"Did Everyone Who Was Going to Receive It Get It?"... Bank Credit Loans Drop 240 Billion Won in One Day

Financial Authorities Warn to Tighten Credit Loans, Banks Adjust Total Loan Volume
Credit Loan Balance Drops by 240 Billion Won in One Day Amid Daily Surge

[Image source=Yonhap News]

[Asia Economy Reporter Kim Min-young] Bank credit loans, which had rapidly increased to record highs, have recently decreased by more than 240 billion KRW per day. This is interpreted as the result of commercial banks, warned by financial authorities, beginning to manage total loan volumes amid the ongoing craze of 'Yeongkkeul (borrowing to the limit)' and 'Debt Investment (borrowing to invest)'. Another interpretation is that, with credit loan interest rates at an all-time low in the 1% range, the perception of "losing out if not borrowing" has spread, leading almost all qualified individuals to take out loans.

According to the banking sector on the 20th, the outstanding balance of credit loans at the five major banks?KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup?stood at 126.0899 trillion KRW as of the 17th, down 243.6 billion KRW from 126.3335 trillion KRW the previous day. This marks a halt to the recent continuous surge.

In fact, after the financial authorities recently intervened verbally to manage credit loans, last-minute demand to secure loans in advance surged, continuing the rapid increase in credit loan balances. From 125.1973 trillion KRW on the 11th to 126.3035 trillion KRW on the 16th, the balance surged by 1.1362 trillion KRW in just three business days. Daily increases reached 517.9 billion KRW on the 14th, 344.8 billion KRW on the 15th, and 273.5 billion KRW on the 16th.

Financial Authorities Announce Credit Loan Regulations... Targeted Regulations Expected This Week

Earlier, the Financial Supervisory Service, bank loan officers, and executives held consecutive meetings on the 10th and 14th, announcing upcoming 'credit loan regulations.' Commercial banks and internet-only banks must submit credit loan management plans to the Financial Supervisory Service by the 25th. Targeted regulations focusing on high-income and high-credit borrowers are expected as early as this week. Likely measures include raising credit loan interest rates through reduced preferential rates and lowering credit loan limits for special professions (including doctors, lawyers, and other professionals).

A representative from a commercial bank explained, "After the debt investment craze, credit loans had been rapidly increasing, and it is unusual for credit loans to turn to a decreasing trend, especially ahead of Chuseok when demand for funds is high. Because of the verbal warnings from financial authorities, banks have no choice but to be cautious with large credit loans as part of managing total loan amounts."

Another commercial bank official said, "Almost everyone who wanted to borrow has already done so," adding, "There is also an effect of credit loans, such as overdraft accounts related to public offering subscriptions, being repaid."

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