FSS Issues Management Warning to Lotte Card for Inadequate Prevention of Interest Rate Inversion
[Asia Economy Reporter Moon Hyewon] Lotte Card has been issued a management caution for insufficient measures to prevent interest rate inversion between credit ratings.
According to the financial sector on the 29th, the Financial Supervisory Service recently conducted an inspection of Lotte Card and imposed one management caution, citing inadequate operation of standards to prevent interest rate inversion.
Lotte Card had established operational standards to prevent interest rate inversion between credit ratings and had a system in place to monitor monthly occurrences of interest rate inversion and report them to the Pricing Committee.
However, from January to September last year, despite the continued occurrence of interest rate inversion due to interest rate discount marketing aimed at achieving short-term card loan targets, effective responses were found to be insufficient.
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The Financial Supervisory Service recommended that Lotte Card properly manage to prevent future occurrences of interest rate inversion and prepare measures to strengthen internal controls to promptly resolve any such occurrences.
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