Chairman Kim Kwang-soo Visits Bank: "Please Ensure Smooth Transition for COVID Loans"

Encouraging Smooth Implementation of Maturity Extension, Repayment Deferral, and Soft Landing Measures

Kim Kwang-soo, Chairman of the Korea Federation of Banks, listening to the voices from the field of employees at Shinhan Bank Seongsu-dong Corporate Finance Center branch.

[Asia Economy Reporter Park Sun-mi] Kim Kwang-soo, Chairman of the Korea Federation of Banks, visited bank branches to encourage the smooth implementation of the soft landing plan for repayment deferral loans for small and medium-sized enterprises (SMEs) and small business owners, which has been in effect since the 1st of this month.

According to the Korea Federation of Banks on the 5th, Chairman Kim visited Shinhan Bank’s Seongsu-dong Corporate Finance Center in the morning to encourage the smooth implementation of maturity extension, repayment deferral, and the soft landing plan. Chairman Kim first expressed his gratitude, saying, "I appreciate the hard work of frontline staff who are actively participating in financial support to overcome the COVID-19 crisis," and urged, "Please thoroughly guide borrowers so that both banks and borrowers can win-win by allowing borrowers to choose the optimal repayment method they can afford under the soft landing plan."

Additionally, after the implementation of the soft landing plan, he reviewed the atmosphere and operational status at the site and took time to listen to the difficulties faced by frontline staff. After hearing the field’s challenges, Chairman Kim promised, "We will make every effort to promptly identify and resolve any difficulties arising during the support process."

Chairman Kim’s visit to bank branches took place amid the entire financial sector, including banks, implementing loan principal repayment maturity extensions and interest repayment deferrals for SMEs and small business owners experiencing temporary liquidity difficulties due to COVID-19 since the 1st of this month.

By the end of last month, the banking sector had supported a total of KRW 152.1 trillion (483,000 cases), including KRW 143 trillion (449,000 cases) in maturity extensions, KRW 9 trillion (24,000 cases) in principal repayment deferrals, and KRW 111.9 billion (10,000 cases) in interest repayment deferrals. As difficulties for SMEs and small business owners continue due to the prolonged COVID-19 situation, the implementation period has been extended until the end of September this year. Furthermore, to prevent borrowers from facing a sudden repayment burden after the deferral period ends, a 'soft landing plan for repayment deferral loans' has been established and implemented since the 1st of this month.

The soft landing plan for repayment deferral loans includes five key principles: ▲providing optimal repayment consulting, ▲granting a repayment period longer than the deferral period when repaying deferred principal and interest in installments, ▲not charging interest on deferred interest, ▲waiving prepayment penalties, and ▲allowing borrowers to choose the final repayment method. Under this plan, if a borrower who applied for repayment deferral wishes, financial institutions provide consulting to enable long-term installment repayment of deferred interest or deferred principal and interest after the deferral period ends.

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