Press Releases - Financial Services Commission

Press Releases

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Feb 05, 2021

Rules Change Announced for Insurance Businesses Specializing in Small-sum and Short-term Policies

The FSC announced the revisions to the Enforcement Decree of the Insurance Business Act on February 4, setting entry requirements for the establishment of insurance businesses specializing in small-sum, short-term policies and introducing measures to improve the soundness of the insurance industry. The revisions will be put up for public notice for forty days until March 17, 2021. Key Revisions (Small-sum Shor-term Insurance Policies) The minimum capital requirement for setting up an insurance business specializing in small-sum, short-term insurance policies will be set at KRW2 billion. Small-sum, short-term insurance coverages will be allowed in all insurance coverage areas where applicable with a coverage term of one year, premiums of up to KRW50 million and the insurers annual gross premium revenues up to KRW50 billion. (Requirement for External Evaluation on Policy Reserves) Insurance businesses with total assets of KRW1 trillion or more will be required to have external actuaries approve the appropriateness of their policy reserves. This requirement will also be applied to the insurers with less than KRW1 trillion in total assets but whose policy coverage types are considered as essential for them to ensure the payout capabilities. The external actuaries will be entitled to a right to request relevant information from insurance companies. To guarantee impartiality, external evaluations from the same institution will not be allowed for four consecutive years. (Rules on Subsidiaries) The revisions will clearly indicate that insurers will be permitted to own MyData and health care-related businesses as subsidiaries. Expectation The authorities expect that the revisions will help promote the development of diverse types of small-sum, short-term insurance products for consumers according to their individual lifestyle, improve the soundness and competitiveness of insurance businesses and encourage insurers to boost investment and cooperation in new business areas, su
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Feb 04, 2021

New Deal Funds Worth KRW200 Billion Agreed for Future Car and Industrial Digitalization

FSC Chairman Eun Sung-soo visited Hyundai EV Stationin Seoul on February 4 and delivered congratulatory remarks at an MOU signing event for the promotion of investment cooperation in the areas of future car and industrial digitalization. MOU on Investment Cooperation The MOU highlights an agreement toward a mutual cooperation between the relevant industry entities, financial institutions and the New Deal fund operators (KDB and Korea Growth Investment Corp.) in creating KRW200 billion worth of feeder funds to be invested in the areas of future car and industrial digitalization. To this end, Hyundai Motor Group, the Korea Evaluation Institute of Industrial Technology (KEIT) and the Korea Institute for Advancement of Technology (KIAT) will collectively invest a total of KRW90 billion in New Deal funds in 2021. Over the next five years, the financial institutions will also make matching investments worth KRW1.1 trillion in New Deal funds. Summary of Chairmans Remarks Since the government first announced its plans to create the New Deal fund worth KRW20 trillion in September last year, a master fund was created on January 28 with fiscal investment in the amount of KRW510 billion. In January, fund managers submitted their applications with proposals in the amount of KRW9.7 trillion, which is well over three times the initial investment goal of KRW3 trillion for this year. Their proposals showed an appropriate distribution across all New Deal sectors and demonstrate the significance of digital and green industries in a post-pandemic era. The MOU signed today on investment cooperation between the relevant industry and financial officials is thus significant for the following reasons. First, in order to speed up the creation of New Deal funds, matching investments from the private sector are needed. With the MOU in place, we can expect to see a more speedy creation of feeder funds in the areas of future car and industrial digitalization. Second, in order to generate tangibl
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Feb 04, 2021

FSC Holds 1st Taskforce Meeting to Promote Role of Insurers in Health Care-related Services

The FSC held the first taskforce meeting on promoting the role of insurance companies in providing health care-related services with the relevant ministry and industry officials on February 4. At the meeting, officials discussed major health care industry trends in overseas markets and the domestic health care market environment for insurance companies. To boost the effectiveness in operating the taskforce, the FSC will separately operate an advisory group and a working group to draw up and search for policy tasks. While working to accelerate a data convergence between the health care and financial industries, the taskforce will explore diverse areas to make improvements, such as expanding the use of digital health devices for insurance companies. * Please refer to the attached PDF for details.
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Feb 03, 2021

FSC Announces Decision on Short-selling Ban

FSC Chairman Eun Sung-soo held a press briefing on February 3 and announced the decision to extend the short-selling ban until May 2, 2021 and to allow a partial resumption of short-selling from May 3 on KOSPI 200 and KOSDAQ 150 stocks. Summary of Chairmans Remarks (FSCs Decision) The FSC has decided to extend the current short-selling ban until May 2 this year and allow a partial resumption from May 3 on KOSPI 200 and KOSDAQ 150 stocks. The partial resumption is intended to minimize the impact on markets, given these stocks have large market caps and liquidity so that the resumption of short-selling would have limited impact on stock prices. Meanwhile, the short-selling ban will remain on the rest of stocks (2,037 stock items) with further decisions on the resumption of short-selling on these stocks to be made later based on market conditions. The resumption date of May 3 has been decided to give the Korea Exchange (KRX) some time for system development and testing. With the revised Financial Investment Services and Capital Markets Act scheduled to go into effect on April 6 this year, with stronger penalty rules for illegal short-selling activities, there will be no issue of a legislative gap. Today, the FSC commissioners raised the same voice on the need to improve the short-selling system as there are investor demands for more transparency and fairness in the short-selling system. (Improving the Short-selling System) Prior to the May 3 partial resumption, the FSC will work on measures to improve the short-selling rules. First, The FSC will work to ensure the detection of and punishment on illegal short-selling activities. With the revised Financial Investment Services and Capital Markets Act, short-sellers will be required to keep their securities lending data for five years and the securities firms will be required to tighten monitoring of illegal short-selling activities. The securities firms are currently in the process of getting their systems ready according
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Feb 03, 2021

Financial Industry Policy Agenda to Focus on COVID-19 Recovery and Financial Stability

The FSCs Financial Industry Bureau announced its specific policy agenda for this year, which aims to support COVID-19 recovery and ensure financial stability while seeking innovation in the financial industry. The key policy tasks are the following(a) bolstering pandemic response and risk management, (b) improving the role of region-based and microfinance institutions, (c) strengthening the competitiveness of the financial industry and (d) facilitating digital innovation in the financial industry. Policy Tasks A. Pandemic Response and Risk Management (1) Prepare measures for a gradual rollback of the pandemic-related temporary financial support programs - (Maturity extension, etc.) Introduce plans for loan maturity extension and deferment of payments currently in place to cope with COVID-19 (Feb 2021) - (Temporary deregulatory measures) Review whether to extend the period of the temporary deregulatory measures put in place due to the COVID-19 pandemic - (Loss absorbing capacity) Require financial institutions to maintain a sufficient level of loss absorbing capacity through loan loss provisions and dividend limits (2) Strengthen risk management in the non-banking sector - (Credit finance companies) Introduce measures to more effectively manage liquidity risks - (Savings banks) Introduce capital buffers (+2%p) to boost their loss absorbing capacity in a preemptive way - (Mutual finance companies) Strengthen management on large loans (March 2021) (3) Prepare for the implementation of IFRS 17 - (Impact analysis) Conduct an impact analysis on insurance companies regarding the implementation of IFRS 17 and the new accounting standards (K-ICS) from 2023 (within 2021) - (Implementation capabilities) Ensure a seamless implementation of K-ICS through a gradual application and by allowing insurance companies capital expansion - (Law revision) Introduce revisions to the Insurance Business Act to prepare for the implementation of IFRS 17 from 2023 (H2 2021) B. Region-based and
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Feb 02, 2021

Government Approves Stronger Investor Protection on High-risk Investment Products

The government approved the revisions to the Enforcement Decree of the Financial Investment Services and Capital Markets Act at a cabinet meeting on February 2. As a follow-up to the measures to strengthen investor protection with high-risk investment products announced in December 2019, the approved revisions are intended to bolster investor protection by (a) specifying the criteria for determining highly complex investment products, (b) strengthening requirements on the recording and cooling-off period during the sales process of highly complex investment products, (c) newly establishing a legal ground to regulate sellers of OEM funds, (d) tightening regulations to close loopholes of publicly offered funds being sold in the form of a private fund and (e) raising the retail investors minimum investment threshold in hedge funds from KRW100 million to KRW300 million. The new regulations on OEM fund sellers, closing loopholes of publicly offered funds being sold as a private fund and the increased minimum investment threshold for retail investors will go into effect immediately after the promulgation. Meanwhile, the regulatory measures on highly complex investment products will take effect three months after the promulgation. * Please refer to the attached PDF for details.
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Feb 01, 2021

Government Makes Available KRW12.8 Trillion Extra Lending Support for Small Merchants and SMEs

The FSC announced the availability of additional lending assistance for small merchants and SMEs in the amount of KRW12.8 trillion ahead of the Lunar New Year holiday. Loans in the amount of KRW9.3 trillion (KRW3.85 trillion in new loans and KRW5.45 trillion in maturity extensions) will be provided to the small merchants and SMEs experiencing hardships with an additional interest rate reduction of up to 0.9 percentage points. Guarantees in the amount of KRW3.5 trillion (KRW0.7 trillion in new guarantees and KRW2.8 trillion in maturity extensions) will be available with special guarantees of up to KRW300 million each for the pandemic-hit businesses. The lending programs will be available from the Industrial Bank of Korea, Korea Development Bank and Korea Credit Guarantee Fund until February 26, 2021. * Please refer to the attached PDF for details.
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Feb 01, 2021

Securities Firms to Play Bigger Role in Corporate Financing and Venture Capital Market

The FSC decided on the measures to promote the role of securities firms in corporate financing and venture capital market on January 29. Background To help our economy continue to search for sustainable growth areas and create quality jobs, an innovation-based development is necessary. Amid an acceleration of digital transition and the spread of contactless services, promoting new industries based on technology and intangible assets, such as IT and bio health, should take place. The government has worked on regulatory improvements to boost the role of securities firms in corporate financing.As such, the number of securities firms with equity capital of KRW3 trillion or more increased from five in 2013 to eight in 2019, and their high value-added services such as investment banking has expanded. However, the securities firms role in providing venture capital to innovative SMEs has been lagging. Instead, offering investor credit exposure and providing debt guarantee on real estate project financing took up most of their business. As such, the following measures are intended to promote the securities firms role in providing venture capital to innovative SMEs. Key Measures A. Re-establishing the Role of Comprehensive Financial Investment Businesses Under the current system of comprehensive financial investment business entities, the total credit exposure offered to businesses rose from KRW0.4 trillion in 2013 to KRW14.3 trillion at the end of June 2020. Business loans to SMEs has taken up 51.7 percent (or KRW7.4 trillion), which indicates a significant rise. However, out of KRW7.4 trillion, SME loans excluding SPCs and real estate project financing stood at just KRW0.3 trillion, representing only 2.0 percent of the total credit exposure to businesses. As such, adjustments will be made to the rules on comprehensive financial investment business entities capital exposure limits to remove real estate-related credit offering from the currently allowed special capital exposu
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Feb 01, 2021

FSC Announces Plans to Improve Competitiveness of Publicly Traded Funds

The FSC unveiled specific plans to improve the competitiveness of the publicly traded fund market on January 29, with an aim to make the sales and management process more investor-oriented. The plans include (a) increasing the accountability and efficiency of fund management, (b) making the sales process more investor-oriented, (c) encouraging the introduction of diverse types of funds and (d) strengthening support for investors. BACKGROUND Publicly traded funds serve as an importance source of asset management for the general public, allowing small-sum investment and fit for medium risk/medium return appetite. They are also important as they provide capital to productive sectors and help to spread out the real estate-oriented household asset structure. However, the volume of publicly traded funds has stagnated recently as retail investors have become less inclined to invest in publicly traded funds due to the availability of private equity funds, equity-linked securities and other competitive products as well as the relatively low returns, cost burdens related to sellers compensations and fees, inappropriate fund management practices, etc. Meanwhile, amid a low interest rate environment and abundant market liquidity, the general publics interest in financial investment has grown, particularly in direct investing. Over the past 10 years, the volume of private equity funds grew 268.3 percent while that of publicly traded funds rose only 38.3 percent. Stock funds except exchange-traded funds (ETFs) fell 53.2 percent while ETFs and money market funds (MMFs) rose 759.0 percent and 57.3 percent, respectively. The stagnant development of the publicly traded fund market can be attributable to (a) the subpar performance of fund management in generating returns, (b) the declining trust on fund sellers, (c) the lack of diversification in the types of funds and (d) the lack of adequate support for investors. Against this backdrop, the authorities will seek following strategies
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Jan 28, 2021

FSC Announces Specific Plans for Financial Innovation and Digital Finance

The FSC announced a detailed work plan for financial innovation and digital finance on January 28, which aims to spur the growth of fintechs, promote the spread of online-based financial services and build financial infrastructures necessary for digital innovation. Background The government has been working to promote digital finance and innovation in financial services through a variety of policies. The Special Act on Support for Financial Innovation went into effect in April 2019, which introduced a financial regulatory sandbox program. The Fintech Center Korea was established in January 2018 to provide comprehensive support for fintech startups. In an effort to promote a digital transformation in the financial industry, the fintech investment guidelines were introduced in October 2019 and more innovative types of businesses such as MyPayment came into being. In December 2019, open banking service was introduced, and in January 2020, the revisions to the Credit Information Use and Protection Act were finalized which will promote the use of data and the growth of MyData industry. In order to strengthen data security and ensure safety in payment systems, enhanced security measures were introduced in the wake of the COVID-19 pandemic. Against this backdrop, the FSC will work on the following to further promote innovation and digital transformation in the financial industry. Key Policy Tasks A. Advancement of Fintech Industry (1) Introduce a digital sandbox through which fintech startups can have opportunities to virtually test their new business ideas (from Jun-Aug 2021) (2) Establish a comprehensive fintech support system by working on a legislation focused on nurturing fintechs (within 2021), further improving the management of the regulatory sandbox program (Jan 2021) and expanding financial support through state-backed financial institutions and private sector investments (Q1 2021) (3) Work to boost the organizational capabilities of the relevant divisions and ag
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Jan 28, 2021

FSC Recommends Capital Management for Banks

The FSC announced its decision to recommend banks to temporarily limit dividends within twenty percent of their net profits until the end of June this year as it is deemed necessary to maintain banks loss absorbing capacity in response to the COVID-19 pandemic. Domestic banks have maintained strong financial soundness despite the pandemic situation. However, in order to be prepared for economic uncertainties, preemptive efforts are needed to boost the capital adequacy of banks. As such, the authorities decided to recommend banks to temporarily limit dividends within twenty percent of their net profits based on the results of the stress tests carried out on eight bank holding companies and six non-holding banks by the Financial Supervisory Service between October and December 2020. The stress tests were conducted on two distinct scenarios(a) a U-shaped long-term recovery and (b) an L-shaped long-term recession. In both scenarios, the capital ratios of all banks were shown to be above the minimum required level. However, in an L-shaped scenario, the capital buffer and D-SIB ratios of numerous banks felt short of the required levels. * Please refer to the attached PDF for details.
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Jan 27, 2021

FSC Grants MyData Business Licenses to 28 Firms

The FSC granted MyData business licenses to twenty-eight firms on January 27 as the authorities decided that they all satisfy the requirements set forth by the Credit Information Use and Protection Act. The approved entities include five banks, six credit finance businesses, one financial investment firm, one mutual finance business, one savings bank and fourteen fintechs. The approved entities will begin providing MyData services after setting up standard APIs by August 4, 2021, which will allow the provision of safer and more convenient MyData services. In order to ensure a smooth takeoff of the MyData services, the authorities will distribute a guideline in February that specifies details about the scope of data transfer, safe means of data transfer, measures for consumer protection, etc. Beginning in March, the FSC plans to begin another round of preliminary application process for those that wish to enter the MyData industry. * Please refer to the attached PDF for details.
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Jan 27, 2021

FSC Designates Additional 'Innovative Financial Service' for Regulatory Sandbox

The FSC designated two more innovative financial service providers for its regulatory sandbox program on January 27, bringing the total number of such designation to 137 since launching the financial regulatory sandbox program on April 1, 2019. The newly designated service is a credit card service for underaged family members that allows parents to set the maximum usage limit as well as the places where it can be used (Samsung Card Shinhan Card). The service is expected to boost the convenience in small-sum financial transactions and promote responsible consumption habits among high school and middle school aged students. The service is expected to be available in June this year. * Please refer to the attached PDF for details.
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Jan 26, 2021

Financial Authorities to Work on Risk Management and Support Transition to First-mover Economy

Vice Chairman Doh Kyu-sang held the 33rd financial risk assessment meeting via teleconference on January 26 to discuss key risk factors in 2021 and review the implementation of the COVID-19 lending support for SMEs and small merchants. The following is a summary of Vice Chairman Dohs remarks. (Risk Management) With the pandemic response measures put in place, the public and private sector debt increased throughout the world and asset prices have seen a rapid acceleration with abundant market liquidities. The accumulation of excessive debt may pose a risk to the economic recovery, and the financial authorities will continue to work on the management of the household and corporate debt. The FSC plans to introduce measures to more effectively manage household debt in the first quarter, which will focus on the application of DSR rules to individual borrowers. On corporate debt, the authorities will set up a monitoring system to check the status of corporate financing across different industries. Stock prices have gone up due to strong trading activities by retail investors. However, there are possibilities of a rising market volatility and the authorities will closely monitor the conditions in the stock markets. In addition, the authorities will work to strengthen the oversight of illegal and unfair trading activities including illegal short selling, while preparing tax incentives for longer-term stock investment. The FSC will also soon introduce measures to improve the competitiveness of the publicly offered funds to make the process more investor-oriented. (Channeling Funds to Productive Sectors) The authorities will work to ensure that the abundant market liquidities are flowing into productive sectors and toward the vulnerable groups in need. In this regard, the FSC will work on a seamless implementation of its policy on New Deal fund, which will be raised up to KRW4 trillion in 2021 with its first investment project hoped to be announced in March. In April, another
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Jan 25, 2021

Green Finance to Support 2050 Zero Carbon Goals

Vice Chairman Doh Kyu-sang held the 3rd green finance taskforce meeting via teleconference on January 25 and unveiled the governments plans to promote green financing in 2021, which include strengthening the role of the public sector, promoting green financing in the private sector and improving the regulatory framework. At the meeting, Vice Chairman Doh emphasized the importance of the governments 2050 zero carbon initiative and called for close cooperation from all financial sectors. KEY PLANS A. STRENGTHEN THE ROLE OF THE PUBLIC SECTOR 1) Prepare an investment strategy for state-backed financial institutions to double their investment in green sectors from the current 6.5% to about 13% (H1 2021) and consider the launching of a new green finance lending program once the K-taxonomy on green industries becomes available 2) Create green financing teams within the state-backed financial institutions to improve their work consistency and promote cooperation across different institutions 3) Launch a consultative body on green financing between different state-backed financial institutions (H1 2021) to help draw up an integrated strategy on green financing, promote information sharing and boost ties with the international society while preparing for the 2021 P4G Seoul Summit 4) Seek revisions to the guidelines on the management of water resources funds (H2 2021) to ensure that the green and environmental indicators are taken into account when selecting fund managers B. PROMOTE GREEN FINANCING IN THE PRIVATE SECTOR 1) Develop K-taxonomy to clearly distinguish between green and non-green industries and activities (H1 2021) and seek improvements to the system (H2 2021) 2) Introduce best practice guidelines on green financing to be equally applied to all financial sectors (H1 2021) and promote an internalization of the rules after an adjustment period 3) Pilot the issuance of green bonds according to the green bond issuance guidelines announced in December last year 4) Draw
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Jan 19, 2021

Public-private Joint Investment to Create KRW100 Billion Fund for Semiconductor Industry in 2021

FSC Chairman Eun Sung-soo visited SK Hynixs Icheon campus on January 19 and delivered congratulatory remarks at a public-private joint investment agreement ceremony held for the mutual cooperation between SK Hynix, the Korea Development Bank, Export-Import Bank of Korea and NH Nonghyup Bank in raising a total of USD3 billion between 2021 and 2025. To promote a balanced growth of the countrys semiconductor industry and its ecosystem, SK Hynix, the KDB and KEXIM Bank also agreed to make contributions in creating a fund in the amount of KRW100 billion, which will be used for making investments in SMEs and middle market enterprises in the semiconductor industry. CHAIRMANS REMARKS Chairman Eun highlighted the significance of the joint investment agreement and stated that there should be continuous efforts at making investments in future-oriented projects. In this regard, Chairman Eun also touched upon the importance of a balanced growth between large companies and smaller sized firms that collectively make up the industrys ecosystem. To encourage private sector investments, Chairman Eun explained that the government will create New Deal funds in the amount of up to KRW4 trillion and provide New Deal financing support worth about KRW18 trillion through state-backed financial institutions lending support and investment programs. While funneling funds to the new growth sectors, Chairman Eun said that the government aims to select more than 400 innovative firms this year for providing comprehensive support package. * Please refer to the attached PDF for details.
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Jan 19, 2021

FSC Announces 2021 Work Plan

The FSC unveiled its work plan for 2021 on January 18, highlighting the four areas of policy tasks as follows(a) maintaining the COVID-19 financial support and managing potential risks, (b) supporting K-New Deal initiatives for a green and digital economy, (c) promoting financial innovation and digital finance and (d) strengthening financial consumer protection and support for vulnerable groups. KEY ACHIEVEMENTS IN 2017-2020 A. STEADY MAINTENANCE OF FINANCIAL STABILITY AMID COVID-19 PANDEMIC Over the past four years, the FSC has focused on maintaining stability in the financial system as its utmost policy priority. In the wake of the COVID-19 pandemic, the FSC responded by quickly drawing up and providing financial support packages worth KRW175 trillion-plus and worked to prevent the crisis from spreading further into the financial markets. B. SUCCESSFUL CHANNELING OF FUNDS TO PRODUCTIVE SECTORS The FSC has worked to expand the supply of capital into more productive sectors by introducing innovative ways to assess corporate credit and through revisions to the relevant capital markets rules. In addition, the public sector has provided equity-based funding sources via growth ladder fund and other government-backed financing channels. C. ACTIVE PROMOTION OF COMPETITION AND INNOVATION IN FINANCIAL INDUSTRY The FSC has granted new business licenses to internet-only banks, insurance firms and real estate trust companies based on an industry-level competition assessment. In order to promote and expand financial innovation, the FSC has also worked to establish the necessary infrastructures, including the regulatory sandbox, open banking and MyData in financial services. D. ENHANCED INCLUSIVENESS VIA MICROFINANCE SUPPORT AND CONSUMER PROTECTION The FSC has worked to reduce the interest payment burdens of lower income households by lowering the maximum interest rate that can be charged on loans from 24% to 20%. E. IMPROVED FAIRNESS BASED ON RULES AND PRINCIPLES The FSC has al
Jan 14, 2021

FSC Plans to Improve Corporate Disclosure Rules

Vice Chairman Doh Kyu-sang held a meeting with industry officials and experts via teleconference on January 14 and discussed the government’s plans to improve rules on corporate disclosure.The following is a summary of Vice Chairman Doh’s remarks.BACKGROUNDAs the pandemic situation continues, there are growing uncertainties throughout the economy and rapid changes are taking place in the business management environment. As such, the accuracy and promptness in corporate disclosure has become ever more important. Considering a surge in retail investors’ participation in stock markets last year, the disclosure rules need to be improved to allow retail investors to more easily understand disclosure information while reducing filing burdens for companies. In addition, with growing significance of environmental, social and governance (ESG) factors and responsible investing, it is necessary to set up an appropriate regulatory environment.PLANS FOR IMPROVEMENTI. IMPROVE INVESTOR CONVENIENCE IN USING DISCLOSURE INFORMATIONThe required criteria for company disclosure reports and the categorization system will be changed and redundancy will be removed to help improve retail investors’ understanding of disclosure information. An easy-to-understand information booklet will also be published for retail investors. In addition, the Data Analysis, Retrieval and Transfer (DART) System managed by the Financial Supervisory Service will be improved to make it more user-friendly with the introduction of more useful menu categories and enhanced search capabilities.II. REDUCE COMPLIANCE BURDENS FOR BUSINESSESQuarterly reports which have placed relatively heavy burdens on companies will be simplified to contain only key disclosure information, reducing the current requirement items by about forty percent. In addition, corporate filing burdens will be reduced for a greater number of smaller sized companies. III. PROMOTE ESG/RESPONSIBLE INVESTINGThe Korea Exchange will provide a guida
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Jan 14, 2021

Household Loans, December 2020

The outstanding balance of household loans in all financial sectors rose KRW8.5 trillion from the previous month at the end of December 2020 (up 8.0% y-o-y). The household loan balance increased KRW6.7 trillion in the banking sector and KRW1.8 trillion in the non-banking sector.By type, mortgage loans expanded KRW6.7 trillion in December, dropping KRW0.1 trillion from the previous month (up KRW2.1 trillion y-o-y). In the banking sector, mortgage loans grew KRW6.3 trillion while mortgage lending by non-banks increased KRW0.4 trillion from the previous month. Other types of loans rose KRW1.8 trillion, showing a significant decline (down KRW10.1 trillion m-o-m) from the previous month due to strict regulations on credit loans.In 2021, the financial authorities will continue to closely monitor trends in household loans and check the implementation of the household debt management plan. The authorities will draw up a plan in the first quarter that aims to make a gradual transition toward the the application of DSR rules centered on individual borrowers’ debt service capabilities.* Please refer to the attached PDF for details.
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Jan 14, 2021

Additional Lending Support Available for Small Merchants from January 18

The FSC announced the availability of additional lending support for small merchants on January 14, including lower interest rates and guarantee fees for the second phase COVID-19 financial support program and the newly launched lending support of up to KRW10 million for those hit by social gathering restrictions. Beginning on January 18, the second phase COVID-19 lending program for small merchants will be offered at an interest rate of maximum two percentage points lower than the previously offered levels. The banking sector agreed to lower interest rates for small merchant loans by one percentage point on December 29 last year. In addition, KB Kookmin bank, Woori Bank, KEB Hana Bank, NH Bank and Industrial Bank of Korea will offer an extra one percentage point reduction in interest rates. For small merchants whose businesses have been negatively affected by the governments social gathering restrictions, a special lending program of up to KRW10 million will also be available from January 18 on top of the existing loan support. * Please refer to the attached PDF for details.
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