SEOUL. Dec 31 Four debt-stricken banks will lie merged under a 83 billion dollar government-led linan< ial holding company by the end ol next March. South Korea's financial industry watchdog said I riday. reports AFP

The announcement marked ’ an acceleration of the governments consolidation drive in the industry. It also came as operations at the country's two key commercial banks returned to normal after a week-long strike in protest over their proposed merger.

The four banks -- Hanvit. Peace. Kwangju and Kyongnam -- will be Integrated under a financial holding company to be set up during the first quarter of next year, the Financial Supervisory Commission (FSC) said.

The FSC said the new finan-

cial holding company will become a financial giant with combined assets of 104 trillion won (83 billion dollars! as at the end of June this year It would become the world's 84th largest financial institution.

Seoulbank. another troubled bank, would also become part ol the financial holding company if (he government fails to sell it to foreigners by the end of June, it said.

The FSC will also look at adding other weak merchant banks and security linns to the new holding company.

However, the four banks will be allowed to operate independently while being restructured until June 2002.

Kookmin Bank and Housing and Commercial Bank (HCB) were operating normally Friday after a week-long union protest at their merger plan.

Union members at the two

banks had gone on strike last Friday. when the merger was announced Workers Icared mass layoffs as a result of (he marriage.

But the strike, which crippled operations at the two banks' 1.127 branches nationwide. ended as riot police crushed a sit-in by some 10.000 protesters Wednesday

The Korean Financial industry Union, an association of bank unions, also called off a , 'aimed industry-wide strike at lb banks Thursday.

"All bank offices opened for normal business today." said spokesmen from Kookmin and HCB on Friday.

The merger of Kookmin and HCB will create the country’s largest bank with 122.2 trillion won 1100 billion dollars) in combined customer deposits. 19.888 employees and 1.149 branches, officials said.