Stricter Financial Authorities... 6 Financial Companies Sanctioned for Household Loan Violations

[Asia Economy Reporter Kiho Sung] Financial authorities recently sanctioned six financial companies that violated loan regulations. The financial authorities plan to strengthen household debt management next year as well, and sanctions against financial companies that violate these rules are expected to become stricter.

According to the financial sector on the 26th, the Financial Services Commission and the Financial Supervisory Service recently sanctioned DB Insurance, Fubon Hyundai Life Insurance, Hyundai Card, Korea Capital, Welcome Savings Bank, and JT Chin-Ae Savings Bank for violations related to loan regulations.

DB Insurance was notified of a management warning sanction after increasing household loans despite exceeding the total volume management target agreed upon with the financial authorities. Fubon Hyundai Life Insurance was given a management warning due to deficiencies found in setting and managing new household loan limits. Hyundai Card was ordered to strengthen its household loan management system and received management warnings and improvement measures.

Korea Capital was ordered to improve and received management warnings due to inadequate credit loan risk management and loan loss provision calculation. Welcome Savings Bank was pointed out for insufficient risk management systems in response to the increase in household loans and was required to improve and received management warnings. JT Chin-Ae Savings Bank was criticized for inadequately assessing credit risks such as the credit risk and repayment ability of loan customers, as household credit loans accounted for a high proportion of total loans.

These strong sanctions by financial authorities against violations of household loan regulations are expected to continue next year.

On the 21st, at a year-end press conference, Jung Eun-bo, Governor of the Financial Supervisory Service, stated that total household loan management is inevitable next year and that corporate loans attempting to evade household loan regulations will be inspected. If cases of use for real estate investment are discovered, they will be dealt with according to principles.

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