[1mm Financial Talk] Endless 'Taeyang-gwang' Data Requests Stir Up Banks

[Asia Economy Reporter Eunju Lee] A strong government-level investigation is underway regarding renewable energy loans, such as solar power, made by banks under the Moon Jae-in administration. The core of the investigation is to verify whether financial institutions during the previous administration granted loans without proper credit evaluations and procedures. The government has formed a 'Government Joint Inspection Task Force (TF),' which includes the Anti-Corruption Promotion Team of the Office for Government Policy Coordination, the National Tax Service, the Financial Supervisory Service, and the Financial Services Commission. While it has been identified that some loans could be processed solely by branch managers' approval, the investigation is focusing on whether banks conducted lax assessments of corporate financial structures or business feasibility.

According to the TF, through role division, the Financial Supervisory Service is currently collecting documents submitted by commercial banks at the time of loan issuance. The National Tax Service is reviewing the collected documents to verify whether the tax invoices were issued legally. However, the investigation is proceeding so thoroughly that bank staff on the ground have expressed complaints. They are burdened by extensive demands for document submission, which has significantly increased administrative work. Recently, there have been reports that the investigation required direct verification of the authenticity of tax invoices, including capturing screenshots and submitting them, leading to feelings among bank employees that "we are being treated like criminals."

To make matters worse, market conditions have exacerbated the workload. As interest rates continue to rise, banks face higher funding costs, prompting commercial banks to compete in raising deposit interest rates. Consequently, at bank counters, the number of customers repeatedly terminating deposits early whenever interest rates increase is growing. When new deposit products with higher rates are launched, many customers immediately cancel previous products and switch to the new ones, crowding the counters. The fatigue caused by structural environmental changes, combined with a sense that politics is interfering, has led to these grievances.

A TF official explained, "We understand the difficulties faced by bank employees, but this is an unavoidable process." The ongoing investigation was expanded nationwide after a 'sample inspection' of the operation status of the 'Electric Power Industry Infrastructure Fund Project' was conducted in 12 out of 226 local governments nationwide last September, revealing improper loan fund executions amounting to 261.6 billion KRW. Even though only a portion was investigated, numerous cases were found where loans were granted based on false tax invoices without actual solar power construction, making a thorough investigation unavoidable.

He added, "According to the September investigation results, many loans were made using inappropriate paper tax invoices rather than the proper electronic tax invoice format. Bank employees themselves may have procedural issues." The September investigation also confirmed cases where construction costs were inflated to obtain excessive loans and cases where solar power facilities were illegally installed on farmland and loans were obtained. A representative case involved building a fake mushroom cultivation facility on farmland, then installing solar power facilities on top and securing loans based on that.

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