Expansion of Credit Union Business Scope... Loan Limit per Individual Increased from 5 Billion to 10 Billion Won

Deletion of 'Asset Size Over 100 Billion KRW' Requirement for Full Expansion
Non-Agriculture, Fishery, and Forestry Associate Members Also Eligible for Loans up to 10 Billion KRW
Strengthened Risk Management for Credit Operations and Financial Incidents

[Asia Economy Reporter Kangwook Cho] The business scope of regional credit cooperatives (Shinhyup) will be expanded, and the loan limit for the same borrower at agricultural, fishery, and forestry cooperatives will also be increased. A basis for work processing standards has been established to prevent financial accidents.

The Financial Services Commission announced on the 13th that it has approved a partial amendment to the Mutual Finance Business Supervision Regulations containing these details.

First, the requirements for expanding the joint bond (business area) of Shinhyup have been relaxed.

Even if the main office location of a regional cooperative is not adjacent to the eup, myeon, or dong of another city, county, or district, it can partially expand its business area if it meets other requirements such as a net capital ratio of 2% or more.

Also, the requirement of "asset size of 100 billion KRW or more" for full expansion to adjacent cities, counties, or districts has been removed.

The loan limit for the same borrower at agricultural, fishery, and forestry cooperatives has also been raised. Previously, loans were limited to 5 billion KRW for corporations (quasi-members) not engaged in agriculture, fishery, or forestry, but this has now been doubled to 10 billion KRW. However, construction and real estate businesses are excluded.

Credit operations and risk management related to financial accidents will be strengthened. The Financial Services Commission has established an institutional basis for work processing standards to strengthen accountability for credit operations in the mutual finance sector and to induce improvements in internal control systems.

Additionally, when approving the establishment of Shinhyup, the Financial Services Commission will include relevant work experience in the requirements for professional personnel, and when calculating the loan limit for the same borrower, loans under the "Haetsal Loan" handled by the Regional Credit Guarantee Foundation as well as those handled by the Korea Inclusive Finance Agency will be excluded from the loan amount.

Furthermore, not only existing household loans but also loans to individual business owners can have their asset soundness classification upgraded if repayments are made faithfully, and the National Credit Union Federation of Korea will be allowed to issue overseas debit cards by establishing foreign exchange business registration requirements.

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