[Q&A] "12.5 Trillion Won Allocated to SMEs During Lunar New Year Holiday"... 15 Useful Financial Tips for Seollal

If Loan Maturity Falls During Lunar New Year Holiday, Repayment Within 15 Days Allowed Without Late Interest
For Retirement Pension Payments During Holiday, Inquire with Financial Institution by 11th in Advance

Mangwon Market, Mapo-gu, Seoul. Photo by Honam Moon munonam@

[Asia Economy Reporter Kwangho Lee] Financial authorities are releasing special funds amounting to 12.8 trillion KRW for small and medium-sized enterprises (SMEs) and small business owners facing management difficulties during the Lunar New Year holiday.

According to the Financial Services Commission on the 1st, KDB Industrial Bank and IBK Industrial Bank will provide a total of 9.3 trillion KRW, including 3.85 trillion KRW in special Lunar New Year loans and 5.45 trillion KRW in maturity extensions for SMEs in urgent need of funds.

The Korea Credit Guarantee Fund will support guarantees worth 3.5 trillion KRW to respond to increased fund needs of SMEs due to expected long holidays, payment settlements, and bonus payments. This includes 700 billion KRW in new guarantees and 2.8 trillion KRW in maturity extensions.

The Korea Inclusive Finance Agency will support 10 billion KRW in payments for purchasing seasonal goods to traditional market merchants through microfinance, doubling the amount from last year.

Below are useful financial tips for the Lunar New Year holiday.

- How to use the special Lunar New Year funds from policy banks.

▲ From the 12th, consultations on special funds will be available at IBK and KDB branches. IBK plans to support up to 300 million KRW per company for working capital purposes such as raw material payments, employee salaries, and bonuses. For new payment-related loans rather than maturity extensions, a 0.3 percentage point interest rate reduction benefit will be provided.

- What should companies needing new guarantees or with maturing guarantees between the 11th and 14th do regarding Korea Credit Guarantee Fund (KCGF) guarantees?

▲ KCGF plans to notify customers with scheduled guarantee transactions between the 11th and 14th in advance through branches to prevent inconvenience to corporate clients.

- Are there any reductions in guarantee fees due to guarantee support?

▲ KCGF plans to offer preferential treatment on guarantee fees, guarantee ratios, and guarantee limits by utilizing currently operated COVID-19 special guarantee and preferential guarantee systems.

- When should loans maturing during the Lunar New Year holiday be repaid?

▲ Loans from financial institutions (banks, insurance, savings banks, credit cards, etc.) and stock margin trading amounts maturing between the 11th and 14th will be automatically extended to the 15th. Repayment on the 15th will be processed as normal without overdue interest.

- Will interest payments due between the 11th and 14th be considered overdue if not paid during the holiday?

▲ Interest payment dates falling between the 11th and 14th will be automatically extended to the 15th, so paying interest on the 15th will be treated as normal payment.

- When can deposits maturing between the 11th and 14th be withdrawn?

▲ Deposits maturing between the 11th and 14th at financial institutions can be withdrawn on the 15th, including interest accrued during the holiday. Depending on the product, depositors may also withdraw on the last business day before the holiday upon request.

- When should credit card payments due between the 11th and 14th be made?

▲ If the credit card payment due date falls on a holiday, the payment date is postponed to the next business day. Therefore, payments due between the 11th and 14th will be automatically withdrawn from customers’ accounts on the 15th or can be paid directly without incurring late fees.

- Is a separate application required for early payment of credit card settlement amounts during the Lunar New Year holiday?

▲ No separate application is required for early payment of credit card settlement amounts, and merchants do not bear any additional costs.

- When will automatic payments scheduled between the 11th and 14th be withdrawn?

▲ Automatic payments scheduled between the 11th and 14th will be processed on the next business day, the 15th. However, if there is a separate agreement between the billing agency and the payer, withdrawal may occur on a different business day.

- When can promissory notes, checks, and electronic payment instruments maturing between the 11th and 14th be cashed? Are transactions such as issuance possible?

▲ Cashing promissory notes, checks, and inter-company electronic payment instruments usually takes one business day. Therefore, cashing those maturing between the 11th and 14th will be possible after the next business day, the 15th.

- What should customers do if large-scale real estate transactions, corporate fund settlements, or foreign currency remittances are needed between the 11th and 14th?

▲ Customers requiring large-scale fund transactions such as real estate deals or corporate fund settlements should change the transaction date through prior consultation with the counterparty or secure funds in advance through consultation with their financial institution or increase transfer limits on internet banking.

- What should customers expecting retirement pension payments between the 11th and 14th do?

▲ Customers wishing to receive retirement pensions before the 11th should check the payment schedule in advance by contacting their financial institution or reviewing the retirement pension terms, as payment schedules vary by product type.

- Can monthly payments from the housing pension be received?

▲ For customers whose housing pension payment date falls during the Lunar New Year holiday, monthly payments will be made on the 10th. Customers needing lump-sum withdrawals during the holiday can visit the Korea Housing Finance Corporation by the 9th to apply for individual withdrawals and receive funds on the 10th.

- When will settlement payments for stocks or bonds sold before the 11th be received?

▲ If the settlement payment date falls between the 11th and 14th, payment will be postponed to the 15th.

- How can new bills be exchanged while visiting hometowns?

▲ During the Lunar New Year holiday, two banks, NongHyup and Gwangju Bank, will operate mobile branches at highway rest areas to provide new bill exchange services.

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