Comprehensive Expansion of Credit Loan Restrictions... Savings Banks Also Request Salary-Level Reductions

[Asia Economy Reporter Kwangho Lee] Financial authorities have requested savings banks, following the banking sector, to operate credit loan limits within the borrower's annual income.

According to the financial sector on the 22nd, the Financial Supervisory Service made this request to the Korea Federation of Savings Banks on the 20th.

Although the credit loan limits of savings banks are lower than those of banks, some offer fixed limits ranging from 100 million to 150 million KRW.

The financial authorities have set the total household loan growth rate targets for this year at 5-7% for banks and 21% for savings banks, and are monitoring on a weekly basis.

Additionally, considering the high default rate of multiple debtors borrowing from three or more institutions, measures to require savings banks to accumulate more reserves are also being reviewed.

Meanwhile, financial authorities are providing special management for mutual finance institutions, especially Nonghyup.

Last week, the Nonghyup Central Association reported to the Financial Services Commission that it would temporarily suspend collective loans of agricultural and livestock cooperatives nationwide, then set targets for each cooperative and operate accordingly, and independently lower the borrower's total debt service ratio (DSR), currently at 60%, as part of its management plan.

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