Chairman Eun Visits Lotte Card Namdaemun Call Center Site
Financial Services Commission Chairman Eun Sung-soo is speaking at the joint briefing of real estate-related ministries held at the Government Seoul Office in Jongno-gu, Seoul on the 28th. Photo by Hyunmin Kim kimhyun81@
[Asia Economy Reporter Kim Jin-ho] Eun Seong-su, Chairman of the Financial Services Commission, emphasized on the 28th, "Please refrain from loan competition exploiting regulatory arbitrage between financial sectors." This is interpreted as expressing concern over the increasing number of borrowers who, due to the higher loan limits in the secondary financial sector with higher loan interest rates compared to banks, take loans from banks and then borrow more from savings banks or card companies in accordance with the Debt Service Ratio (DSR) standards.
Chairman Eun made these remarks during a visit to the Lotte Card Namdaemun Call Center in Jung-gu, Seoul, stating, "The rapid increase in loans in the secondary financial sector is worrisome. Please adhere to the household debt growth rate target set at the beginning of the year."
He expressed gratitude towards the secondary financial sector, saying, "I appreciate the role that credit card companies played in supplying funds to low-income people in need of living expenses during the process of lowering the maximum interest rate," but also urged, "Please manage risks related to card loans more thoroughly."
The Financial Services Commission is reportedly considering strengthening the DSR for the secondary financial sector from the current 60% to 40-50%.
Additionally, Chairman Eun personally inspected the implementation of quarantine measures in the financial sector following the application of the new Level 4 social distancing in the metropolitan area. He said, "All financial sectors, including the card industry, should strictly comply with core quarantine rules and actively participate in preventing the spread of COVID-19," and added, "Even in this severe quarantine situation, please maintain the functions of key financial infrastructure according to the business continuity plan to ensure that there is no disruption in financial services to the public."
Taking advantage of Chairman Eun's onsite visit, the Financial Services Commission plans to strengthen joint onsite inspections with the Financial Supervisory Service, focusing on vulnerable areas such as call centers, and continuously encourage the smooth implementation of the new social distancing measures.
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