Banks to Raise Limits on Overdraft and Credit Loans

Woori Bank to Increase Credit Line from Next Month 4th
KB Kookmin and Hana Already Implemented
Household Loan Decline Continues, Banks Feel Crisis

[Asia Economy Reporter Sim Nayoung] The overdraft limits and credit loan limits for salaried workers at the four major banks are set to increase. According to the financial sector on the 27th, Woori Bank will raise the overdraft (minus account) limit for its credit loan products from 50 million KRW to between 80 million KRW and 300 million KRW depending on the product type, starting from the 4th of next month. From the same day, the limit for the credit loan product 'Woori WON (WONhaneun Jikjangin Daechul)' will also be increased from a maximum of 100 million KRW to 200 million KRW.

KB Kookmin Bank and Hana Bank have already eased their loan conditions. KB Kookmin Bank raised the overdraft limit on the 7th of this month to 100 million KRW for general salaried worker products and up to 150 million KRW for professional occupation products. Hana Bank also increased the overdraft loan limit of its 'Hana One Q Credit Loan' from 50 million KRW to a maximum of 150 million KRW at the end of January this year.

Shinhan Bank is also reportedly considering restoring the overdraft and general credit loan limits as early as next week.

The Financial Services Commission requested a reduction in household loans on September 16th last year, leading banks to uniformly reduce overdraft limits to 50 million KRW.

Banks are also gradually removing restrictions on non-face-to-face household loans. The financial authorities had blocked non-face-to-face refinancing loans last September with the intention of focusing loans on the actual funds needed by real demand borrowers, but they have now decided to resume them.

Starting from the 28th, KB Kookmin Bank will allow 'conditional refinancing loan applications,' a non-face-to-face method to switch home mortgage loans from other banks to KB Kookmin Bank's loan products. Woori Bank will lift the combined credit loan limit of 100 million KRW for same-bank and other-bank loans applied to new credit loans through non-face-to-face channels such as apps from the 4th of next month.

The reason banks are expanding loans is that the decline in household loans, the most important foundation for their performance, continues. Due to rising loan interest rates and last year's regulatory measures, household loans at banks have decreased for three consecutive months (based on KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup). If this trend continues, a deterioration in performance is inevitable, prompting departments managing recent business results and credit departments to communicate closely and discuss ways to ease household loan regulations.

This content was produced with the assistance of AI translation services.