Kim Geun-ik "Please Fully Understand the DSR System in Financial Sector Sales Field"

Geun-ik Kim, Senior Deputy Governor of the Financial Supervisory Service

[Asia Economy Reporter Kwangho Lee] Kim Geun-ik, Senior Deputy Governor of the Financial Supervisory Service (FSS), on the 2nd stated, "The expanded implementation of the Debt Service Ratio (DSR) aims to establish a lending practice based on the borrower's repayment ability. This will help prepare for increased repayment burdens due to future changes in financial conditions. Therefore, we ask branch staff to fully understand the related details so that the DSR system can be implemented smoothly at the operational level." He also requested, "Please ensure the smooth implementation of preferential Loan-to-Value (LTV) ratios for housing mortgage loans for low-income and genuine demand households without homeownership, as well as the recognition of future income for young people without homes when calculating the DSR."

Acting as the FSS Governor, Senior Deputy Governor Kim visited KB Kookmin Bank, Hana Bank, NH Nonghyup Bank, and Samsung Life Insurance consecutively on the same day to check whether household debt management measures, including the expansion of the DSR, are being properly implemented at branches, and made these remarks.

Senior Deputy Governor Kim urged, "Please strictly adhere to the household loan management plans established by financial companies to stabilize the increase in household loans, which expanded last year, to around 5-6% this year and to a 4% range in 2022."

He also said, "Please ensure thorough management so that additional agreements made to restrict speculative loans by multi-homeowners when handling mortgage loans are strictly enforced," and added, "At the time of loan processing, please clearly explain and guide borrowers so that they fully understand the contents of these agreements."

Attending the on-site inspection were Senior Deputy Governor Kim, the Deputy Governors in charge of banks and small-scale low-income finance, the Deputy Governors for banks, the Director of the Bank Supervision Bureau, and the Director of the Insurance Supervision Bureau.

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