SEOUL – South Korea will allow new players to enter its banking industry for the first time in 30 years to boost competition in the sector, which is currently dominated by five major banks.

The country’s financial regulator will permit licenses of nationwide commercial banks to existing financial companies, the Financial Services Commission (FSC) said in a statement on Wednesday, the first time it’s doing so since 1992 with the move seen as paving the way for lower interest rate costs for consumers.

Daegu Bank, a regional banking unit of DGB Financial Group Inc., has an intention to transform into a nationwide bank, according to the statement. 

The country’s move comes after President Yoon Suk Yeol earlier this year criticized banks for having what it called a “money feast”: booking “easy” profits from the gap between interest rates on deposits and those on loans, while paying their executives big bonuses as borrowers struggled to pay high interest rates.

If Daegu Bank submits its application in the near future, the regulator would grant it a license within this year after a review, FSC’s Vice Chairman Kim So-young told reporters. Daegu Bank would be able to open branches nationwide and expand loans to big companies if it gets the approval.   

The financial regulator will also allow more online-only banks and ease the loan-to-deposit rules for foreign banks’ local branches, according to the statement.  BLOOMBERG