ISLAMABAD: South Korean lenders have adopted fresh guidelines on their hiring procedures as part of efforts to eradicate irregularities and boost transparency, the bank association said Tuesday.

The move came in the wake of a series of hiring irregularities at some financial firms and state-run institutions that have caused the public outcry.

Under the new guidelines approved by heads of 19 local lenders on Monday, banks shall re-introduce written exams in order to assess applicants’ capabilities in a fairer manner. Such written exams were largely abolished due to concerns over their possible side effects, such as stoking unnecessary competition.

Outside experts are to be invited to take part in at least one phase of the hiring procedure, such as document-screening, written exams or interviews, according to the Korea Federation of Banks (KFB).

Banks are also to adopt “blind recruitment,” where officials are not given certain identifying information on applicants prior to having interviews with them, with lenders being banned from discriminating against potential employees based on their gender, age, alma mater or region of birth.

Special selection through recommendation shall be abolished, while those involved in hiring irregularities may face penalties, according to the guidelines which also include measures to compensate the applicants victimized by any unfair actions.

Though these measures are self-regulating and not legally binding, all KFB member banks, including Shinhan Bank, Woori Bank, KEB Hana Bank, Kookmin Bank and Citibank Korea, vowed to accept the rules, according to the association.

“The guidelines will help banks prevent potential hiring irregularities in advance and improve fairness so as to win public confidence,” the KFB said in a statement.

Similar steps could be taken by other financial sectors, such as securities firms and credit card companies, according to industry watchers.

Since last year, allegations have emerged that some banks gave undue favours or special treatment to job applicants with ties to top bank executives or top-tier customers.

Wrapping up an eight-month probe, the prosecution on Sunday indicted 38 people connected to unlawful hiring in cases involving Kookmin, KEB Hana, and Woori banks.