Press Releases - Financial Services Commission

Press Releases

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Feb 05, 2024

FSC and MOIS Sign MOU to Bolster Prudential Supervision on MG Community Credit Cooperatives

The Financial Services Commission announced that it has signed a memorandum of understanding (MOU) with the Ministry of the Interior and Safety (MOIS) to strengthen cooperation between the two organizations to bolster supervision over MG Community Credit Cooperatives (MGCCC) on February 5. In the wake of large-scale deposit outflows that took place at MGCCC last year, the FSC and the MOIS came to agree on the need to expand the role of financial authorities in carrying out prudential supervision over MGCCC. Shortly thereafter, in December last year, the Financial Supervisory Service (FSS) and the Korea Deposit Insurance Corporation (KDIC) each set up an internal organization tasked with supervising MGCCC. In this regard, todays agreement lays out rules and principles needed to build a stronger cooperative supervisory network between the two organizations. Key details of the agreement are as follows. First, regarding the rules and procedures, the MOIS will decide on MGCCCs prudential management standard in consultation with the FSC and on a par with the prudential standards observed by other types of mutual financial businesses. Second, regarding information sharing, the FSC will be able to regularly and frequently receive information needed to ensure prudential supervision over MGCCC from the MOIS. Third, regarding inspection and post-inspection measure, the MOIS and the FSC will mutually consult with each other in establishing a plan for inspection and deciding on a post-inspection measure. At the MOU signing event, FSC Chairman Kim Joo-hyun pledged to actively cooperate with the MOIS and urged related authorities to make sure a seamless operation of the joint inspection units. The government expects that this agreement will serve as a first step in helping to bolster prudential supervision on MGCCC. * Please refer to the attached PDF for details.
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Feb 01, 2024

FSC Proposes Revision to Supervisory Regulation on Electronic Financial Services

The Financial Services Commission proposed a revision to the supervisory regulation on electronic financial services on February 1. The revision is intended to shift the current regulatory framework from rule-based to principle-based one, allowing more room to make autonomous decisions for financial companies, and bolster the resilience of electronic financial system to disasters and cyberthreats. It has been pointed out that the current framework of the supervisory regulation on electronic financial services, which remained little changed since it was established in 2006, makes it difficult to flexibly respond to evolving security threats and encourage passive responses from financial companies. In particular, there has been a growing need for making financial industrys cybersecurity system more adaptable and resilient in response to technology advances (e.g. artificial intelligence or cloud computing) and evolving cyberthreats. Against this backdrop, the revision proposal is focused on allowing more room for financial companies to make decisions on their own on financial security matters and encouraging them to make more investment in cyber security by making financial security regulations more goal-and-principle oriented. First, the revision proposal reduces the number of rules to 166 from 293 previously to ensure that financial businesses can flexibly respond to new risks. Instead of prescriptive and exhaustive rules, the revised regulations will only present principles and goals and allow financial companies to make decisions on details on their own. For example, the revision proposal abolishes provisions specifying the method of creating users passwords and allows financial companies to adopt their own method of creating passwords and managing authentication system. Second, to bolster cyber resilience against disasters and electronic incidents, the revision proposal introduces requirements for certain types of small- and medium-sized financial companies and el
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Feb 01, 2024

FSC Seeks to Bolster Cyber and Information Security Capacity and Resilience of Financial Industry

The Financial Services Commission held a meeting with relevant authorities and financial companies on February 1 and announced plans to bolster cyber and information security capacity and resilience of the financial industry. At the meeting, authorities also unveiled and discussed key details of the revision proposal for the supervisory regulation on electronic financial services, which is put up for public comment until March 12. Vice Chairman Kim Soyoung of the FSC delivered opening remarks at the meeting, emphasizing on the need to establish a forward-looking cyber and information security system in the financial industry amid rapid changes taking place in digital sphere, such as cloud computing and artificial intelligence, and the evolving nature of cybersecurity threats. In this regard, Vice Chairman Kim said that it is necessary to focus on making financial industrys cybersecurity system more adaptable and resilient. To this end, the FSC will make the cyber and information security system more goal- and principle-oriented and encourage financial companies to boost their own cybersecurity capacity and bolster resilience to cyberthreats. With the revision of the supervisory regulation being proposed today, Vice Chairman Kim said that the approach to cyber and information security will shift from a narrow and compliance-focused practice of the past to a more comprehensive, proactive and self-driven one. Beginning with this rules change, the FSC will seek to revise the Electronic Financial Transactions Act in the future to strengthen financial companies self-governance responsibility over cyber and information security. Some of the key details of the revision proposal for the supervisory regulation on electronic financial service include (a) making rules simpler and allowing more room to make autonomous decisions for financial companies by reducing the number of rules to 166 from 293 previously, (b) requiring certain types of small- and medium-sized financial comp
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Feb 01, 2024

Personal Debt Workout Program to Incorporate Missed Payments on Mobile Phone Bills

The Financial Services Commission announced a plan to provide an integrated financial-telecom debt adjustment service to debtors through close cooperation with the Ministry of Science and ICT and Credit Counseling and Recovery Service. Once the service becomes available, the personal debt adjustment program run by CCRS will offer a one-stop debt workout service to debtors for their financial debts as well as missed payments on their mobile phone bills. The method and extent of debt adjustment for both financial debts and missed payments on mobile phone bills will depend on each debtors income situation. Currently, CCRS is coordinating with telecommunications businesses to reach a final agreement, which is expected to be concluded in the first quarter. Once the agreement is in place, authorities will work on rules change and system upgrade to start providing the integrated financial-telecom debt adjustment service in the second quarter of this year. * Please refer to the attached file for details.
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Jan 31, 2024

FSC Decides on the Method and Procedure for Authorizing a Regional Bank's Transition to Become a Nationwide Operator

The Financial Services Commission held its second regularly scheduled meeting of the year on January 31 and discussed the method and procedure for authorizing a regional banks transition to become a nationwide operator under the Banking Act. On July 5, 2023, the government announced a plan to promote regional banks business expansion to become nationwide banking business operators as a way to spur competition in the banking industry. Under the current licensing system, all nationwide, regional and internet-only banking businesses need to get authorization from the FSC under the Article 8 of the Banking Act. Although most requirements and procedures are same for authorizing the operation of banking business, there are different requirements for minimum capital and maximum shareholding by a non-financial entity. Nonetheless, the Banking Act currently has no explicit provision on the issue of authorizing a regional banks transition to become a nationwide banking business operator. Some have commented in favor of allowing this through changes in the articles of incorporation for expanding the scope of business operation from a specific geographic region to nationwide. However, as this constitutes a critical matter from the standpoint of supervising financial institutions, the FSC finds it inappropriate to allow the transition from a regional bank to a nationwide banking business operator only through changes in articles of incorporation and without having a proper authorization process. Thus, the financial authorities prepared the following method and procedure for authorizing a regional banks transition to a nationwide operator under the current regulatory framework. First, regarding the method for authorizing a transition of a regional banking business to become a nationwide operator, the FSC will apply a modification of conditions specified under the Article 8 of the Banking Act. A new authorization may be utilized to allow a regional banks transition to become a nat
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Jan 31, 2024

Government and Financial Industry Announce Programs to Help Reduce Interest Rate Burden on Small Merchants

The Financial Services Commission announced that the government and the financial industry will provide interest rate support programs to help small merchants. First, banks will begin to offer refunds on interest payments to small merchants from February 5. A total of KRW1.36 trillion in interest refunds will be given to about 1.87 million small merchants who made interest payments at over 4 percent interest rates in the year of 2023. The amount of refund expected to be given to each small merchant on average is about KRW730,000. There is no need to apply for interest refunds as individual banks will contact small merchants with details. The first round of refunds will take place between February 5 and 8. Combined with the quarterly interest refunds of about KRW0.14 trillion, banks will be able to return about KRW1.5 trillion in interest refunds in total. Aside from this, banks are planning to offer KRW0.6 trillion in support for vulnerable groups, specific plans for which will be finalized at the end of March. Small merchants who borrowed from savings banks, mutual finance unions and specialized credit finance businesses can also receive interest refunds if they have business loans from nonbanks with interest rates between 5 percent and 7 percent. It is expected that about 400,000 individuals will be eligible to receive interest refunds amounting to maximum KRW1.5 million per individual. The nonbanks interest refund program will open in mid-March and begin providing refunds from March 29. Since September 30, 2022, the FSC and Korea Credit Guarantee Fund (KODIT) have been operating a low interest rate refinancing program for small merchants. Through this program, small merchants were able to refinance their business loans at much lower interest rates, switching from about 10.06 percent interest rate previously to 5.48 percent on average. Previously, this program was designed to provide support for switching small business loans that were issued on or before the last
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Jan 30, 2024

FSC Holds Meeting and Announces Measures to Upgrade Rules on Treasury Stocks of Listed Companies

The Financial Services Commission held a meeting with officials from related authorities, industry groups and research organizations on January 30 to discuss and announce measures to improve rules on treasury stocks of listed companies. The authorities prepared the measures after having a policy seminar on this topic in June last year and drawing opinions from various stakeholders and experts. At the meeting, FSC Vice Chairman Kim Soyoung delivered opening remarks, outlining market participants views on Koreas treasury stock system and proposing measures for improvement. The following is a summary of Vice Chairman Kims remarks. Unlike in the U.S. or other advanced markets, treasury shares in Korea have often been utilized for bolstering the control of major shareholders in a company, as opposed to their primary goal of increasing shareholder value. This has been made possible mainly because allocation of new shares is permitted on treasury stocks when companies spin off their business units, so that treasury stocks were used to bolster the control of major shareholders. Moreover, information about treasury stocks has not been made available in the market either in a timely or adequate manner, which presents the potential for damaging the rights and interests of general shareholders. Therefore, to protect the rights and interests of ordinary shareholders in corporate spin-offs, authorities will prohibit allocation of new shares on treasury stocks. In addition, authorities will upgrade rules to ensure a thorough review on the preparation of investor protection measures when a newly established company intends to list on an exchange after the spin-off. In addition, to ensure the provision of transparent information on the acquisition, holding and disposal of treasury stocks, authorities will upgrade rules to require listed companies to disclose in detail when the proportion of their treasury stock holding rises above a certain level and to strengthen disclosure duty fo
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Jan 26, 2024

FSC Holds 1st Fintech Open Networking Day

The Financial Services Commission held the first Fintech Open Networking Day on January 26 with fintech businesses, financial companies and investment firms joining along with related organizations. The event was organized to support networking between fintech businesses, financial companies and investment firms in a more systematic way with the need to expand business-to-business (B2B) collaboration with financial companies and facilitate investment through venture capital. The event also offered one-on-one mentoring and other networking and consulting opportunities to early-stage fintech businesses, which may face difficulties and lack experience in dealing with regulatory issues, expanding their businesses overseas or securing investment. During the event, a memorandum of understanding (MOU) was signed by ten financial holding companies, banks and fintech industry groups and agreed on fostering a more cooperative business environment, expanding support for fintech incubation, investment and overseas expansion, and holding more fintech-focused advertisement and investment activities. At the event, a total of seven financial companies and four investment firms made presentations on the potential areas of collaboration and investment strategies based on each organizations strength. FSC Vice Chairman Kim Soyoung attended the event and delivered congratulatory remarks highlighting the importance of collaboration between diverse players in the fintech ecosystem. In this regard, Vice Chairman Kim said that the government will also make continuous efforts to facilitate a revitalization of the fintech industry. The FSC will hold the Fintech Open Networking Day on a biannual basis and plans to provide more networking opportunities through the annually held Korea Fintech Week (expected to be held in August this year) and a series of meetup events organized throughout the year for financial companies and fintech businesses. * Please refer to the attached PDF for details.
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Jan 25, 2024

Supply of Policy Mortgage Loans to Concentrate on Non-speculative Homebuyers

The Financial Services Commission announced that the operation of an integrated policy mortgage loan program under the Special Bogeumjari Loan scheme will end on January 29 as scheduled, which will be switched back to the regular Bogeumjari Loan program from January 30. The volume of policy mortgage loans planned to be supplied under the Bogeumjari Loan program will be KRW10 trillion-plus on an annual basis. Depending on market demands and implementation of other types of policy funds, authorities will flexibly adjust the supply of policy mortgage loans. However, the sum of all types of policy mortgage loans made available will be maintained at around KRW40 trillion, a 10-year average. The supply of Bogeumjari Loan will be focused on lower-income households and non-speculative homebuyers, with added benefits available for vulnerable groups. Newly married couples, households with multiple children and victims of housing rental (jeonse) scams will be eligible for eased borrowing conditions. In general, Bogeumjari Loan will be available for households with a combined annual income of KRW70 million or less and for houses valued at KRW600 million or less. For newly married couples, the combined annual income of up to KRW85 million will be allowed. Households with multiple children will be eligible for higher income thresholds and more loan amounts. There is no income restriction for the victims of jeonse frauds who will be eligible to borrower from Bogeumjari Loan to purchase homes valued up to KRW900 million. Interest rates for Boguemjari Loan will be set between 4.2 percent and 4.5 percent. Support for interest rates will be available for vulnerable groups on varying degrees to ensure the supply of policy mortgage loans at about mid-three-percent interest rates to them. The FSC also plans to work on various measures to promote the supply of longer-term mortgage loans by commercial lenders. First, authorities will encourage banks to handle more of the less risky mortgag
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Jan 23, 2024

FSC Announces a Plan to Improve the Soundness of the Convertible Bond Market

Vice Chairman Kim Soyoung of the Financial Services Commission held a meeting with officials from relevant organizations and industry groups and announced a plan to bolster the soundness of the convertible bond (CB) market on January 23. The measures included in the plan are intended to strengthen rules on disclosure of information on the issuance and distribution of convertible bonds, making improvements to the current refixing rules and procedure, and strengthening investigation over unfair trading activities involving CBs. The FSC expects that these measures will help to address the following three oft-cited problems regarding the CB marketthe lack of transparency in the issuance and circulation of CBs, the arbitrariness in the refixing of convertible prices, and the potential misuse in unfair trading activities. In this regard, the FSC has prepared the following three measures to address these problems, taking into account opinions and suggestions raised during the public seminar held on the topic in last July. First, the disclosure of information about the issuance and circulation of CBs will be strengthened to boost transparency in the market. Authorities will seek to ensure that the types of information that can be critical to the corporate governance structure and share valuation, such as information about the entity designated by the company to exercise the call option and the plan for CB selloff close to maturity, are opened up to the public in a more transparent way. Second, the rules and procedure for refixing convertible prices of CBs will be made more reasonable. Current rules set the minimum level of refixing at 70 percent of the initial convertible price and allow companies to refix convertible prices below the minimum level only in exceptional casese.g. corporate restructuringvia securing a special resolution at a general shareholders meeting or through their articles of incorporation. However, some companies have exploited such exceptions to the ru
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Jan 18, 2024

Strengthened Penalties on Unfair Trading Activities in Capital Markets Take Effect from January 19

The Financial Services Commission announced that the revised Financial Investment Services and Capital Markets Act (FSCMA) and its subordinate statutes will go into effect on January 19. The revision deals with (a) introducing a penalty surcharge system on unfair trading activities, (b) legislating a method for calculating the amount of unfairly gained profits, and (c) providing a leniency to those reporting violations committed by oneself or others. The revised rules were prepared through close consultation and discussion with the Ministry of Justice, the Supreme Prosecutors Office, the Financial Supervisory Service and the Korea Exchange. The authorities expect that the changed rules will help to more effectively detect and prevent unfair trading activities and more strictly apply sanctions on illegitimate activities. First, the revision introduces a penalty surcharge system on unfair trading activities and enables authorities to impose a penalty surcharge of up to twice the amount of unfairly gained profits (maximum KRW4 billion when there is no illicit profit made or it is impossible to calculate an amount). Previously, only criminal penalties were available as a method of sanctioning unfair trading activities, which usually took long time to reach a decision by the court with the strict application of burden of proof. With the introduction of penalty surcharge, a speedier and more effective sanctioning will now be possible on unfair trading activities. In terms of the procedure for imposing a penalty surcharge, in principle, the FSC is able to impose a penalty surcharge after receiving an outcome of investigation from the prosecution service. However, when the matter has been consulted with the prosecution service or if it has been more than a year since the case was first reported to the prosecution service, the FSC is allowed to impose a penalty surcharge even before receiving an investigation outcome from the prosecution service. Second, the revision establi
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Jan 18, 2024

Rules Change Approved to Officially Introduce BCBS Large Exposure Limit on Banks from February 1

The Financial Services Commission held its first scheduled meeting of the year on January 18 and approved the previously proposed rules change to the supervisory regulations on banks and financial holding companies. The regulatory change officially establishes the large exposure limit recommended by the Basel Committee on Banking Supervision (BCBS) to bring domestic financial rules more aligned with global standards. In this regard, the changed rules are similar to the banks and financial holding companies credit extension limit being observed under the existing legal framework in that it requires banks and financial holding companies to keep large exposures to a counterparty (or a group of affiliated counterparties) within 25 percent of their core capital (20 percent for D-SIBs). However, the under the revised rules, the scope of counterparties has been broadened to include entities in both controlling relationship and economically dependent relationship. The revised rules also incorporate a wider scope of credit exposures since they include both credit extensions such as loans and financial products such as stocks and bonds as well as third-party guarantees. Thus, the revised rules will allow a more comprehensive and integrated way of managing counterparty credit risks. The revised rules will go into effect from February 1. Authorities expect that this will help to improve the management of large-scale concentration risks in the banking sector. The financial authorities will continue to closely monitor risks in the banking sector and seek changes in rules needed to boost regulatory consistency with global standards. * Please refer to the attached PDF for details.
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Jan 17, 2024

Government Holds Policy Forum on Enhancing the Role of Finance to Expand Co-prosperity and Ladder of Opportunity

The government held the fourth round of policy forum on the topic of strengthening the role of finance to foster co-prosperity and expand the ladder of opportunity, presided over by President Yoon Suk Yeol on January 17. At the forum, the Financial Services Commission presented the governments plans to enhance the role of finance to help expand the ladder of opportunity in the following three ways(a) strengthening the role of capital markets to facilitate asset accumulation of the public, (b) reducing the burden of high interest rates for vulnerable groups, and (c) assisting vulnerable groups to recover and regain footing from financial difficulties and debt problems. I. Strengthening the role of capital markets First, the government will strengthen tax incentives to support asset accumulation of the public. In this regard, the previously planned capital gains tax (for introduction in 2025) on financial investment income will be repealed. For individual savings accounts (ISAs), the maximum savings limit (ISA allowance) will be raised from KRW20 million a year for a total of KRW100 million previously to KRW40 million a year for a total of KRW200 million. The tax deductible limits for dividend and interest income will be raised from KRW2 million and KRW4 million (for agro-fishery types) previously to KRW5 million and KRW10 million (for agro-fishery types). A new type of ISA will be created for investments exclusively in domestic stocks and funds. Investors subject to aggregate taxation on financial income will also be eligible to sign up for this type of ISA for which a separate tax rate of 14 percent will be applied without any deductible. Second, the government will seek regulatory reforms intended to create a more investor-friendly environment in capital markets. To this end, authorities will seek to revise the Commercial Act to enhance protection for the rights and interests of small shareholders through strengthening the accountability of company executives and m
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Jan 15, 2024

1st Fintech Open Networking Day Scheduled for January 26

The Financial Services Commission announced that the first Fintech Open Networking Day is scheduled to be held for fintech businesses, financial companies and investors on January 26. This event will provide a venue for networking among fintech businesses, financial companies and investment companies to promote closer cooperation and collaboration in digital finance and provide more funding opportunities. From now on, the Fintech Open Networking Day will be held on a biannual basis. Unlike the previous fintech demo day or IR (investor relations) events where fintech companies pitched their ideas and business models to financial companies and investors, in the Fintech Open Networking Day, financial companies and investors will present potential areas of collaboration and investment strategies to fintech startups. There will be seven financial companies attending the first Fintech Open Networking Day in January. They will share their annual plans for operating fintech labs and the areas of potential fintech collaboration in their drive to digital transformation. In addition, there will be four fintech investment fund management companies joining the event to present their investment aims and fund management strategies. Each financial company or fund manager will operate an on-site consultation booth to provide follow-up consultation to fintech businesses. Industrial Bank of Korea and Korea Credit Guarantee Fund, with plans to provide fintech-specific policy finance products in 2024, will also join on-site booths to make available relevant information. Moreover, a mentoring program with fintech leaders will be available for sharing their experience and know-how of handling challenges with early-stage fintech startups. Application to join the Fintech Open Networking Day can be found on the official website of Fintech Center Korea (https://www.fintech.or.kr/). * Please refer to the attached PDF for details.
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Jan 15, 2024

Financial Industry Signs MOU to Provide Prompt Credit Recovery Support for Borrowers in Payment Delinquency

Chairman Kim Joo-hyun of the Financial Services Commission attended an MOU (memorandum of understanding) signing event held for financial industry groups and credit information companies with an aim to provide prompt credit recovery support for borrowers in payment delinquency on January 15. This agreement signing is a follow-up to the meeting held at the National Assembly on January 11 in which the financial sector, the ruling party and the government discussed the need to promptly make available credit recovery support for those in need. To this end, the financial industry associations agreed to suspend the practice of sharing and making use of borrowers past delinquent payment information when their late payments have been fully paid. At the event, FSC Chairman Kim said that it is necessary to give a second chance to those who fell victims to the unavoidable and abnormal environmental circumstances, such as the effects of COVID-19 and continuation of high interest rates and high prices. There are currently some 2.9 million individuals experiencing difficulties in having normal access to financial services due to their delinquent payment history. In this regard, Chairman Kim expressed his appreciation for the financial sector for quickly proceeding with the agreement and urged financial companies to promptly make such help available. The financial industry groups and credit information companies said that they will quickly make relevant adjustments to their computer system to halt the sharing and making use of borrowers past delinquent payment information as early as from March 2024. * Please refer to the attached PDF for details.
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Jan 11, 2024

FSC Chairman Attends Meeting on Credit Recovery Support

Chairman Kim Joo-hyun of the Financial Services Commission attended a meeting held at the National Assembly on January 11 on the issue of providing credit recovery support for individuals and small business owners. At the meeting, participants talked about the difficult circumstances experienced by those who have acquired late payment history on loans due to COVID-19, high interest rates and high inflation, even when after they are finished with making payments on their loans due to a prolonged stigma attached to credit delinquency for a certain period of time. In this regard, considering the severity of economic situation, FSC Chairman Kim asked the financial sector to seek active ways to provide credit recovery support as it was previously made available during the similarly difficult times in January 2000, May 2001 and August 2021. More specifically, Chairman Kim asked the financial sector to make assistance available for the borrowers who accrued late payments of maximum KRW20 million between September 2021 and January 2024 and have completely paid up their late payments in full, as an extension of the same credit recovery support measure made available for them since August 2021. In addition, Chairman Kim said that the individual debt restructuring program offered by Credit Counseling Recovery Service needs to be bolstered to take into account the fact that about forty percent of delinquent borrowers are those who are behind their mobile phone bills. In this regard, Chairman Kim added that an integrated and more comprehensive debt restructuring program needs to be made available, joined by telecommunication service providers. The financial sector agreed to finalize a plan on credit recovery support by early next week. The authorities expect that some 2.9 million individuals will benefit from the credit recovery support as their credit delinquency history will be erased from the record. * Please refer to the attached PDF for details.
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Jan 10, 2024

Authorities Hold Meeting to Discuss Ways to Continue to Stably Manage Household Debt Growth in 2024

The Financial Services Commission held a meeting with relevant authorities, organizations and industry groups on January 10 to go over the current household debt situation and discuss strategies to effectively control household debt growth in 2024. At the meeting, participants shared the same view that the current trend of household debt growth appears to be on a stable course as the year-on-year growth of KRW10.1 trillion at the end of 2023 is much smaller than the average annual growth of KRW83.2 trillion in the previous eight years. In this regard, the household debt to GDP ratio is also expected to have fallen in 2023 for the second straight year. While sharing positive assessments about the current household debt situation, participants also agreed on the need to stably control household debt growth with a more longer term perspective. To ensure that household debt growth continues to stay on a stable level, Secretary General Kwon Dae-young of the Financial Services Commission said that the following three principled strategies need to be observed in a consistent manner. First, the government will consistently work on reducing the countrys household debt to GDP ratio every year to ensure a stable management of growth in quantitative terms with an aim to bring it down within the level of annual economic growth. Second, the authorities will encourage the practice of borrowing within ones own debt repayment capability, while working to bring about regulatory improvements in debt service ratio (DSR). Third, the authorities will take steps needed to ensure the availability of microfinance support measures for vulnerable groups. Secretary General Kwon added that this will require close communication and cooperation between the authorities and financial institutions. * Please refer to the attached PDF for details.
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Jan 10, 2024

Household Loans, December 2023

The outstanding balance of household loans across all financial sectors went up KRW0.2 trillion in December 2023 (preliminary), showing a significant slowdown in the pace of growth from a month ago (up KRW2.6 trillion). In 2023, household loans increased KRW10.1 trillion across all financial sectors, up 0.6 percent from the end of last year. * Monthly change (in trillion KRW, y-o-y): +5.2 (Jul 2023), +6.1 (Aug), +2.4 (Sep), +6.2 (Oct), +2.6 (Nov), +0.2 (DecP) Annual change (in trillion KRW, y-o-y): +56.2 (2019), +112.3 (2020), +107.5 (2021), -8.8 (2022), +10.1 (2023P) (By Type) In December 2023, mortgage loans rose KRW5.1 trillion, slowing down from a rise of KRW5.6 trillion in the previous month. Other types of loans dropped KRW4.9 trillion, showing an accelerated pace of decline from a month ago (down KRW3.0 trillion). (By Sector) Household loans grew at a slower rate in the banking sector (up KRW5.4 trillion up KRW3.2 trillion), while declining at a faster rate in the nonbanking sector (down KRW2.8 trillion down KRW3.0 trillion). Mortgage loans from banks grew at a slightly slower rate from the previous month (up KRW5.7 trillion up KRW5.2 trillion) due to a suspension in the provision of a certain type of policy mortgage loan. Other types of loans fell KRW2.0 trillion due to the effects of year-end bonuses. Household loans from nonbanks fell KRW3.0 trillion in December 2023. Mutual finance businesses (down KRW1.6 trillion), savings banks (down KRW0.9 trillion), specialized credit finance businesses (down KRW0.5 trillion) and insurance companies (down KRW0.01 trillion) all saw declines in household loans. (Assessment) Household loans turned upward in 2023 from a drop in the previous year due to a recovery in the real estate market. Mostly, the growth was caused by policy mortgage loans extended to non-speculative homebuyers. Compared to previous years, the authorities evaluate that the pace of growth (up KRW10.1 trillion) is kept at a stable level currently. Nonet
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Jan 08, 2024

Online One-stop Loan Transfer Service Available for Home Mortgage Loans from January 9

The Financial Services Commission announced that the online one-stop loan transfer service set up in May last year to help borrowers get lower interest rates on credit loans will start to be available for home-backed mortgage loans and jeonse loans from January 9 and January 31, respectively. Borrowers will be able to use this service for mortgage loans secured with an apartment worth KRW1 billion or less and for guaranteed jeonse loans. From January 9, borrowers will be able to check eligibility and make a switch from seven online loan comparison platforms and the mobile apps of thirty-four individual financial companies. In the future, more financial institutions are expected to join the system. To ensure protection for financial consumers, the authorities have required a verification of algorithms for loan comparison platform service providers. The authorities also plan to require loan comparison platform service providers to disclose their commission rates to ensure that consumers are not burdened with extra fees. To make sure that the availability of loan transfer service for housing loans will not push up the size of household debt, the authorities have put in place certain restrictions. For instance, borrowers cannot switch to get more in total loan amounts and that the maximum amount available for the switched loan should be up to the remaining balance of loan. The maturity can be set equally as the initial loan period but cannot be extended to a longer period. To prevent abrupt money moves from taking place between financial institutions, the authorities will require them to establish maximum levels of handling housing loan transfers processed through this system, while closely monitoring the system usage in close coordination with the Korea Financial Telecommunications Clearings Institute and financial industry associations. * Please refer to the attached PDF for details.
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Jan 05, 2024

Authorities Plan to Introduce a Total Platform for Microfinance Assistance Available from June 2024

Chairman Kim Joo-hyun of the Financial Services Commission visited an inclusive finance support center operated by Korea Inclusive Finance Agency in Seoul on January 5 and held talks on the governments plan for microfinance support for this year with officials from relevant organizations participating. In his opening, Chairman Kim first talked about some of the efforts made by the government to boost assistance for vulnerable groups in the previous year. The size of policy funds supplied for microfinance assistance last year was the largest ever, amounting to some KRW10.7 trillion. Moreover, a total of KRW95.85 billion in small-sum living expense lending assistance was provided to those who lacked any income sources or fell behind debt payments. Along this line, authorities updated various assistance programs to strengthen financial inclusion and made available a comprehensive consulting and counseling program linking supports for employment, social welfare, debt restructuring and so on. For this years microfinance policy plan, Chairman Kim said that the government will focus on boosting convenience for end-users and assisting those in need to regain footing on their own. To this end, the government plans to launch an online total platform for microfinance assistance for operation from the first half of this year. The platform will help to guide users to find the most suitable microfinance products according to each users personal needs and situation and offer one-stop application service as well as the consulting and counseling support program. Developing this platform will mark the first step towards making the provision of microfinance assistance more efficient and user-oriented, since it will provide more personalized and comprehensive search results for comparison, while allowing users to search, compare, choose and apply all from a single platform. In order to tackle challenges facing vulnerable groups, Chairman Kim said that it is important to ensure the avai
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