Saemaeul Geumgo Joint Audits to be Strengthened... Targeted Geumgo Doubled

The government will significantly strengthen the regular joint government audits of Saemaeul Geumgo by increasing the audit period, targets, and personnel.

The Ministry of the Interior and Safety announced that it has finalized the basic direction for the 2024 Saemaeul Geumgo joint government audit and will conduct the joint audit with the Financial Supervisory Service and the Korea Deposit Insurance Corporation starting from the 8th. This joint audit is a follow-up measure to the "Business Agreement to Strengthen the Cooperation System for Enhancing the Soundness of Saemaeul Geumgo" signed by the Ministry of the Interior and Safety and the Financial Services Commission in February, and will be carried out through collaboration among the Ministry of the Interior and Safety, the Financial Supervisory Service, the Korea Deposit Insurance Corporation, and the National Federation of Saemaeul Geumgo.

Minister of the Interior and Safety Sang-min Lee (left) and Chairman of the Financial Services Commission Joo-hyun Kim are posing for a commemorative photo at the signing ceremony for strengthening the supervisory cooperation system of Saemaeul Geumgo held on the 5th at the Government Seoul Office in Jongno-gu, Seoul. From the left, Tae-ju Kim, Chairman of the Saemaeul Geumgo Central Association Supervisory Committee, Minister Lee, Chairman Kim, Se-hoon Lee, Senior Deputy Governor of the Financial Supervisory Service, and Dae-il Yoo, Vice President of the Korea Deposit Insurance Corporation. Photo by Yongjun Cho jun21@

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The number of targeted Geumgo nearly doubles from before, auditing 40 locations, and the number of auditors expands from the previous 8-9 to 20. The audit period has also increased from one week (5 business days) to two weeks (10 business days). The audit period can be extended if necessary. Until now, the Ministry of the Interior and Safety has selected about 20 Geumgo annually for audits in cooperation with the Financial Supervisory Service and the National Federation of Saemaeul Geumgo under Article 74 of the Saemaeul Geumgo Act. However, as there have been continuous calls for more professional audits commensurate with Saemaeul Geumgo’s assets of 296 trillion won, the government decided to strengthen the audit accordingly.

This joint audit will focus on the management status of real estate-related loans, which are a major cause of deteriorating soundness, internal control systems, and misuse of loans for purposes other than intended. In addition to soundness, audits will be conducted on selected Geumgo that require organizational culture improvements, which have been identified as major issues for Saemaeul Geumgo.

The audit targets will be selected comprehensively considering asset size, audit cycle, and incidents (reports) among the 1,284 Geumgo. The soundness and risk areas of Geumgo will be audited according to a pre-selected plan, and for some Geumgo with reports or incidents occurring throughout the year, a rapid response audit team will be formed to respond promptly. Especially from this year, with the Korea Deposit Insurance Corporation added as a supervisory agency, audit teams (4 teams, 20 people) will be directly formed together with the Financial Supervisory Service to audit 32 regional Geumgo, and strict sanctions will be imposed in cases of regulatory violations to enhance the effectiveness of the audits.

Accordingly, the Financial Services Commission, the Financial Supervisory Service, and the Korea Deposit Insurance Corporation recently established dedicated organizations for supervision and signed an agreement with the National Federation of Saemaeul Geumgo last month for information sharing and audit execution.

Ko Gi-dong, Vice Minister of the Ministry of the Interior and Safety, stated, "Through close cooperation with financial authorities such as the Financial Supervisory Service and the Korea Deposit Insurance Corporation, we will carefully examine the soundness of Saemaeul Geumgo and strive to help it grow into a Saemaeul Geumgo trusted by the public."

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