The FSC announced its plan to extend current debt service ratio (DSR) standards to non-bank financial institutions as one of the criteria for managing household loans. The DSR is the ratio of a household borrower’s total debt repayment (i.e. principal and interest payments) to his/her annual income. The DSR was first introduced to the banking sector from October 2018. Starting from June 17, 2019, the DSR will be implemented across the non-banking financial sector - e.g. savings banks, insurers and card companies.

IMPLEMENTATION PLAN

Differential target ratios will be set across the sector, reflecting different conditions faced with each sector and borrowers’ characteristics. The non-banking sector will be given enough time to gradually reduce their DSRs to target ratios to make sure borrowers’ access to loans is not excessively curtailed.

* Please refer to the attached file for details.