'Deposit Protection Limit Raised to 100 Million Won' Deposit Insurance Act Amendment Passed by National Assembly

Strengthening Depositor Protection and Enhancing Financial Market Stability
New 'Deposit Insurance Premium Rate' to be Applied from 2028 to Minimize Financial Sector Burden

The amendment to the 'Depositor Protection Act,' which raises the deposit protection limit from the current 50 million KRW to 100 million KRW, passed the National Assembly plenary session on the 27th. Considering the financial market conditions such as real estate project financing (PF) and the environment of the secondary financial sector, the amendment is scheduled to be implemented from the date specified in the enforcement decree within one year after its promulgation.

Endless political battles such as impeachment, special investigations, and partisan conflicts are causing the economy to collapse and making the lives of ordinary people painful. The tumultuous year of 2024, the Gapjin Year, is coming to an end. Behind the National Assembly building in Yeouido, Seoul, the buildings of the securities and financial districts are brightly lit. In the upcoming 2025, the Eulsa Year, we hope that politics, the economy, and the lives of the people will improve to the next level. Photo by Jo Yongjun

The current deposit protection limit has been maintained at 50 million KRW for 24 years since 2001. Reflecting the growth in economic scale and the increase in deposit assets over that period, and considering that the protection level is relatively low compared to major foreign countries, there have been calls to raise the deposit protection limit. Accordingly, the Financial Services Commission and the Korea Deposit Insurance Corporation reported the 'Review Plan for Improving the Deposit Protection System,' which includes the plan to raise the deposit protection limit, to the National Assembly in October last year and actively supported discussions on the amendment to the Depositor Protection Act centered on the National Assembly.

With this legal amendment, even in the event of an insurance accident where a financial company goes bankrupt and cannot pay deposits, depositors will be able to protect their assets more robustly. It is also expected to resolve the inconvenience of depositors who have dispersed deposits across multiple financial companies within the current deposit protection limit. Furthermore, by raising the deposit protection limit to the level of major foreign countries, depositors will be better protected, and the increase in deposits within the protection scope is expected to further enhance trust in the stability of the financial market.

Going forward, the Financial Services Commission and the Korea Deposit Insurance Corporation will strengthen monitoring of fund movements that may occur due to the increase in the deposit protection limit and will also promote measures to minimize the impact on the financial market, such as the introduction of a financial stability account. They plan to review the appropriate deposit insurance premium rate following the increase in the deposit protection limit and, considering that the current financial sectors are bearing the costs incurred to resolve past financial insolvencies, will apply a new deposit insurance premium rate starting in 2028.

This amendment to the Depositor Protection Act will undergo government transmission and promulgation procedures, and the specific implementation date will be determined by the enforcement decree, taking into account the financial market situation within a period not exceeding one year after promulgation.

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