Financial Supervisory Service: "Banks Should Supply Appropriate Level of Loans Focused on Genuine Borrowers"

Meeting with 10 Bank Deputy General Managers

As household loan growth continues, financial authorities have urged banks to prioritize lending to genuine borrowers. On the 25th, the Financial Supervisory Service held a 'Banking Sector Fundraising and Management Meeting' chaired by Deputy Director Park Chung-hyun, responsible for banks, along with vice presidents from the top 10 major banks.

Deputy Director Park stated, "Currently, the banking sector's fundraising, management, and foreign currency liquidity are being managed stably, but considering domestic and international uncertainties, please focus on stable liquidity management rather than competition for external growth."

He added, "We will swiftly implement follow-up measures after introducing the stress Debt Service Ratio (DSR) to ensure household loans are supplied at appropriate levels primarily to genuine borrowers, and after on-site inspections of household loans in the banking sector."

He also emphasized, "Please carefully manage the issuance scale and timing as much as possible to ensure that the easing of restrictions on bank bond issuance does not become a burden on the bond market, and make every effort to manage foreign currency liquidity."

Bank representatives attending the meeting stated, "Since the household loan management measures announced by the authorities last month, the growth rate has slowed, and we plan to reduce the increase in the fourth quarter compared to July and August." They explained that rather than prioritizing sales strategies such as interest rate discounts and maturity extensions, they will manage household loans stably through strengthening borrower loan screening.

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