South Korea's financial regulator on Sunday rejected two bids to establish the nation's third and fourth Internet-only banks, dampening expectations for the future of the industry. 

The Financial Services Commission(FSC) on Sunday decided not to approve the applications made by two separate consortiums led by online brokerage provider Kiwoom Securities and fintech startup Viva Republica, respectively.

The FSC said its decision was aided by a recommendation from an independent evaluation committee that assessed both consortiums’ bids as inadequate. 

The outside evaluators reportedly said the Kiwoom consortium's plan lacked feasibility and innovation, while the Viva Republic’s did not demonstrate it could finance the plan.

The FSC said it will accept further applications to establish online banks sometime during the third quarter of this year, and will announce their preliminary approval or rejection of the bids in the fourth quarter.