Banks Struggle to Establish Exceptions for Genuine Borrowers Amid Loan Regulations

Provisions for Job Transfer, Disease Treatment, and Parental Support

Recently, banks that had raised the lending threshold have begun to establish exceptions for genuine borrowers. This phenomenon emerged as banks responded to the financial authorities' contradictory directive to "curb the increase in household loans while protecting genuine borrowers."

According to the financial sector on the 16th, Shinhan Bank, while restricting jeonse (long-term deposit lease) loans for one-homeowners, decided to lend to 'genuine borrowers' who fall under seven cases: job relocation, children's school transfer, medical treatment, supporting parents aged 60 or older, school violence-related transfers, divorce, and acquisition of pre-sale rights.

For mortgage loans aimed at purchasing new homes, loans are allowed if the home purchase contract is signed on the condition that the existing home owned is sold on the same day the loan is executed.

KB Kookmin Bank took similar measures. While restricting loans for additional home purchases within the metropolitan area, loans are permitted if the existing home is disposed of and a new home is purchased. Those planning to marry within six months after the loan execution date and purchase a home, or those who inherit part or all of a home within two years from the loan application date, are also classified as genuine borrowers and eligible.

Woori Bank also decided to make exceptions to loan restrictions for marriage and relocation of workplace or school within the metropolitan area. Previously, Woori Bank had limited jeonse loan targets in the metropolitan area to those without homes and announced it would stop handling additional home purchase funds for homeowners.

All three banks plan to operate a 'dedicated genuine borrower screening team' to minimize inconvenience to genuine borrowers. This is an effort to maintain the regulatory tightening stance while minimizing harm to genuine borrowers.

This movement appears to follow the request by Lee Bok-hyun, Governor of the Financial Supervisory Service, on the 4th to "restrict speculative demand loans but carefully manage so as not to limit genuine demand." At the bank presidents' meeting held on the 10th under Governor Lee's chairmanship, the bank presidents agreed to continuously improve by discovering and sharing screening cases related to distinguishing genuine demand through the Bankers Association.