47 Public Institutions' Low-Interest and Excessive Loans... Violation of In-House Loan Regulations

It has been revealed that 47 public institutions have either provided loans to employees at interest rates lower than market rates or failed to amend incorrect regulations.

On the 2nd, the Ministry of Economy and Finance announced the results of the "Inspection of Welfare System Operation Status in Public Institutions," which included these details. This inspection was conducted in accordance with the "New Government Public Institution Innovation Guidelines" announced in July last year.

Previously, institutions conducted self-inspections, but this year, to enhance the reliability of public institutions, 15 external experts including academics, lawyers, and labor attorneys participated in inspecting 45 items across 14 major areas such as medical and education expenses. The inspection targets included 34 public enterprises, 96 quasi-governmental institutions, and a total of 134 institutions including financial-type other public institutions. A full survey was conducted for public enterprises and quasi-governmental institutions, while four top-tier financial-type other public institutions (Industrial Bank of Korea, Korea Development Bank, Export-Import Bank of Korea, Korea Investment Corporation) were selected.

The inspection found a total of 182 violations related to in-house loans across 47 institutions. Among these, violations related to housing fund loans were found in 45 institutions with 125 cases, and violations related to living stabilization fund loans were found in 34 institutions with 57 cases. Specifically, 21 institutions including Korea Development Bank and Korea Real Estate Board were found to have provided housing fund loans at interest rates lower than market rates. The interest rates for in-house loans at public institutions must not be lower than the household loan rates announced by the Bank of Korea.

Eighteen institutions including Korea Technology Finance Corporation and Korea Credit Guarantee Fund were criticized for exceeding the loan limit of 70 million KRW specified in the guidelines for public institution innovation when providing housing fund loans. Sixteen institutions including Korea Gas Corporation and Korea Expressway Corporation failed to comply with the regulation that housing fund loans should only be supported when a non-homeowner purchases a house of 85㎡ or less. Twenty-seven institutions including Korea Land and Housing Corporation and Korea Power Exchange were found to have either not complied with the loan-to-value ratio (LTV) or failed to establish mortgage rights.

Twenty-four institutions including Korea Housing Finance Corporation and Korea Asset Management Corporation were found to have provided living stabilization funds at interest rates lower than market rates. Seventeen institutions including Korea Rural Community Corporation and Korea Mine Reclamation Corporation exceeded the loan limit of 20 million KRW for living stabilization funds.

Four institutions fully complied with all inspection items: Korea Agency of Education, Promotion and Information Service in Food, Agriculture, Forestry and Fisheries; Livestock Products Quality Evaluation Institute; Korea Southern Power Co., Ltd.; and Korea Consumer Agency.

As of last year, the welfare expenses per person in public institutions were 1.88 million KRW, a decrease of 20,000 KRW compared to 2020. Compared to 2014, when related surveys first began, it decreased by 660,000 KRW. Welfare expenses per person have shown a declining trend every year: 2.54 million KRW in 2014, 2.56 million KRW in 2016, 2.11 million KRW in 2018, and 1.90 million KRW in 2020.

The government plans to disclose the scale of welfare expenses per public institution, payment standards, and inspection results for 45 detailed items on the Public Institution Management Information System (Alio) to establish welfare systems that meet public expectations.

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