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iM Bank launches 20% interest-bearing term deposit to boost recognition

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The headquarters of iM Bank, formerly DGB Daegu Bank in Daegu / Yonhap

The headquarters of iM Bank, formerly DGB Daegu Bank in Daegu / Yonhap

By Lee Kyung-min

iM Bank, formerly DGB Daegu Bank, has introduced a term deposit with an annual interest rate of 20 percent as part of a promotional campaign to celebrate its transition into a commercial bank, the lender announced Wednesday.

The 60-day term deposit account will be limited to 320,000 customers. Subscription is available on the bank's iM Bank app.

The daily deposit can be as high as 50,000 won ($36), translating into a principal of 3 million won and 51,370 won in interest.

Subscribers will be able to net 42,416 won after paying a 15.4 percent financial income tax.

The 20 percent interest rate comprises a base rate of 4 percent and a maximum of 16 percent discretionary rates granted by the lender if the account holder meets certain conditions.

The lender has increased server capacities, with about 2,000 subscribers on the wait list as of noon Wednesday.

"The app is experiencing no technical difficulties," an iM Bank official said. "Tech support team staff are on standby around the clock to limit customer inconvenience."

The lender offered the product only online, seeking to drum up the number of app users.

"We hope the event would help boost brand recognition with the broader public who may not have heard of our new name iM often."

Whether the lender would be able to break the current oligopoly remains to be seen. Its top five peers are KB Kookmin, Shinhan, Hana, Woori and NH NongHyup.

The Daegu-based regional bank's plan to rebrand itself as iM Bank came about 50 years after it was established as Korea's first regional bank in 1967.

The lender will bolster sustainable, robust growth, defined by its strategy to meet the needs of small and medium-sized enterprises and low-credit borrowers. Offering customer-oriented and inclusive financial services is also among its priorities.

The transition bodes well for a growing number of new players seeking to enter the oligopoly-protected banking industry.

The Financial Services Commission, in July last year, eased the application and screening processes for licensed banking, a mandate to increase the number of internet-only lenders to resolve monopoly issues.

Four consortiums have since formed for the bid to become the fourth internet-only bank.

Korea's three existing internet-only banks are Toss, a mobile money transfer app owned by Viva Republica, Kakao Bank, operated by mobile messaging service provider Kakao Corp. and Kbank, operated by telecommunications firm KT.

Woori Bank joined a consortium led by Korean Credit Data in May.

Lee Kyung-min lkm@koreatimes.co.kr


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