[1mmGeumyungTalk] "10% Savings Deposit an Employee Mistake?"...Local Nonghyup in an Uproar

[Asia Economy Reporter Bu Aeri] "Dear customers, we would appreciate it if you could kindly cancel your subscription." Namhae Livestock Agricultural Cooperative, located in Namhae, Gyeongnam, is struggling as it has been contacting customers to ask them to cancel their subscribed savings products on the 7th. As more financial technology enthusiasts move to find high-interest products, an awkward incident is unfolding at the regional mutual financial cooperatives.

According to the National Agricultural Cooperative Federation, Namhae Livestock Agricultural Cooperative is reportedly facing a management crisis as about 140 billion KRW poured into the recent special savings promotion offering interest rates in the 10% range. A representative of Namhae Livestock Agricultural Cooperative said, "This product was originally supposed to be conducted face-to-face, but due to an accidental opening of a non-face-to-face channel, the interest payments became difficult to handle, so we contacted customers."

The cooperative's liquid assets stood at only about 11 billion KRW as of the end of June, with cash assets at approximately 611 million KRW. In the text messages sent by Namhae Livestock Agricultural Cooperative, it was stated, "We have received deposits to an extent that is difficult for our cooperative to manage, resulting in excessive interest payments and causing management difficulties." Some customers, worried that the local cooperative might go bankrupt after receiving the notice, ended up canceling their savings.

A text message sent by Namhae Livestock Agricultural Cooperative to customers.

The National Agricultural Cooperative Federation has also begun investigating the incident. A federation official said, "A large amount poured in compared to the size of the cooperative, and we are discussing countermeasures on how to handle this."

Meanwhile, as the high-interest rate period continues, savings and deposit products offering high interest rates have emerged as a financial investment tool, and their impact is also being felt in the mutual financial sector. Recently, financial authorities are understood to have sent messages to credit unions and Saemaeul Geumgo urging restraint in interest rate competition. This is based on the judgment that if high-interest savings and deposit products cause negative margins, it could lead to soundness issues, and excessive competition for fund acquisition in the financial sector could disrupt the market.

A mutual financial sector official said, "We have distributed official letters to regional headquarters asking to refrain from recent deposit interest rate competition," adding, "While already planned special promotions are unavoidable, aggressive special promotions aimed at attracting new customers are expected to decrease significantly."