Article 37 of the Korean Bank Act provides for various provisions such as definition of a bank's subsidiary and regulations on a bank's transactions with its subsidiary. According to the Bank Act, a bank's subsidiary is defined as a “company of which 15% or more of shares with voting rights is owned by a bank,” and a bank's subsidiary is divided into a financial subsidiary and a non-financial subsidiary. In order to enhance the reasonableness of regulations on a bank's subsidiary, the following measures are recommended: first, since it is unclear whether a bank may have its overseas subsidiary, a revision of the relevant provisions is needed for clarification; second, because it is unclear whether an approval from a financial supervisory authority is required in case of acquiring shares of a financial subsidiary, measures for clarification are needed; third, since it is controversial whether a foreign bank branch in Korea may have its subsidiary, the provisions for the prohibition needs to be added in the Bank Act; finally, the current 15% ceiling for the bank subsidiary definition purpose should increase to 25%, and the concept of 'de facto control' needs to be adopted to the definition of a bank's subsidiary.  

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