Financial Services Commission Angered at Internet-Only Banks: "Submit Mid-Interest Loan Plans"

Authorities Pressure Internet-Only Banks Expanding High-Credit Borrower Loans to Increase Mid-Interest Rate Lending

Kakao Bank

[Asia Economy Reporter Kwangho Lee] The Financial Services Commission (FSC) has demanded that internet-only banks such as KakaoBank and K Bank submit an 'Annual Plan to Expand the Proportion of Mid-Interest Rate Loans.' This move comes as these banks have neglected the original purpose of internet-only banks to expand mid-interest rate lending and have instead focused on loans centered on high-credit borrowers, similar to commercial banks.

According to financial authorities and the financial sector on the 1st, the FSC will receive a mid-interest rate loan plan from KakaoBank and K Bank that includes specific figures on how much they intend to increase the ratio of mid-interest rate loans relative to the total household loans in the future.

Currently, the FSC is exchanging opinions with KakaoBank and K Bank regarding the contents of the plan.

The FSC plans to finalize the process by receiving the final version of the plan after the announcement of the 'Household Debt Management Measures' scheduled for this month, as the mid-interest rate loan plans of internet-only banks are linked to this policy.

The FSC also plans to receive a mid-interest rate loan plan from Toss Bank, which is currently undergoing the approval process, before its official launch around July.

It is known that the FSC intends to regularly monitor the implementation status after receiving the plans to ensure that internet-only banks actively expand mid-interest rate lending.

Previously, Kwon Daeyoung, Director of the Financial Industry Bureau at the FSC, stated when announcing the '2021 Financial Industry Policy Directions,' "We will strengthen supervision to ensure that internet-only banks innovatively expand loans to low- and medium-credit borrowers in accordance with the law and the purpose of their introduction," and added, "We will regularly check and improve plans and statuses of loans to low- and medium-credit borrowers."

Internet-only banks have all set the expansion of mid-interest rate loans as their top priority and are actively preparing to launch related products. This is widely analyzed as a response to criticism from political circles and authorities that they have been focusing solely on competition for loans to high-credit borrowers.

KakaoBank plans to launch a loan product exclusively for medium- and low-credit borrowers soon. Last year, KakaoBank supplied 1.3 trillion KRW in mid-interest rate loans and plans to further expand the supply scale this year.

K Bank also plans to launch a policy mid-interest rate loan product called 'Saitdol Loan' within this year and will consider launching its own mid-interest rate loan products while monitoring market conditions. K Bank has set a goal to increase the cumulative proportion of low- and medium-credit customers with credit ratings of grade 4 or lower to 30% of total loans by 2023.

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