National Assembly Raises Depositor Protection Limit from 50 Million Won to 100 Million Won

Deposit Protection Limit Raised for the First Time in 23 Years
Passage of the Loan Business Act and Others Nullifies Anti-Social Illegal Loan Contracts

On the 27th, the National Assembly held a plenary session and passed an amendment to the Depositor Protection Act to raise the deposit insurance payout limit to over 100 million won. An amendment to the Act on Registration of Credit Business and Protection of Financial Users, which strengthens penalties for illegal private lending businesses, was also processed.

During the plenary session, the National Assembly approved the amendment to the Depositor Protection Act with 184 votes in favor out of 184 members present. The amendment includes provisions to raise the deposit insurance payout limit to a range exceeding 100 million won.

On the 27th, the nomination consent bill for Supreme Court Justice candidate Ma Yong-ju is being submitted at the National Assembly plenary session. Photo by Kim Hyun-min

The implementation period is set within one year after promulgation, allowing financial authorities to determine the specific application timing considering market conditions. Due to this amendment, the depositor protection limit, which had remained at 50 million won since 2001, will be increased.

The plenary session also processed the Credit Business Act. The term for unregistered credit businesses was changed to illegal private lending businesses, and grounds were established to nullify principal and interest for antisocial illegal lending contracts, such as cases involving sexual exploitation collection during loan contracts, human trafficking, bodily injury, or when the loan interest rate exceeds three times the maximum interest rate (20% per annum) or the rate prescribed by presidential decree. Interest agreements during loans by illegal private lending businesses are invalidated, and penalties for crimes directly related to illegal private lending were increased from “imprisonment of up to 5 years or a fine of up to 50 million won” to “imprisonment of up to 10 years or a fine of up to 500 million won.” The self-capital requirement for credit business registration was raised from 10 million won to 100 million won. The amendment will take effect six months after promulgation.

The Act on Prevention and Protection of Industrial Technology Leakage, which relaxes the requirements for establishing industrial technology infringement to strengthen industrial technology protection, also passed the plenary session. According to the amendment, penalties will be strengthened for leaking national core technologies and industrial technologies to the National Assembly.