Affiliate transactions between banks or their subsidiaries, on the one hand, and parent companies or non-bank affiliates, on the other hand, may result in conflict of interests. Furthermore, in case where bank managements are subject to factual influences from these interested parties, the safety and soundness of banks may be seriously damaged. The most representative one among these interested parties is either a majority shareholder or a parent bank holding company who may have a substantial influence on the elections and dismissals of bank managements. Almost of all the countries have provided troublesome conflict of interest transactions and strong fire-walls or chinese-walls against them, thereby protecting the safety and soundness of banks in the end. Article 35-2 through Article 35-5 of the Banking Act of Korea are conflict of interest regulations by majority shareholders modeled on the Sections 23A and 23B of the U.S. Federal Reserve Act. Section 23A places quantitative limits on affiliate transactions, forbids depository institutions from purchasing low-quality assets from their non-bank affiliates, and requires loans by banks or thrifts to their non-bank affiliates to be fully collateralized. Section 23B prohibits favortism in affiliate transactions and requires all such transactions to be conducted on arms-length basis. The Financial Modernization Act, so called the Gramm-Leach-Bliley Act of 1999, extended Sections 23A and 23B to transactions between insured banks and their financial subsidiaries. This paper aims to analyze Article 35-2 through Article 35-5 of the Banking Act of Korea in comparison with the model Act. Part Ⅱ considers briefly the historial background and content of Sections 23A and 23B of the U.S. Federal Reserve Act. Detailed analyses of Article 35-2 through Article 35-5 are discussed in Part Ⅲ through Part Ⅵ. Part Ⅶ is the conclusionary remark of this paper.