Government and Saemaeul Geumgo Joint Audit... Focused Inspection on Household Loans and PF

Ministry of the Interior and Safety and Financial Authorities to Expand Participating Institutions and Personnel for 3 Weeks from the 18th... Loan Inspections Included

The government is launching a large-scale joint audit of the Saemaeul Geumgo Central Association. This is a comprehensive audit conducted regularly every year, but this year, the number of participating institutions and personnel will be increased for the inspection. The appropriateness of handling household loans and the situation of non-performing real estate project financing (PF), which have been controversial several times, are expected to be the main focus.

According to the Ministry of the Interior and Safety and financial authorities on the 13th, the joint comprehensive audit targeting the Central Association, conducted once a year, will take place from the 18th of this month until December 6th.

Yonhap News

This year's audit is the first joint audit conducted after the Ministry of the Interior and Safety and the Financial Services Commission signed a memorandum of understanding to strengthen the soundness supervision of Saemaeul Geumgo, which experienced a 'bank run' crisis (mass withdrawal of deposits).

Accordingly, the number of participating institutions and personnel size has somewhat increased. The joint audit team includes the Ministry of the Interior and Safety, the Financial Supervisory Service, the Korea Deposit Insurance Corporation, the Insurance Development Institute, the Korea Inclusive Finance Agency, and the Asset Management Corporation.

The audit is known to review the appropriateness of frontline Geumgo guidance and supervision, the management status of credit soundness, fund operation, and overall business operations. The appropriateness of handling household loans is also expected to be a subject of inspection, as Saemaeul Geumgo led the increase in household debt in the secondary financial sector by surging household loans by 1 trillion won last month alone. In addition, the status of the cleanup of non-performing real estate PF, which triggered the Saemaeul Geumgo bank run crisis, is also known to be a target of inspection.