[비즈한국] With the government set to announce its second-phase plan for relocating public institutions to provincial areas in the second half of the year, opposition within the financial sector is intensifying. The NongHyup labor union held a large-scale rally against discussions surrounding the provincial relocation of the National Agricultural Cooperative Federation (NACF) and its financial affiliates, while state-run bank unions have also announced plans for a joint struggle. On the other hand, various local governments have begun competing to attract these public institutions, signaling that the debate over their relocation is heating up.
The Korean Financial Industry Union's NH NongHyup Branch (NongHyup Union) continues to hold large-scale protests against the relocation of its headquarters. The NongHyup branch represents eight entities, including the NACF, NongHyup Economic Holdings, NongHyup Financial Group, Hanaro Distribution, NongHyup Bank, NongHyup Life Insurance, NongHyup Property & Casualty Insurance, and NongHyup Yanggok. Following a leadership rally in front of the Ministry of Land, Infrastructure and Transport in Sejong City on July 23, the union held a protest on the 29th at Gwanghwamun, gathering approximately 4,000 members from across the country.
These protests were sparked by rumors that the NACF and its financial affiliates would be included in the second wave of public institution relocations. Currently, the headquarters of the NACF, its bank, and its insurance subsidiaries are clustered near Seodaemun Station in Jung-gu, Seoul. The union stated, "We have taken preemptive action as external pressure and unfounded rumors regarding the government's second relocation plan have escalated."
However, the Ministry of Land, Infrastructure and Transport clarified on the 15th regarding media reports on the NongHyup relocation, stating, "Nothing has been decided regarding the institutions or regions for relocation," and added, "We are currently reviewing the plan to announce the second phase of public institution relocation within the year."
The NongHyup union is opposing the move based on legal and economic grounds. First, it pointed out that the NACF is not legally classified as a public institution subject to relocation. As an entity established under the Agricultural Cooperative Act, the NACF falls under the Act on the Management of Public Institutions, which explicitly excludes "institutions established for the purpose of mutual aid, welfare promotion, rights protection, and maintenance of business order among members" from the definition of a public institution.
The union argued, "Even though the Ministry knows that NongHyup does not qualify as a public institution for relocation, they are reportedly preparing a separate amendment, citing it as a political decision. This would set a precedent that undermines legal stability and predictability."
The financial burden of the relocation is another key reason for their opposition. The union estimated that the costs associated with moving the headquarters would exceed at least 252 billion won, excluding land purchase costs. This figure includes 213 billion won for new building construction and 39 billion won for employee residential support. The union stated, "There is a concern that such massive relocation costs will eat into the funds earmarked for supporting farmers," adding, "This would harm support functions such as strengthening farmers' competitiveness and promoting their shared interests."
They also argued that the efficiency of the relocation would be minimal. Excluding Seoul, Gyeonggi, and Incheon, 70,182 NongHyup employees are already working in regional areas, accounting for 73% of the total workforce (96,103). If you exclude personnel who must remain in the metropolitan area for essential duties, the number of employees available to move is only about 460, meaning the impact on the local economy would be negligible.
In its "2026 Second-Half Economic Growth Strategy" released on the 14th, the government set a goal to announce the second-phase relocation plan during the second half of the year and begin the relocation process, starting with lead institutions, in 2027. The government explained, "To redistribute national functions concentrated in the capital region, we will minimize institutions remaining in the capital and establish relocation plans based on the principle of cluster placement, linked to the '5-Pole, 3-Special' growth strategy (five mega-city regions and three special autonomous provinces)."
As the announcement date for the second relocation plan approaches, unions of the three state-run banks—Korea Development Bank (KDB), Industrial Bank of Korea (IBK), and the Export-Import Bank of Korea (Korea Eximbank)—have also announced a joint rally for August to oppose their own provincial relocations. During the previous administration, KDB pushed to relocate to Busan as a national agenda, but the move stalled due to a failure to amend the law. In the meantime, KDB has suffered from long-term internal labor-management friction and a wave of resignations among junior staff.
Meanwhile, despite fierce opposition from the financial sector, regional areas are aggressively campaigning to attract these institutions. In particular, several regions including the Jeonnam-Gwangju Integrated City, Jeonbuk Special Self-Governing Province, and Gyeongsangbuk-do are vying to host the NACF headquarters. On July 15 and 20, agricultural and livestock federations in Jeonbuk held press conferences urging the relocation of the NACF headquarters to their province. On the 22nd, the Gyeongbuk Agricultural Organization Council also demanded the headquarters' relocation to Gyeongbuk. The Jeonnam-Gwangju Integrated City, seen as a leading candidate, has been requesting the relocation of the NACF headquarters since the initial stages of its integration process.
Daegu City announced its attraction strategy for the second phase of relocations during a National Assembly forum on the 28th. Daegu aims to attract 34 institutions, including IBK, the Korea Trade Insurance Corporation, and the Korea Trade-Investment Promotion Agency (KOTRA). Busan, which already has a financial hub, is also pushing to attract public financial institutions, such as state-run banks, as well as institutions affiliated with the Ministry of Oceans and Fisheries. A financial industry official said, "The debate over provincial relocation is an issue that recurs with every administration. Since industry opposition is always strong, we will have to wait and see how the situation develops."