The Financial Supervisory Service Begins Inspection of Banks for 'Housing Loan Regulation Violations'

Yoon Seok-heon, Governor of the Financial Supervisory Service, is attending the '3rd Real Estate Market Inspection Meeting of Related Ministers' held at the Government Seoul Office in Jongno-gu, Seoul on the 19th. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Jo Gang-wook] The Financial Supervisory Service (FSS) is launching a thematic inspection targeting banks to check compliance with housing mortgage loan regulations.

According to financial authorities on the 5th, the FSS recently requested written materials from financial companies, including commercial banks and savings banks, regarding compliance with housing mortgage loan regulations.

This is to focus on whether the recently surged unsecured loans have flowed into the real estate market and whether unsecured loans are properly reflected in the calculation of the Debt Service Ratio (DSR).

Currently, the government applies a DSR of 40% or less to those attempting to purchase homes priced over 900 million won in speculative areas and speculative overheating districts, and the FSS intends to verify if there have been any violations of this rule.

It will also focus on whether there have been any cases of circumventing loan regulations through the use of personal business or corporate loans.

In response to concerns that funds borrowed for purposes such as facility capital are being used for real estate investment, the FSS will check whether loan funds were used appropriately according to their intended purposes.

Based on the written materials submitted by banks, the FSS plans to conduct on-site inspections if any regulatory violations or suspicious cases are found, taking into account the COVID-19 situation.

If specific violations are confirmed during the on-site inspections, the FSS will order immediate loan recovery and proceed with disciplinary actions against the financial institutions.

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