Report: North Korea central bank regulating domestic wire transfers

SEOUL, June 7 (UPI) -- North Korea has begun wire transfer and loan services through its central bank, a source in the country said.

Regional banks have begun "partly" offering the services, and steps in completing the transactions have changed, Radio Free Asia reported.

"If, for example, a factory in Pyongyang wants to send 1 million North Korean won to another factory in Chongjin, the Pyongyang enterprise must [now] deposit the cash and then notify the Chongjin company," the source told RFA. "Afterward the Chongjin contact must claim the money at the local branch of the bank."

The source also said authorities are "ensuring compatibility" between the central bank and the branches that can enable the wire transfers. The central bank is acting as mediator for transactions that used to take place directly between firms and enterprises, according to the report.

In the past, North Korea factories were assigned a one-year plan, and fiat money was issued according to an annual budget, but after the collapse of the planned economy, check payments became worthless and in-kind or cash transactions became the norm, leaving the central bank out of the new economy, the source said.

An unidentified North Korean expert in the South told RFA the move could be another source of income for Pyongyang as it copes with heavier economic sanctions.

North Korea is strengthening its grip on domestic power in other ways.

North Koreans who secretly use Chinese mobile phones to keep in touch with relatives on the outside have been using a South Korean messenger application, Kakao Talk, but the state is cracking down on the activity, Daily NK reported.

The messenger application could avoid detection from state security devices, according to the report.