"What’s the Use of Decades of Transactions?" The Meaning of Main Banks Fades Amid Frozen Funds

Loan Rejected by Main Bank... Better Terms with Another Bank Transaction

[Asia Economy Reporter Park Sun-mi]"My main bank says they won't offer mortgage loans temporarily until November. Is there any bank that still provides mortgage loans?"

The concept of a main bank is gradually fading. There are frequent cases where financial transactions are conducted under much better conditions at other banks rather than the main bank, and recently, due to a series of tightened loan regulations, even banks with decades of transactions are rejecting loans.

According to the financial sector on the 28th, internet real estate and finance communities are increasingly posting complaints from customers who have been rejected for loans by their main banks. They expressed frustration that their long-term banks have stopped handling loan products, leaving them unable to access funds when needed, let alone receive benefits. Along with inquiries about banks that still offer loans or provide the maximum loan limits, advice to compare loan limits and interest rates through consultations with loan specialists introduced by real estate agents or by visiting multiple banks in person is also noticeable.

The market largely agrees that the significance of the main bank's premium customer system is inevitably diminishing. With fintech and open banking making product comparisons increasingly active, access to other banks' products has become much easier. Currently, the top-tier customers of the four major commercial banks commonly receive benefits such as exemption from various transfer and withdrawal fees via phone, internet, and mobile, as well as partial reductions in customer burdens for preferential exchange rates.

For example, in KB Kookmin Bank's KB Star Club system, to achieve the highest MVP grade, one must meet a total asset requirement of over 30 million KRW and a score of over 10,000 points. The scoring is meticulously divided by product, such as 300 points for salary transfers, 3 points per 100,000 KRW of loans, and 10 points per 100,000 KRW of deposits, making it difficult to reach the highest grade with ordinary transactions.

A bank customer explained, "Because of the benefits that come with a high grade, I continue to transact with one bank, but in the current situation where loan handling varies by bank, regardless of being a premium customer, I look for banks where loans are possible and the limits are higher. Since services are largely similar across banks, switching banks does not cause much inconvenience."

As loan tightening in the banking sector is likely to continue until next year, it is expected that existing loyal customers will actively move as well. If one qualifies for the highest grade at their main bank, it is easy to meet preferential interest rate conditions for various financial products, but even without a high grade, there is a path to receive preferential benefits by simply meeting the basic conditions required for loans.

A representative from a commercial bank said, "Due to the suspension of loan product handling by banks, customers have no choice but to look for banks that offer loans. When they settle at a bank that provides loans, they inevitably take additional actions such as moving their salary accounts or installing the bank's application to receive even slight interest rate benefits."