NH Financial, IBK embrace whistleblower system to curb employee misconduct
Automated teller machines in Seoul / Yonhap
NongHyup Financial Group and state-run lender Industrial Bank of Korea (IBK) have embraced a whistleblower system in a move to prevent employee misconduct, including embezzlement and poor screening of loans, market watchers said Wednesday.
Propelling the rushed efforts are poorly granted loans of over 88 billion won ($60 million) reported at the state lender and 108 billion won for the agriculture-oriented financing service provider.
The IBK figure was 24 billion won at the time of the occurrence, but further investigation revealed the amount to be nearly triple the initial figure.
This adds to over 187 billion won in financial irregularities at local banks last year, a five-year high and a 27-fold increase from 6.8 billion won in 2020.
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The state lender said it established a committee to oversee an internal whistleblowing system. The five-member committee with three outside figures will spearhead reform and report progress to the board of directors.
The lender’s whistleblowing system, K-Whistle, operated by Korea Business Environment Institute, will allow IBK employees to report misconduct suspicions without privacy concerns.
The lender will update the system to allow former employees and non-IBK figures to report suspicious activities.
“We regret the irregularities and do our best to prevent the recurrence of this sort,” an IBK official said.
NongHyup Financial also introduced a similar system, Red Whistle Helpline.
The new system was separated from the previous Red Whistle, seeking to bolster whistleblowers' privacy protection. The provided data will be encrypted and blocked from IP tracking.
NongHyup Financial Group Chairman Lee Chan-woo called for the swift and full implementation of the anonymous reporting.
“NongHyup Financial should earn the trust of customers through painstaking efforts to root out employee misconduct,” Lee said. “We will continue efforts to prevent irregularities."