Banks Demand 'Refinancing Loans Limited to Mid-Interest Rates'... Financial Services Commission "Unacceptable"

[Asia Economy Reporter Jin-ho Kim] Financial authorities have rejected the banking sector's proposal to limit the refinancing loan platform service to mid-interest rate loans.

According to the financial sector on the 24th, at a meeting held the previous day between the Financial Services Commission and the five major commercial banks, as well as internet-only banks, the FSC firmly established this position.

Earlier, on the 10th, the chairpersons of the five major financial holding companies met with Financial Services Commission Chairman Eun Sung-soo and expressed concerns about the refinancing loan platform being promoted by the authorities, suggesting limiting the service scope to mid-interest rate loans.

However, at the meeting, the FSC judged that the scale of mid-to-low credit loans or the number of customers in banks was too small to be effective. As of the end of last year, the scale of mid-interest rate loans by banks was only 250 billion KRW. Accordingly, the FSC confirmed its plan to proceed with the original proposal targeting all unsecured loans, which have high consumer demand.

However, the FSC gave a 'positive' evaluation of the independent refinancing loan platform that banks plan to create centered around the Korea Federation of Banks. This is because it can maximize consumer convenience. The public refinancing loan platform promoted through the Korea Federation of Banks is scheduled to open by the end of December.