Over 30,000 Credit Line Accounts Opened in 2 Weeks... 'Debt Investment' and Regulatory Anticipation Surge

A customer visiting a bank loan counter in Seoul is receiving consultation regarding a loan. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Kwangho Lee] It has been revealed that the number of newly opened overdraft accounts (negative balance accounts) exceeded 30,000 in two weeks at the five major banks: KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup. This is analyzed to be due to an excessive demand for credit loans in the banking sector amid the stock market boom.

According to the banking sector on the 24th, from the 4th to the 21st of this month, the total number of new credit loans through overdraft accounts at the five major banks was 31,305.

The number of new credit loans via overdraft accounts, which was about 1,000 per day at the end of last year, jumped to around 2,000 per day this month.

Accordingly, the balance of overdraft accounts at the five major banks increased by 676.6 billion KRW, from 46.531 trillion KRW at the end of last year to 47.2076 trillion KRW as of the 21st.

An official from a bank explained, "Recently, with the stock market boom and news of strengthened regulations by financial authorities, demand to secure credit limits in advance has increased, leading to a surge in newly opened overdraft accounts."

The financial authorities view that excessive loan increases could lead to overheating in the stock and real estate markets, so they believe proactive measures are necessary.

A financial authority official said, "While we cannot manage existing overdraft accounts, we are reviewing various measures regarding newly opened accounts."