Shinhan Bank as a Model... Major Banks Rapidly Establish 'Prompt and Active' Support Guidelines for COVID-19 Damage

Speed Up with Special Review Team Activation
Measures to Strengthen Branch Office Approval Authority

[Asia Economy Reporter Kim Hyo-jin] Major banks are lowering the barriers for financial support to companies and small business owners affected by the novel coronavirus infection (COVID-19) and are issuing a series of operational guidelines to simplify procedures such as screening. As the financial authorities introduced Shinhan Bank's operational guidelines as a model example, other banks have also accelerated their steps.

According to the banking sector on the 11th, Shinhan Bank recently issued screening guidelines regarding financial support for small business owners affected by COVID-19 to all branches nationwide. The guidelines include determining interest rates and limits based on a credit rating upgraded by three levels, and for loans maturing within April, extending the maturity by six months collectively without screening. To reduce loan screening periods, the plan also includes deciding support primarily through the branch manager's full authority.

Woori Bank decided the day before to operate a special dedicated screening team to facilitate financial support for individual business owners and small and medium enterprises in the Daegu and Gyeongbuk regions. The special dedicated screening team will select priority support businesses for COVID-19 in the Daegu and Gyeongbuk areas and implement a 'rapid screening support' system that notifies the screening results within two business days for loan applications from those companies. Additionally, branch managers in Daegu and Gyeongbuk will be temporarily granted additional loan approval authority.

NH Nonghyup Bank established the 'COVID-19 Emergency Financial Support Committee' chaired by the vice president of the credit screening division on the same day. It also allowed non-face-to-face (telephone) processing for loan maturity extensions for individuals or individual business owners in the Daegu and Gyeongbuk regions.

Hana Bank is implementing a plan to support management stabilization funds at the discretion of branches even without proof of damage from the relevant administrative authorities. When existing loans reach maturity or installment repayment dates, repayment can be deferred for up to one year without principal repayment, and interest rate reductions of up to 1.3 percentage points are also provided. Upon receiving such requests, the screening officer reviews and responds with the decision on the same day.

KB Kookmin Bank is operating a service that accepts guarantee applications at bank branches without visiting the regional credit guarantee foundation branch when processing guaranteed loans. It is also running a comprehensive consulting system for SOHO customers to support the resolution of management difficulties.

The Financial Services Commission announced the results of an on-site inspection of COVID-19 financial support the day before and presented Shinhan Bank's relaxed screening guidelines as a 'model practice' for the banking sector. The financial authorities inspected the COVID-19 support operations at frontline windows of major banks and policy financial institutions from the 3rd to the 6th.

According to the financial authorities, most financial company branches are actively responding by operating dedicated counters and staff, and distributing COVID-19 related consultation manuals from headquarters (main offices).

However, a financial authority official pointed out, "In some business sites, procedures such as screening remain excessively stringent, making access difficult for affected companies or small business owners." The financial authorities plan to continuously encourage headquarters to prepare and deliver relaxed credit screening application guidelines to frontline windows to ensure smooth financial support from private financial companies related to COVID-19 damage.

This content was produced with the assistance of AI translation services.