Financial Authorities Form Consultative Body with Banks for Smooth Extension and Repayment Deferral of Small Business Loans

First Meeting Held on the 22nd
Encouraging Financial Sector to Independently Develop Support Measures

[Asia Economy Reporter Sim Nayoung] Financial authorities and banks announced that, with the expiration date for maturity extension and repayment deferral measures approaching at the end of September, they have formed a consultative body to ensure a smooth transition for these measures and held the first meeting on the 22nd.

At the 'Financial Services Commission Chairman - Financial Holding Companies Chairpersons Meeting' held on the 21st, the financial holding company chairpersons stated, "The financial sector is preparing on its own for the end of the maturity extension and repayment deferral measures." Currently, borrowers receiving maturity extension and repayment deferral measures are being provided with one-on-one consulting and repayment schedule adjustments so that they can repay the deferred principal and interest in installments according to their repayment capacity.

However, the financial holding company chairpersons expressed the opinion that "Since the situations of borrowers, such as multiple debtors, vary, it is difficult to respond adequately through the efforts of individual financial companies alone to prevent confusion among financial companies. Therefore, it is necessary to establish common guidelines agreed upon by banks and non-bank sectors to respond effectively."

The Financial Services Commission announced plans that for borrowers who can continue to receive voluntary maturity extension and repayment deferral measures in the market, the financial sector will independently implement maturity extensions, and the government will support policy financial institution funds (41 trillion KRW), while providing low-interest refinancing support (8.5 trillion KRW) for borrowers struggling with high-interest debt, and linking borrowers having difficulty repaying loans to the New Start Fund (30 trillion KRW) to support debt restructuring.

The meeting was attended by representatives from the Financial Services Commission (led by Kwon Daeyoung, Director of Financial Policy Bureau), the Financial Supervisory Service’s General Supervision Bureau and Bank Supervision Bureau, deputy heads of the five major commercial banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup), the Korea Federation of Banks, the Life and Non-life Insurance Associations, the Korea Federation of Savings Banks, the Credit Finance Association, the Korea Credit Guarantee Fund, Industrial Bank of Korea, and NICE Credit Information Research Center.

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