Expansion of Repayment Deferral to All Delinquents Before Debt Restructuring Initiation

Expansion of Pre-Debt-Adjustment Repayment Deferral System Previously Limited to Debtors Overdue Less Than 30 Days and COVID-19 Victims
Son Byung-du: "We Will Also Inspect Bundled Sales by Banks"

Son Byung-du, Vice Chairman of the Financial Services Commission

[Asia Economy Reporter Kim Hyo-jin] Financial authorities are pushing to expand the pre-debt adjustment repayment deferral system, which supports vulnerable debtors, to all delinquent borrowers.

On the 14th, Sohn Byung-doo, Vice Chairman of the Financial Services Commission, announced this policy during a video-hosted Financial Risk Response Team meeting.

Vice Chairman Sohn stated, "We are promoting improvements to the credit recovery system to support the rehabilitation of vulnerable debtors, such as expanding the pre-debt adjustment repayment deferral system, which was previously applied only to borrowers delinquent for 30 days or less and those affected by COVID-19, to all delinquent borrowers." Specific measures will be separately announced next week.

In addition, the financial authorities requested the financial sector to carefully inspect whether there are any issues related to the sale of binding financial products, known as 'kkyeokgi' and 'kkiwo-palgi' (tying sales), concerning loans for small business owners struggling due to COVID-19, and to ensure that consumer damages do not occur.

Regarding the 'Korean New Deal' project, Vice Chairman Sohn said, "It is most important to raise awareness among market participants and investors and to encourage their participation," adding, "We plan to hold investment briefings sequentially from the end of this month in collaboration with related ministries and agencies for New Deal sectors such as eco-friendly energy, future autonomous vehicles, artificial intelligence (AI), and 5G."

Concerning the 'Digital Finance Council,' which aims to establish a fair competition foundation between the financial sector and big tech companies, Vice Chairman Sohn explained, "We plan to hold several meetings by the end of the year," and based on these, they will finalize and announce plans to expand digital finance infrastructure, including the advancement of open banking and the scope of MyData information provision.

Meanwhile, the financial authorities have tallied that as of the 8th of this month, a total of 2,144,000 loan and guarantee supports amounting to 218.6 trillion won have been provided by the financial sector to small business owners affected by COVID-19.

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