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Bibbitybop
Joined: 22 Feb 2006
Location: Seoul
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 Posted: Sun Mar 16, 2008 7:33 pm Post subject: Banking in Korea: The answers |
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Everyone needs to read these two articles in order to understanding banking as a foreigner in Korea.
They've been posted before, but are worth repeating.
http://www.koreatimes.co.kr/www/news/opinon/2008/02/197_3908.html
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One Reason Why Korea is Not the �Hub of Asia�
By J. Scott Burgeson
Last year I worked my butt off at Hongik University writing my latest book, and hadn't had a real vacation in over two years. So I decided to spend a month in Northeast China in February during the winter break, doing a little research on the ethnic Korean areas there but mostly just having fun.
Of course, one requires money to travel and have fun, so in late January I visited my local branch of Hana Bank in Jongno to apply for an international cash card (alternately known as an int'l debit or ATM card), in order to access my account there from abroad. I don't have or want a credit card, and certainly didn't want to travel around for a month carrying all of my money on me. I also knew that since I was going to be in China until the end of February, and my university wires my salary into my account on the 25th of every month, I might need to use some of my pay from February in case I emptied out my account before then.
I was a little worried about whether or not Hana would give me an international cash card, since for the past two years I had heard countless stories and complaints from local expats about how Korean banks had suddenly stopped issuing international cash cards to resident foreigners here. Even worse, many expats who had been given international cash cards from Korean banks in the past were finding that they now didn't work overseas, or were denied replacement when they were lost, damaged or reached their expiration date. No one was quite sure why Korean banks had decided to enforce this new policy, but it was clear that many foreigners here were very ticked off about it.
To my relief, however, the nice young lady at Hana processed my application without a hitch, and told me with a cheerful smile that my new international cash card would be mailed to me in a few days. It was still unclear why so many other foreigners were being denied international bankcards, but being a typically self-absorbed expat I wasn't about to complain since I had gotten exactly what I needed.
Or so I thought. Two days later, I received a call from the same teller. ``I'm sorry,'' she said, ``but we won't be able to send you an international cash card.''
``Why not?'' I asked, already sensing what the answer would be.
``Because foreigners aren't allowed to receive them.''
I couldn't understand why she hadn't known this when I'd first come in to apply, and went back to see the manager the next day. He was most apologetic and even offered me a cup of green tea, but when I asked where this discriminatory policy had originated from, he was unable to answer and simply kept repeating, ``I'm sorry.''
I was sorry, too, and told him before leaving, ``You know, I'm a respected instructor at a well-known Korean university. I think I have a right to access the money I've earned here legally, don't you? Isn't this the era of globalization that Koreans are always talking about?''
He agreed, which was nice to hear, but his sympathy wasn't going to be very helpful during my travels in China. In the end, I had to withdraw my last 2 million won using my domestic cash card, and exchanged it all for travelers checks that were often a pain to cash in provincial China, especially since I was traveling during the Lunar New Year when many banks and businesses there were closed for the long holiday.
Still, that was nothing compared to nearly getting fired because I was without an international cash card on my trip. When I had purchased my open-ended, round-trip ferry ticket in Korea, the clerk had neglected to tell me that they would be suspending service for two weeks for repairs during and after the Lunar New Year period. As a result, I spent the last week of February in the border town of Dandong thoroughly stressed out because I was almost out of money and the soonest ferry back to Incheon arrived on the morning of March 2, the first day of the new semester, and my first class started at 1pm that same day.
Even worse, I was unable to call the ferry company to make a reservation because it was closed throughout the holiday and repair period. It wasn't hard to imagine the ferry being fully booked after a two-week hiatus, which indeed turned out to be the case.
I would have much preferred just to buy a cheap airline ticket back to Korea rather than cutting things so close, but of course I was unable access my Hana account which had been replenished on the 25th. While I'm happy to say that I did in fact make it back to Korea in time after much high drama, I cannot say that I have especially fond memories of my last week in China.
Since I again plan to travel abroad this summer, I recently visited half a dozen local banks in Jongno inquiring if I could receive an international cash card from any of them, but Kookmin, Korea Exchange Bank (KEB), Woori, Shinhan and Standard Chartered First Bank of Korea all told me that they were no longer issuing such cards to their foreign customers.
When I asked why not, some of them didn't know, some said it was because of their own internal policy, and some said it was because of government regulations on foreign currency exchange. One teller even told me, ``It's because we think that foreigners in Korea only need to use a Korean bank while they're in Korea!''
Surprisingly, though, Nonghyup said it would be no problem for me to receive an international cash card, and even more bizarrely, the Ulchiro-1-ga branch of Hana told me that I could get an international cash card right away. I admit that I was skeptical at first given my previous experience with them, but sure enough, I had one in my hands within 5 minutes. It reads, ``Hana International Debit Card'' and works with the global ``Plus'' network. Amazing, but also incredibly strange!
I was so confused by all of this that I called up the Ministry of Finance and Economy, to see if there was really some sort of government restriction against issuing international cash cards to foreign residents in Korea. The official I spoke with, however, was just as baffled by the situation as I was.
``There is no government policy preventing foreign residents from receiving international bank cards,'' he said. ``The banks either misunderstand our policy, or it's just their excuse.'' Meanwhile, officials at the local banking industry's Financial Supervisory Service could tell me nothing more concrete, beyond the by now largely ritualistic expression, ``As a Korean, I'm sorry.''
The moral of this story? It is clear that many Korean banks are either inept, since they are incorrectly interpreting government-made banking regulations, or else they are outright discriminatory towards their foreign customers. Either way, there are hundreds of thousands of expats here with legitimate and often unmet banking needs who cannot help but roll their eyes when they hear of South Korea's oft-expressed desire to become a so-called ``Hub of Asia.'' Indeed, I'm sure many of them feel that Korea is only a ``Hub of Korea'' and not much else.
When I discuss this problem with my expat friends in Singapore, Beijing, Bangkok, Kyoto, Sydney and San Francisco, all of them resident foreigners with international cash cards from local banks, they often just laugh or shake their heads in disbelief. My Canadian friend Doug, a former colleague at Hongik who recently relocated to Beijing, was stranded in Bangkok last year without any money after his KEB ``international'' cash card failed to work, and had so many problems with Korean banks over the years that he now likes to say of his Korean experience, ``I voted with my feet.'' Then there is my American friend Dave, a long-term expat in China with many years of experience in the travel industry there, who simply asks, ``What the hell is Korea thinking?''
It's something I'd like to know myself!
J. Scott Burgeson is the author of ``Korea Consumer Report�� (Galleon, 2007) and ``Korea Bug�� (Eunhaeng Namu, 2005). www.kingbaeksu.com. |
Author comments about the first article from another website. Also, this link has the first article in Korean, too, so you can show the bank:
http://www.rjkoehler.com/2008/02/28/more-on-foreigners-and-banking/
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The expat �community� here is so funny, and I find this whole bank card thing an interesting prism through which to view its often divided and self-defeating nature.
I was one of the first to write about this issue last May for the Chosun Ilbo (my story also appeared in the Korea Times). I posted a link on Dave�s ESL Cafe and encouraged all posters to copy the Korean-language edition and bring it into their local bank the next time they applied for an int�l debit card and were denied supposedly because there was some law against it. Showing some op-ed piece from The Korea Times is one thing (and easily ignored by non-English speaking bank employees), but showing a Korean-language article from the nation�s largest paper quoting as I did an official from the Ministry of Finance and Economy who stated very clearly �there is no law or regulation against issuing int�l debit cards to foreigners� is something else entirely. Indeed, many Korean bank tellers posted my story on their blogs, I was invited to speak on the matter at the local Rotary Club and the MOFE even mentioned my article the next time they met with Korean banks and made a point to tell them that there was no law or regulation against issuing these cards to expats.
My intention in the case of Dave�s ESL Cafe was to try to harness the power of the Internet as a means of activism in order to further the interests of the expat commnity here. I have no doubt that if a million expats all brought in that article last year to their local banks and called the banks on their BS, action would have been taken pretty quickly. But 6 months after I posted the text of my story on Dave�s and called for mass action, the number of posters who continued to keep complaining that �they couldn�t get an int�l bank card because it was illegal� was so large that I finally gave up. Despite the fact that I had definitively quoted a gov�t official on the matter in the nation�s largest paper, the endless stream of underinformed personal anecdotes by posters on Dave�s continued to cloud the issue and prevent any effective collective action even amongst the 500 or so regular posters and users of Dave�s.
Ditto for the Marmot�s Hole. For whatever his personal reasons are, Robert never links to stories I write, so I didn�t really expect him to link to my Chosun/Times story last year, but at the same time I kind of thought that it would be nice if he might set aside personal interests for once for the sake of the larger good of the expat community. The Marmot�s Hole is the most famous expat blog in Korea and I�m sure that if it encouraged its readers and other expat bloggers to approach this issue from a mass activist angle, there might be some sort of positive effect on this issue.
But no. I see that since I wrote that article, The Marmot�s Hole has linked to several other subsequent articles on the same theme in the local English-language press, and these threads in turn fill up with all sorts of anecdotes and personal complaints.
But it means NOTHING because it is all in English and decision-makers in Korea just don�t really care what gets said if they can�t see it in Korean before their own eyes.
So the lesson I draw from all of this is that the so-called expat community is just too divided by personal rivalies and animosities and individual self-interest to really come together for its greater good. And at this point I�m sick and tired of reading endless stories about the subject of int�l debit cards and reading endless personal anecdotes on the same theme. It�s pretty clear, I hope, how I think The Marmot�s Hole could more effectively serve the various interests of the local expat community (i.e., by being more activist oriented and less ideologically selective in terms of what it links to and posts on), but one thing is clear: All these threads and comments in English have absolutely no effect on Korea, Inc. except to allow people to vent and make themselves feel better. Sorry, folks, but Ban Ki-moon is not reading the Hole everyday.
As for me, I�ve given up on the local expat �community� because frankly I�ve seen that, time and time again, no such thing even exists.
Happy banking, y�all! |
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Adventurer
Joined: 28 Jan 2006
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| Posted: Sun Mar 16, 2008 8:09 pm Post subject: |
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To be honest, the more I hear about Korea's banking policies and blatant bias against foreigners, the more I think if they have such a bias against us, then they don't simply just tell our people in the US and Canada, and people can refrain from buying their cars and buy Japanese, German, and American cars. This is not fair play when it comes to banking, and Korea needs to open up to us, since we've invested so much into helping them modernize their country, and we've been allies for so long, and Korea has had such good ties with the West, so why not honour that relationship by being kinder to Westerners whether they are businessmen or teachers.
If it is okay to sell cars to us, then it should be okay to be bank with us, because we can always by cars and cell phones from someone else... |
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PeteJB
Joined: 06 Jul 2007
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| Posted: Sun Mar 16, 2008 8:41 pm Post subject: |
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| Talking about it won't get anywhere. It has to be brought to official attention (either in or out of Korea). |
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articulate_ink
Joined: 23 Mar 2004
Location: Left Korea in 2008. Hong Kong now.
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| Posted: Sun Mar 16, 2008 8:56 pm Post subject: |
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Many recent college grads come to Korea intending to pay down their student loans. But what's the point of working in a country where you're highly likely to be denied access to your own money?
After 3 years, I've got most of the work-arounds in place. I have an international ATM card. I have a credit card. I have a remittance account to transfer money offshore automatically, without needing to interact with bank tellers. I still don't have Internet banking via my Korean banks.
On Friday I had to do a wire transfer. I tried using SC, since that's where most of my money is. They wouldn't let me. After half an hour of communication breakdowns and tellers sucking air through their lower teeth, one explained that because I've been using another bank for my previous transfers, it's not allowed. Some rule or regulation (which may or may not exist) requires that all transfers be done from the same bank. Naturally, they broke this news just before 4.30 on a Friday. I had time to dash to KEB (this was in Itaewon, and the branches are a few buildings away from each other) to complete the transaction.
I suppose that there is an endless supply of 23-year-olds with new degrees, huge student loans to repay, and lousy job prospects in the West. There will always be fresh white meat for hagwon owners to eat.
If anyone's reading this and contemplating coming over here, I'd encourage you not to dismiss these issues with some inane line like 'It's about accepting challenges.' Being denied access to your own money -- within Korea or abroad -- is an attack on a foreign resident's basic safety and well-being. If you're intent on coming to Korea, do the homework, ask the questions, and know exactly what you're getting yourself into. |
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Bibbitybop
Joined: 22 Feb 2006
Location: Seoul
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| Posted: Sun Mar 16, 2008 9:01 pm Post subject: |
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This has more to do with investments, not personal banking, but this line rings true for both of them.
"South Korea has grown into the world's 13th largest economy and the 11th largest trading nation over the past 60 years, rising from the ashes of the 1950-53 Korea War. But the country still has a long way to go to achieve its goal of becoming an international financial center as it has even failed to make it into the top 50 in the latest international financial hub ranking...
...[Breen]said what it means to be a financial hub is different to the Korean government and people from international communities. ``Being a financial center in Seoul means a strong local financial industry, whereas to international communities, it means a regulation-free environment where all types of financial activities are allowed,'' Breen said."
Here is the full article, and you can bet many Koreans want this to change.
http://www.koreatimes.co.kr/www/news/biz/2008/03/123_19856.html
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By Lee Hyo-sik
Staff Reporter
South Korea has grown into the world's 13th largest economy and the 11th largest trading nation over the past 60 years, rising from the ashes of the 1950-53 Korea War. But the country still has a long way to go to achieve its goal of becoming an international financial center as it has even failed to make it into the top 50 in the latest international financial hub ranking.
The Roh Moo-hyun administration championed the financial hub plan and unveiled a series of ambitious measures, including providing tax breaks over the past five years to turn the country into an international financial powerhouse.
But the Roh government apparently failed due to anti-foreign sentiment, inconsistent policies and militant labor unions.
Foreign analysts have pointed out that Korea's anti-foreign sentiment is the biggest obstacle to the hub plan, adding the country should deregulate the financial market, lower taxes, and create a more foreign-friendly residential and educational environment.
Citing its Global Financial Centers Index (GFCI), the City of London Corp. Thursday announced a list of the top 50 financial centers in the world. London topped the list, followed by New York, Hong Kong and Singapore.
The index is based on a number of existing rankings in combination with a regular survey of 1,200 senior industry figures.
Among Asian cities, Tokyo came in ninth, followed by Dubai at 24th. Even Shanghai and Beijing put their names on the list, ranking 31st and 46th, respectively.
Foreign analysts here said it is no surprise that Korea is lagging far behind its Asian rivals in the race to become a regional financial hub.
``Seoul did not make it to the list because it is not an international financial center. I do not think Korea wants to be one,'' said Michael Breen, president of Insight Communications Consultants in Seoul.
He said what it means to be a financial hub is different to the Korean government and people from international communities. ``Being a financial center in Seoul means a strong local financial industry, whereas to international communities, it means a regulation-free environment where all types of financial activities are allowed,'' Breen said.
He said Korea's public sentiment opposes foreign companies and investors, well illustrated by the Lone Star case, adding it is the mentality of the people who don't want Seoul to be a global financial center.
``Reforming the taxation system and building more international schools and hospitals will definitely help Korea attract more foreign investment. But above all, the government should first decide whether or not it wants to become a place like Singapore or Dubai,'' Breen suggested.
Meanwhile, Seoul Financial Forum made a number of policy suggestions to the Lee Myung-bak government early last month.
It said the new government should act in a more coordinated manner than the previous administration, adding it should set up a presidential-level program management office that will effectively coordinate all facets of the government's efforts for the financial hub plan.
It also stressed the government should implement policy changes and reforms in a coherent manner, which is the key to creating a business-friendly environment.
The forum also suggested that the government should strengthen professional capabilities of regulators, reform the tax system and administration, improve management-labor relations and ease anti-foreigner sentiment. |
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indytrucks
Joined: 09 Apr 2003
Location: The Shelf
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| Posted: Sun Mar 16, 2008 9:03 pm Post subject: |
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| I've had an international bank card for over seven years, first from KB and now from SC. It's worked in countries from Thailand to South Africa to the United States. |
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laogaiguk
Joined: 06 Dec 2005
Location: somewhere in Korea
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| Posted: Sun Mar 16, 2008 9:06 pm Post subject: |
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| indytrucks wrote: |
| I've had an international bank card for over seven years, first from KB and now from SC. It's worked in countries from Thailand to South Africa to the United States. |
The only thing you need to know about Korea is it's hit or miss. If it doesn't work one day, try another day or another person. This country so has it's head up its ass.
I've got one too, worked in South East Asia, America and Canada. |
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lowpo
Joined: 01 Mar 2007
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| Posted: Sun Mar 16, 2008 9:12 pm Post subject: |
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| indytrucks wrote: |
| I've had an international bank card for over seven years, first from KB and now from SC. It's worked in countries from Thailand to South Africa to the United States. |
I live in a small town with about 11 PS teachers. About half have international bank cards and the rest of us can't get an international ATM card. The funny thing is that we all bank at the same bank.
When my wife and I go on vacation this summer we are going to withdraw all our money and take it out of the country so the bank can't get the interest from our money.
I know there are banking problems in all countries. Last month I transfered some money home and it took 1 day. Then I transfered the money to my investment account from my bank and it took 5 days to transfer the money.
Last edited by lowpo on Sun Mar 16, 2008 10:01 pm; edited 1 time in total |
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Bibbitybop
Joined: 22 Feb 2006
Location: Seoul
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| Posted: Sun Mar 16, 2008 9:15 pm Post subject: |
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| indytrucks wrote: |
| I've had an international bank card for over seven years, first from KB and now from SC. It's worked in countries from Thailand to South Africa to the United States. |
I have on from Hana bank from over a year ago. I had to ask for it specifically after my ATM card, which read "international," wouldn't work in China except at HSBC ATMs. I did some research and found it would only work at banks that do business in Korea. I went to Hana bank, asked for a card that works globally at all ATMs and I got one. Now my friends say they won't issue those anymore. I read on this site some people's got turned off and wouldn't work. But mine works like a champ. It is hit and miss. |
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Adventurer
Joined: 28 Jan 2006
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| Posted: Mon Mar 17, 2008 6:49 am Post subject: |
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I am a person who thinks money is important, but I also think my self-respect is important as a person and a foreigner. If Korea won't treat me well enough as an expat, then I won't be upset about it, I refuse to be upset, but I would simply vote with my feet and go elsewhere where I am valued. Everyone wants to be accorded proper working or social conditions, and Korea must understand that or risk its economic future.
Anyway, if Koreans want to destroy their financial future, it is up to them, but the government would be wise to make some major changes soon. We don't want slogans in the international community, we want results and positive action that would benefit Koreans and foreigners alike. |
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Suwoner10
Joined: 10 Dec 2007
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| Posted: Mon Mar 17, 2008 3:48 pm Post subject: |
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I went to Hong Kong Friday. Walked into a bank at 5:15PM. Walked out at 5:29 with a savings and checking account, international check/debit card, and they will have a credit card sent to me (in Korea!) within 7 business days.
Korea Farting! |
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lowpo
Joined: 01 Mar 2007
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| Posted: Mon Mar 17, 2008 4:45 pm Post subject: |
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| Suwoner10 wrote: |
I went to Hong Kong Friday. Walked into a bank at 5:15PM. Walked out at 5:29 with a savings and checking account, international check/debit card, and they will have a credit card sent to me (in Korea!) within 7 business days.
Korea Farting! |
Do you just wire your money every month to the bank in Hong Kong. |
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komerican
Joined: 17 Dec 2006
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| Posted: Mon Mar 17, 2008 5:32 pm Post subject: |
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| Adventurer wrote: |
I am a person who thinks money is important, but I also think my self-respect is important as a person and a foreigner. If Korea won't treat me well enough as an expat, then I won't be upset about it, I refuse to be upset, but I would simply vote with my feet and go elsewhere where I am valued. Everyone wants to be accorded proper working or social conditions, and Korea must understand that or risk its economic future.
Anyway, if Koreans want to destroy their financial future, it is up to them, but the government would be wise to make some major changes soon. We don't want slogans in the international community, we want results and positive action that would benefit Koreans and foreigners alike. |
You're being a tad melodramatic. Korea's "economic future" does not hinge on this in any way.
Also, many of Korea's banks are now owned by foreigners. The KEB bank for instance has a foreign president!. Banks, unsurprisingly, are making this decision not because you're a foreigner but on the basis of the bottom line--profits.
http://www.koreatimes.co.kr/www/news/biz/biz_view.asp?newsIdx=18166&categoryCode=124
Is Korea Exchange Bank President Richard Wacker a xenophobe who is deliberately misinterpreting the so called �non-existent� banking laws or regulations? Of course not.
Look, just because there is no law does not make it fine to do something. Regulations and industry practice are just as important. For example, the SEC (Securities and Exchange Commission) makes regulations. Try breaking some of those regs and you�ll end up in a Federal slammer pretty quickly.
Given the small number and the transient nature of most English teachers I don�t think it�s so unreasonable for some banks to deny international bank cards. Of course I think banks should give these international cards to foreigners with valid work visas but I also see how it's just more work than it is worth for a bank.
Foreigners before coming to Korea only need to get bank cards in their home countries with internet access. How simple is that? It shouldn't be all that difficult to maintain those cards. This is really not all that different from what happens in the West. For example, in the US, foreign students are only eligible to receive secured credit cards.
As I pointed out before 75 million people in America do not even have bank accounts and about 12 million American citizens can�t even afford a bank account even though banks continue to make record profits, hand over fist.
The West Sparkling!
http://www.usatoday.com/news/nation/2006-01-11-money-laundering_x.htm
��Immigrants and others among the estimated 75 million people in the USA who do not have bank accounts, the report said�� |
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stevieg4ever
Joined: 11 Feb 2006
Location: London, England
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| Posted: Mon Mar 17, 2008 5:45 pm Post subject: |
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| I may be off of the mark here but do you think the fact they might not want foreigners withdrawing Korean money from their Korean bank accounts and spending that money abroad may have something to with this issue?? |
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komerican
Joined: 17 Dec 2006
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| Posted: Mon Mar 17, 2008 6:13 pm Post subject: |
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| stevieg4ever wrote: |
| I may be off of the mark here but do you think the fact they might not want foreigners withdrawing Korean money from their Korean bank accounts and spending that money abroad may have something to with this issue?? |
That probably explains the original policy considerations but I don't think that really explains why it's still in effect today. For example, Korea has actually eased financial limits for buying overseas real property as the Won has increased in value. Foreigners sending money abroad would have helped to devalue the won, which is what the Roh administration wanted.
I just think that there isn't enough of a financial incentive for Korean banks to cater to what is a very small market. Hong Kong is not a good comparison because of its history as a western colony and because it has a much larger and diverse expat community. |
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