920,000 Suspected 'Kkeokgi' Transactions Targeting SMEs Over 5 Years... Industrial Bank of Korea Ranks 1st

[Asia Economy Reporter Buaeri] Suspicious 'kkyeokgi' transactions targeting small and medium-sized enterprises (SMEs) have totaled 920,000 cases over the past five years, with suspicious transaction amounts exceeding 53 trillion won.

According to the 'Status of Suspicious Loan Kkyeokgi Transactions by Bank Targeting SMEs' submitted by the Financial Supervisory Service to Park Jae-ho, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, on the 23rd, the total number of suspicious 'kkyeokgi' transactions targeting SMEs by 16 commercial banks over the past five years was 924,143 cases, with suspicious transaction amounts totaling 53.632 trillion won.

'Kkyeokgi' refers to an unhealthy coercive practice where banks force customers to subscribe to products such as installment savings as a condition for granting loans. According to the Banking Act, if the monthly converted amount of savings, insurance, funds, gift certificates, etc., sold within one month before or after the loan execution date exceeds 1% of the loan amount without the borrower's consent, it is considered kkyeokgi and is regulated.

However, since financial products subscribed to after 30 days are not illegal, there is widespread use of loophole sales to avoid the one-month prohibition period. Therefore, subscribing to financial products between 31 and 60 days is regarded as suspicious coercive financial product transactions.

By bank, from 2017 to the first half of this year, IBK Industrial Bank of Korea had 294,202 suspicious transactions, accounting for 31.8% of the total suspicious cases among all banks, the highest share. IBK's suspected kkyeokgi transactions amounted to 20.056 trillion won.

Among the five major banks (KB Kookmin, Shinhan, Woori, Hana, NH Nonghyup), the number of suspicious transactions was in the order of KB Kookmin Bank (148,311 cases), Hana Bank (136,027 cases), Shinhan Bank (96,498 cases), Woori Bank (77,843 cases), and NH Nonghyup (36,884 cases). The amount of suspicious kkyeokgi transactions was highest at KB Kookmin Bank with 6.5297 trillion won, followed by NH Nonghyup with 5.3306 trillion won, Woori Bank with 4.9308 trillion won, Shinhan Bank with 4.1416 trillion won, and Hana Bank with 3.8696 trillion won.

Assemblyman Park pointed out that due to the impact of COVID-19 and rising loan interest rates, many SMEs are struggling to secure funding, making it difficult to refuse such product proposals when actually receiving loans from banks. He emphasized, "Despite being a policy bank established to support SMEs, IBK Industrial Bank of Korea is leading unfair practices such as 'kkyeokgi' targeting SMEs," and called for self-reflection within banks and inspections by financial authorities.