Financial stability is a prerequisite to innovation and inclusive finance policies. FSC maintains close market monitoring for any signs of market volatility and works to ensure stability in the financial markets. There are risk factors originating from abroad and from within. FSC focuses on making our economy more resilient from external shocks, such as a disruption in the global supply chain, and supporting Korea’s material, component and equipment industries to help boost their global competitiveness. Internally, FSC is closely monitoring the trends in household debt and seeking reforms to corporate restructuring in order to prevent domestic risk factors from turning into systemic risks. Policies aimed at increasing financial stability also include enhancing fairness in the financial markets by introducing a comprehensive legal framework for the supervision of financial conglomerates, improving market discipline and promoting transparency in corporate disclosure and accounting practices.
Mar 08, 2021
- FSC Announces New Rules on the Supervision of Non-holding Financial Groups
- The FSC announced its proposal of the Enforcement Decree to the new legislation on the supervision of non-holding financial groups on March 8. The proposal will be put up for public notice from March 9 until April 19, 2021 and will go into effect on June 30, the same day the new Act becomes effective. Key Provisions A. Non-holding Financial Group: Non-holding financial groups are those with total assets of KRW5 trillion or more with two or more number of subsidiaries operating financial businesses.To guarantee a steady application of the law, a temporary decline in total assets below the KRW5 trillion threshold will not remove them from being designated as non-holding financial groups for a three-year period. B. Internal Control Risk Management: Non-holding financial groups will be required to establish specific standards on internal control and risk management while conducting internal evaluation on a regular basis to ensure that measures for risk management, internal control and capital adequacy are properly maintained. C. Capital Adequacy Assessment: Non-holding financial groups should maintain their capital adequacy ratios at appropriate levels and carry out self-assessment on their group-wide risks. D. Intra-group transaction and Reporting Disclosure: Intra-group transactions in the amount of KRW5 billionor more should be first approved by the board of the relevant financial subsidiary. Non-holding financial groups will be required to file reports and disclose information on their ownership and governance structure, internal control risk management, capital adequacy and intra-group transaction risk concentration. E. Business Improvement Plan: Non-holding financial groups that are deemed to have problems with financial soundness will be required to draw up and submit business improvement plans aimed at enhancing their financial soundness. The FSC may request additional actions, including a revision or supplementary measure, and take appropriate actions in accord
Mar 02, 2021
- Maturity Extension and Payment Deferral for SMEs and Small Merchants Extended until September
- The FSC announced on March 2 the availability of the current loan maturity extension and deferment of principal and interest payment programs for SMEs and small merchants until the end of September this year. The decision for a six-month extension of the lending support for SMEs and small merchants comes amid the continuing social distancing measures and pandemic-inflicted hardship imposed on businesses. As such, qualified business entities may apply or reapply for lending support according to the same standards that were announced back in March 2020. Along with the six-month extension of the lending support, the FSC also announced measures to help ease payment burdens once the deferral period expires from October 1. For those who sign up for a consulting service, financial institutions will provide consulting on the most appropriate way to make long-term, installment payments possible based on different financial situations in which borrowers find themselves. At the same time, financial institutions will be required to closely monitor any changes in borrowers payment capabilities and provide assistance immediately when deemed necessary. * Please refer to the attached PDF for details.
Feb 26, 2021
- FSC Announces Korea's Risk-free Reference Rate
- Vice Chairman Doh Kyu-sang held the 35th financial risk assessment meeting and 3rd taskforce meeting on benchmark interest rate reform via teleconference on February 26. At the meeting, Vice Chairman Doh announced the authorities selection of the overnight repo rate of government bonds and monetary stabilization bonds as Koreas new risk-free reference rate (RFR). The following is a summary of Vice Chairman Dohs remarks. (Transition from LIBOR) The uncertainty surrounding the continuing availability of LIBOR beyond the end of 2021 requires financial institutions and businesses to be thoroughly prepared. In this regard, financial institutions and businesses are recommended to refrain from making new contracts based on LIBOR after the end of this year to minimize risks. For the current LIBOR-based contracts with maturities extending beyond the end of this year, fallback provisions should be added prior to the third quarter of this year. The financial authorities along with the relevant institutions have been operating a taskforce to prepare for the discontinuation of LIBOR under the auspices of the working group on reforming benchmark interest rate. The authorities will work for a seamless and systematic transition from LIBOR, ensure that financial institutions have adequate consumer protection measures in place and regularly monitor the financial institutions LIBOR exposures, response plans, etc. (Selection of RFR) The working group on benchmark interest rate reform has completed the selection of a RFR after a year and eight months of the selection process. After a series of discussions and votes by a market participants group,the working group has selected the overnight repo rate of government bonds and monetary stabilization bonds as the RFR. The repo markets abundant liquidity and its expandable use in derivatives markets were the main reasons for selection. After additional discussions on the calculation method of RFR, the Korea Securities Depository which current
Feb 22, 2021
- FSC Chairman Discusses Six-month Extension of Loan Deferment with Heads of Financial Associations
- FSC Chairman Eun Sung-soo met with the heads of the five major financial associations and federations on February 22 and held talks on the necessity of a six-month extension of the loan deferment program and ways to facilitate a soft landing of the termination of the temporary support measures. While agreeing on the need to extend the availability of the loan deferment program for six more months, the participants also vowed to come up with ways to help facilitate a soft landing when the suspension of principal and interest payments expires. In order to minimize burdens placed on the financial sector, the participants also shared the same view on the need to extend some of the temporary deregulatory measures granted to financial companies beyond their expirations. In this regard, Chairman Eun stated that the FSC plans to gradually roll back the temporary deregulatory and financial response measures based on a judgement of both quantitative and qualitative indicators in the following areas(a) COVID-19 prevention and containment, (b) real economy and (c) financial stability. Chairman Eun stressed that the policy rollback will take place both gradually and flexibly. During the meeting, Chaiman Eun also discussed this years financial policy agenda, including the governments plan for New Deal funds and investing in digital innovation to prepare for a post-COVID-19 economy. * Please refer to the attached PDF for details.
Feb 22, 2021
- FSC to Strengthen Liquidity Management of Specialized Credit Finance Companies
- The FSC announced a set of measures aimed at strengthening the liquidity management of specialized credit finance companies on February 22. The measures include (a) establishing best practice guidelines, (b) strengthening disclosure requirements and (c) gradually reducing the maximum leverage on credit finance (non-credit card) businesses. Background Specialized credit finance businesses are lenders without deposit-taking functions.They usually finance their business through borrowings or the issuance of corporate bonds and asset-backed securities (ABS). In particular, their heavy reliance on debt finance, about 73.9 percent of their financing,creates a problem of risk transfer to financial institutions holding their corporate bonds, especially if credit finance companies face solvency problems. In this regard, there have been concerns about credit finance companies turning into a conduit of systemic risk in times of an unexpected economic shock such as COVID-19. Therefore, liquidity problems of credit finance businesses can pose a risk not only to the borrowers with mid-to-low credit backgrounds but also to the real economy as they may cause a drop in consumption and corporate facility investment. Key Measures I. Best Practice Guidelines on Liquidity Management The best practice guidelines on specialized credit finance companies liquidity management will be introduced for implementation beginning in April this year. - (Target) Bond issuing credit finance companies and those with more than KRW100 billion in total assets will be subject to the new guidelines. - (Role of Board and Management) Board of directors should oversee the establishment and operation of liquidity management strategies and the company management should prepare specific management process and criteria and regularly report to its board members. - (Liquidity Risk Indicators) Major liquidity risk indicators include corporate bond maturity distribution, liquid asset ratio, short-term debt ratio, etc.
Feb 19, 2021
- FSC Chairman Holds Meeting with Heads of State-backed Financial Institutions
- FSC Chairman Eun Sung-soo held a meeting with heads of state-backed financial institutions on February 19 and discussed maintaining the loan deferment program for small merchants and SMEs for six more months and promoting K-New Deal initiatives and green financing. Key Issues A. Maintain Efforts to Overcome Pandemic-induced Crisis Chairman Eun and the heads of state-backed financial institutions agreed on the need to extend the availability of loan deferment of principal and interest payments for small merchants and SMEs for six more months. The heads of state-backed financial institutions raised the same voice and showed their willingness in providing additional liquidity, interest rate cuts and business consulting to help businesses in need. B. Promote K-New Deal and Financial Innovation While emphasizing the importance of implementing the K-New Deal initiative and cultivating innovative firms, Chairman Eun talked about the FSCs plan to draw up a special lending support guideline for businesses through which companies can get financing with minimum eligibility criteria. In addition, Chairman Eun urged close cooperation in the operation of New Deal funds. C. Promote Green Financing Chairman Eun discussed the importance of information sharing and minimizing overlaps in functions between different institutions. To promote a synergetic effect and cooperation, the FSC will set up a consultative body on green finance made up of state-backed financial institutions this year. * Please refer to the attached PDF for details.
Feb 18, 2021
- FSC Announces Rules Change to Improve the Recovery and Resolution Regimes of SIFIs
- The FSC announced a revision proposal for the Enforcement Decree of the Act on the Structural Improvement of the Financial Industry on February 18, which will be put up for public notice from February 19 to April 1, 2021. The revision proposal to the Enforcement Decree is a follow-up to the revised Act passed at the National Assembly in December last year which is aimed at strengthening the recovery and resolution regimes of the systemically important financial institutions (SIFIs) as recommended by the Financial Stability Board. The revisions are expected to help improve the preparedness and responsiveness of SIFIs in their crisis management. Key Revisions (Selection of SIFIs) The FSC should select SIFIs every year after considering their function, scale, ties to other financial institutions and influence on the domestic financial markets. In this regard, the selection of SIFIs will be confined to banks and bank holding companies. (Recovery and Resolution Plans) SIFIs will be required to prepare and submit their own recovery plans to the Financial Supervisory Service within three months from the day of being designated as a SIFI. The FSS will then immediately pass on their recovery plans to the Korea Deposit Insurance Corporation (KDIC) and be required to evaluate the recovery plans and file evaluation reports to the FSC within three months. At the same time, the KDIC will be required to draw up resolution plans and submit them to the FSC within six months. A deliberative body within the FSC will then decide on the final approval of both recovery and resolution plans within two months. In this regard, recovery plans should have been approved at a board meeting prior to being submitted and contain specific details about the role and responsibilities of board members and executives, major business areas, standards of determining crisis situations, specific crisis management measures, etc. The deliberative body within the FSC will be made up of an FSC commissioner (FS
Feb 17, 2021
- FSC Proposes Additional Rules Change on Virtual Asset Service Providers
- The FSC announced a revision proposal for the supervisory regulation on virtual assets on February 17 as the revised Act on Reporting and Using Specified Financial Transaction Information is scheduled to go into effect on March 25, 2021.The revision proposal will be put up for public notice from February 18 until March 2 and will take effect from March 25. Key Revisions (On Virtual Assets) The revised supervisory regulation contains the following details on pricing, exemption for real-name accounts, requirements for virtual asset service providers (VASPs), etc. - Pricing of virtual assets in fiat money for the purpose of sales, exchange or transfer will be determined by the price displayed by VASPs at the time of sales, exchange or transfer. - VASPs whose service activities entail no exchange of virtual assets with fiat money will be exempted from the real-name account rule that requires them to maintain real-name accounts with financial institutions. - New business registration, change and renewal forms have been established for VASPs. - A VASP will be allowed to serve as a broker between its own customer and another VASPs client only if the other party is a qualified AML compliant VASP and that verifying information on the other partys client is possible. - An adjustment has been made to the suspicious transaction reporting form to include virtual assets. (On STR Requirement) The revised supervisory regulation stipulates that financial institutions should file suspicious transaction reports to the KoFIU within three business days from the time of detecting suspicious financial transactions for money laundering by their AML officers. * Please refer to the attached PDF for details.
Feb 16, 2021
- FSC Chairman Discusses Extending Loan Payment Deferment with Heads of Financial Holding Groups
- FSC Chairman Eun Sung-soo held talks with the heads of the five financial holding groups on February 16 and discussed an extension of the availability of loan deferment of principal and interest payments currently set to expire at the end of March this year. In this regard, the participants agreed on the need to extend the availability of payment deferment for small merchants and SMEs for six more months considering the current COVID-19 situation, etc. Chairman Eun emphasized the importance of maintaining steady support for the real economy and stated that the financial authorities will work on an orderly rollback of the temporary support and deregulatory measures when conditions are permissible. During the meeting, Chairman Eun also talked about the leading role of finance in a post-pandemic era and shared key financial policy agendas for this year. *Please refer to the attached PDF for details.
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 accord
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.
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.
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.
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
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
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.
Jan 13, 2021
- FSC Announces Revisions to Enforcement Decree as a Follow-up to Improve Rules on Short Selling
- The FSC announced revisions to the Enforcement Decree of the Financial Investment Services and Capital Markets Act (FSCMA) on January 13 as a follow-up measure to the government’s effort to strengthen penalties on illegal stock short sale activities. The amendments will be put up for public comments until February 2, 2021.KEY REVISIONS(A) RESTRICTION ON SHORT SELLERS’ PARTICIPATION IN CAPITAL INCREASEThe revised FSCMA restricts short sellers from participating in a company’s capital increase via issuing new shares once the company has made such a plan public, except in certain cases. As such, the Enforcement Decree will be revised to determine a specific time period wherein the short seller’s participation in capital increase is restricted as well as specific cases for exception as specified below. If an investor has shorted a company’s stocks during the restriction period, the investor cannot participate in the company’s capital increase, except for the cases where the short selling is deemed to have no unjust effects on the issuing price as stated below.(RESTRICTION PERIOD) From one day after the disclosure of the company’s capital increase plan until the determination of the issuing price(EXCEPTIONAL CASES) (i) Purchase of new shares exceeding the amount of short positions between the time of the last short sale and the determination of the issuing price, (ii) participation in capital increase by trading units within a firm that operates separate trading units pursuant to the standards specified by the FSC that have no records of short selling the company’s stocks and (iii) short selling for market making or liquidity provision purposes(B) MAINTENANCE OF SHORT SALE TRANSACTIONS DATAThe revised FSCMA requires short sellers to keep their securities lending agreements for five years to be presented promptly to the relevant authorities upon request. As such, the Enforcement Decree will be revised to prescribe specific criteria to be maintained, includ
Jan 12, 2021
- FSC to Ensure Continuing Financial Support for Small Merchants and SMEs
- Vice Chairman Doh Kyu-sang held the 32nd financial risk assessment meeting via teleconference on January 12 to review the progress of the COVID-19 financial support programs for small merchants and SMEs.The following is a summary of Vice Chairman Doh’s remarks.(PROVISION OF COVID-19 FINANCIAL SUPPORT) Since February last year, a total of KRW67.5 trillion in financial assistance has been provided to small merchants, SMEs and middle market enterprises. KRW18.3 trillion in lending support has been provided to some 790,000 small business owners. State-backed financial institutions offered preferential lending support to some 43,000 SMEs and middle market enterprises. In this regard, the government’s prompt response to the pandemic helped to lay foundations for an economic recovery this year.(IMPORTANCE OF PREVENTIVE MEASURES) Strict adherence to social distancing and other virus preventive measures needs to take place for a successful economic rebound. Financial institutions should strictly adhere to the social distancing measures. The authorities have been regularly conducting site inspections in this regard. Financial institutions should also ensure that their contingency plans are in place for an effective response to emergency situations.(COVID-19 FINANCIAL RESPONSE PLAN) The government will continue to ensure that financial assistance is available for small merchants and SMEs. In response to the third wave COVID-19 spread, the government unveiled additional assistance measures to ensure the availability of support for small merchants hit by recent social gathering restrictions. Local banks also announced their plans to lower interest rates by about one percentage point. As such, the government will work to ensure that the newly available small merchant support program is ready for operation starting from January 18.(UNSECURED LOANS) Credit-based loans issued by five major banks at the beginning of this year rose KRW217.9 billion. Compared to the early-month tre
Jan 12, 2021
- Government Announces KRW650 Billion Investment in KAMCO to Support Corporate Asset Sell-offs
- The government announced its decision to make in-kind contribution of KRW650 billion in the Korea Asset Management Corporation to facilitate its operation of the corporate asset purchase program on January 12.The KAMCO has been operating the corporate asset purchase program mainly through bond issuance, which has led to a rise in its debt ratio in 2020 compared to the previous year. The government’s in-kind contribution in this regard will help contain the KAMCO’s debt ratio within 200 percent until 2022.The in-kind contribution of KRW650 billion raises the government’s total investment in the KAMCO from KRW580 billion to KRW1.23 trillion.With this capital increase, the government expects that the KAMCO will be able to provide more steady support for companies in need of asset sell-offs.* Please refer to the attached PDF for details.
Dec 29, 2020
- Extra Lending Support Available for Small Merchants Hit by Social Gathering Restrictions
- The government unveiled additional financial support for small merchants who have been hit by the recent heightening of social gathering restrictions at the 24th Meeting of the Central Economic Response Headquarters held on December 29. The newly announced support will be made available as soon as the system becomes ready at the lending institutions in mid-January 2021.KEY DETAILS(EXISTING PROGRAM) For all small merchants using the second phase small merchant financial support program, the current guarantee fee of 0.9 percent will be lowered to 0.3 percent for the first year for up to KRW20 million in loans.(NEW PROGRAM) A special lending support program will be newly launched to provide targeted support for small merchants who have been negatively affected by the recent heightening of social gathering restrictions. The new lending support for small merchants will be available for up to KRW10 million regardless of whether the borrower is a recipient of the government-sponsored second phase financial support program. There will be no guarantee fee for the first year with 0.6 percent fee rate applied from the second year.The lending institutions are recommended to make available these options to small merchants with low interest rates at their own discretion.* Please refer to the attached PDF for details.