Forestry Cooperatives and Regional Banks Also Join in 'Tightening Loan Restrictions'

[Image source=Yonhap News]

[Asia Economy Reporter Kim Jin-ho] Financial authorities, focusing all their efforts on managing the total volume of household loans, have now tightened lending by the Korea Forest Cooperative Federation and regional banks.

According to financial authorities and the Korea Forest Cooperative Federation on the 4th, the financial authorities summoned the credit officer of the Korea Forest Cooperative Federation on the 1st of this month and expressed concern over exceeding this year's household loan total volume growth target.

The household loan growth target given to 130 Korea Forest Cooperatives nationwide this year is an average of around 4%, but due to loan regulations on banks and secondary financial institutions, demand has surged, currently recording a growth rate in the 5% range.

Accordingly, the Korea Forest Cooperative Federation plans to decide this week to suspend new jeonse deposit loans and mortgage loans for non-members and quasi-members, similar to the measures taken by agricultural and livestock cooperatives, in order to comply with the household loan total volume growth target by the end of the year.

Additionally, the financial authorities plan to strictly manage some regional banks with unusually high household loan growth rates. The balance of household loans at regional banks has already increased by 6.5% as of the end of June compared to the end of last year.

In particular, the growth rates of Gyeongnam Bank and Busan Bank, affiliated with BNK Financial Group, reached 11.8% and 9.9% respectively as of the end of June. A Financial Services Commission official stated, "We plan to request BNK-affiliated banks, which have seen a significant increase in household loans, to comply with the total volume target."

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