A view of Kookmin Bank building in Yeouido, Seoul.

President Lee Kun-ho of Kookmin Bank called for an overall change in the bank’s systems from its roots, especially the approval and internal report systems so that the rivalry between one channel that includes the employees of Kookmin Bank and the other channel, which includes the employees of the Korea Housing Bank would get along well without animosity. Kookmin Bank took over the Korea Housing Bank 12 years ago and the employees of the two banks have been at odds at times, especially in personnel matters.

President Lee also is determined to take care of the housing bond problems as soon as possible so that no customer will incur losses by way of a management reform committee with the CEO taking direct control of the new body.

Financial industry sources said President Lee called a meeting of the Management Reform Committee on Nov. 28 to draw up the roadmap for the committee’s operation including detailed subjects that the committee should address.

The new committee is comprised of 20 high-ranking personnel of the bank including 18 headquarter managers, seven of whom are vice presidents, and two auditors.

The committee will meet every Wednes-day to discuss changes in the bank’s operation systems and check on the progress of various changes that the committee has decided to implement.

The bank has had to cope with a number of problems including fraudulent loans made by the manager of the bank’s Tokyo branch, the embezzlement of Kookmin Bank bonds, and other mishaps, and the current management has been working hard to solve the problems although their predecessors are the responsible parties since the incidents occurred during their tenure at the bank.

The committee has decided to solve the matters as quickly as they can by reimbursing the large bond holders, taking measures to prevent a recurrence of such incidents, streamlining the internal report system, and reforming the bank’s corporate culture, officials of the bank said.

In detail, the reform measures will be focused on four major areas such as customer service, personnel matters, external matters, and internal controls, with four headquarters managers taking control of the different areas: the Customer Satisfaction manager, the HR Headquarters manager, the Strategy Headquarters manager, and the Law Adherence Headquarters manager.

The managers should get the approval of the committee on their reform plans and execute them as approved and they are also required to monitor the progress of the implementation of their plans and report them to the committee from time to time. In fact, the matters that were approved by the committee should be carried out immediately under the reform of the bank’s operation.

The senior director-vice president is to head the expert committee to control the entire process of implementation of the measures approved by the committee.

The permanent auditor can investigate the problems that may occur during the implementation of the plans and recommend punishment of those found responsible and measures to improve the plans including the systems and the process of the implementation of the approved plans.

 In the meantime, President Lee, in his apology statement regarding the bank’s mishaps on Nov. 27, said he will take every measure to avoid financial damages to the customers and called for a morning meeting of around 100 key officers of the bank on Nov. 28 and resolved to do everything to recover the customers’ trust in the bank and the ethical standards of all employees.