"Support for COVID-19 Damage: Lower Barriers and Increase Speed"... Banks Step Up Efforts (Comprehensive)

Special Review Team Activated to Increase Speed
Measures to Strengthen Branch Autonomy Also Considered

[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 issuing a series of operational guidelines to simplify procedures such as screening. The financial authorities introduced Shinhan Bank's operational guidelines as a model, accelerating the steps taken by other banks.

According to the banking sector on the 11th, Shinhan Bank recently issued screening guidelines related to 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 raised by three levels, and for loans maturing within April, extending the maturity by six months without screening. To shorten the loan screening period, the plan also includes deciding support in principle by 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 Daegu and Gyeongbuk 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 mature or installment repayments are due, repayment can be deferred for up to one year without principal repayment, and interest rate reductions of up to 1.3 percentage points are 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 branches 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 on-site inspections 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.

The financial authorities explained that most financial company branches are actively responding, with dedicated counters and staff performing tasks and headquarters distributing COVID-19 related consultation manuals.

However, a financial authority official pointed out, "In some business sites, procedures such as screening are still excessively strict, making it difficult for affected companies or small business owners to access support smoothly." 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.

Regarding concerns that 70-90% of funding applications from COVID-19 affected companies are concentrated on guaranteed loans from regional credit guarantee foundations, causing delays in guarantee screening, the financial authorities decided to expand the current scope of bank consignment tasks such as loan document reception, preparation guidance, and on-site inspections, and to deploy retired personnel from policy financial institutions to support these efforts.

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