It is reported that North Korea has decided to extend the issuance authority of cashless bank statements, a means of payment between businesses, to local commercial banks. It is believed to be aimed at decentralizing the centralized financial system and enhancing the reliability of local banks.
According to a high-ranking source inside Daily NK on the 22nd, North Korean authorities have been expanding the authority to issue and manage cashless bank statements issued by the Central Bank of Korea since last month so that local banks can also directly issue and manage them.
A cashless check is a kind of payment guarantee issued by a bank so that transactions can be conducted without cash.
In order for a company to be issued a cashless check, it must open a bank account with the central bank and establish a significant amount of deposit or provide collateral of similar value.
However, from now on, each regional bank will be able to verify the value of the company’s collateral and issue a cashless statement on its own.
Since Kim Jong-un took power, North Korea has introduced a financial institution settlement system to set up commercial banks in the provinces, and have the local commercial banks make profits through their own financial business and pay some of them to the center.
In the same context, North Korea seems to have given local commercial banks the authority to issue and manage cashless bank statements. It is interpreted as a measure to promote more business-to-business transactions and strengthen the authority and responsibility of local commercial banks.
Regarding this, Choi Ji-young, a researcher at the Institute for National Unification, said in a phone call with Dong-A Ilbo, “Since North Korea introduced the financial institution debt system, it is carrying out financial reforms that strengthen the responsibility of local commercial banks under the existing unitary banking system.” It seems that they gave them autonomy and expanded some of their rights in the process of paying the bill.”
Local banks, which failed to play their role due to lack of operating funds and low reliability, were able to play a role in the distribution of funds for local companies, such as being given the authority to issue cashless bank statements. It is also believed to be related to policy.
According to Dong-A Ilbo’s coverage, the North Korean authorities recently forced not only teachers, but also party, administrative, and judicial agency workers, trade agency employees, provincial, city, and county commercial management offices and employees at convenience service organizations to subscribe to an installment savings product that accumulates a certain amount every month. did. (▶Read related articles: Forced installment savings account and increased targets… Trick to raise insufficient funds?)
Since this deposit will be managed by local banks, it is expected that the funding sources of local banks will be slightly expanded compared to the existing ones. It seems that the intention is to facilitate corporate loan transactions by attracting idle funds from individuals through the mandatory savings account and securing a source of funds that local banks can borrow based on this.
In the midst of this, it is known that corporate money tickets, which functioned similarly to cashless bank statements, are not functioning.
The North Korean authorities have allowed 50,000 won bills to be used in business transactions, but the amount is too small to make transactions inconvenient, and cashless bills that can be transacted in place of cash already exist, so companies do not dare to use them, the source explained. .
Although North Korea has not officially abolished corporate money tickets, it is interpreted that they have naturally disappeared from the market as no one uses them.
Source: DailyNK by www.dailynk.com.
*The article has been translated based on the content of DailyNK by www.dailynk.com. If there is any problem regarding the content, copyright, please leave a report below the article. We will try to process as quickly as possible to protect the rights of the author. Thank you very much!
*We just want readers to access information more quickly and easily with other multilingual content, instead of information only available in a certain language.
*We always respect the copyright of the content of the author and always include the original link of the source article.If the author disagrees, just leave the report below the article, the article will be edited or deleted at the request of the author. Thanks very much! Best regards!