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(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Sangjin] According to financial industry sources on the 15th, the Financial Supervisory Service (FSS) initiated on-site inspections of Kookmin Bank that day as part of a thorough review of household loans. Shinhan, Hana, Woori, Nonghyup, and Kakao Bank are also scheduled for sequential inspections. The FSS aims to investigate whether there have been intentional circumventions of the Debt Service Ratio (DSR) regulation at bank counters.
The current borrower-specific DSR regulation limits annual loan principal repayments to no more than 40% of annual income. According to reports, some bank branches have been advising customers seeking credit loans that using long-term deferred payments reduces annual principal payments, thereby significantly increasing their borrowing limits. A senior official from the FSS stated, "We will verify whether such business practices were organized."
The FSS also plans to scrutinize whether regulations limiting the proportion of high-DSR borrowers are being adhered to. Financial authorities have instructed commercial banks to manage the share of loans exceeding DSR thresholds of 70% and 90% to no more than 5% and 3% of total loans, respectively, due to increased risks of delinquency associated with higher DSRs. Authorities report that borrowers with DSRs exceeding 70% often struggle with loan repayments after deducting minimum living expenses from their income.
The FSS is set to focus intensively on Nonghyup Bank regarding high-DSR target proportions. Nonghyup Bank benefits from relaxed regulations considering its support for agricultural workers. It is regulated to maintain high-DSR loans within 15% for those exceeding 70% and 10% for those exceeding 90%. Financial authorities plan to strengthen loan assessments for high-risk borrowers nearing their limit.
The pace of deferred payment increases has accelerated. As of the 11th, the combined balance of collateralized loans at the top 5 banks reached 554 trillion 264 billion won, increasing by 1 trillion 351 billion won in just one week. Kookmin Bank saw its collateralized loans rise by 239.8 billion won in just one day on the 12th, indicating a sharp upward trend.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
