease contracts are genuine.

In-person services will also be allowed on an exceptional basis when legal or administrative constraints make it difficult to process matters only through electronic methods during the establishment, change or execution of security interests. Examples include collateral inspections by agents such as judicial scriveners and handling of registration work.

The commission said it also decided to allow in-person services when necessary to fulfil obligations under laws and regulations.

The three internet-only banks - KakaoBank, K bank and Toss Bank - must report the content, method and scope of in-person services to the commission at least 7 business days before beginning such operations under the plan.

The commission said it expects the adjustment to reduce legal uncertainty over unavoidable in-person services by internet-only banks and to have effects including revitalising debt restructuring, expanding funding supply to local small and medium-sized companies and self-employed individuals, and improving consumer convenience.

It added that the principle of non-face-to-face operations by internet-only banks will be maintained. It said the commission and the Financial Supervisory Service will check through regular inspections whether internet-only banks comply with limits on the scope of in-person services, and will take strict action if violations of laws and regulations are confirmed.