South Korea's Financial Services Commission on May 26 rejected applications filed by the two remaining consortia to establish digital banks in the country.

The consortia are led by Kiwoom Securities Co. Ltd. and Viva Republica Co Ltd., which is the operator of peer-to-peer payment platform Toss. The announcement came after the FSC on May 7 rejected another application filed by Anyband Smart Bank.

The regulator's decision was based on recommendations from an outside evaluation committee, which cited business feasibility and financing capacity, respectively, as the reasons for rejecting the applications of Kiwoom Securities and Viva Republica.

South Korea currently has two digital banks: K Bank and Kakao Bank. The FSC has been seeking a third Internet-only bank operator under a new dedicated law, put into force in January, which allows IT companies to own up to 34% of a digital bank.