Sliding Management
Out-of-region loans refer to loans where none of the borrower's address, business (workplace), or collateral real estate location fall within the same region as the Saemaeul Geumgo branch handling the loan. Out-of-region loans cannot exceed one-third of the total new loans issued in the current year. The regions are divided into nine areas: Seoul·Incheon·Gyeonggi, Busan·Ulsan·Gyeongnam, Daegu·Gyeongbuk, Gwangju·Jeonnam, Daejeon·Sejong·Chungnam, Gangwon, Chungbuk, Jeonbuk, and Jeju.
The sliding management plan, introduced this year, gradually lowers the cumulative quarterly limit for out-of-region loans. If a branch exceeds the quarterly limit, it is prohibited from issuing out-of-region loans in the following quarter. This system is designed to keep the annual total out-of-region loan ratio within 33%.
For example, if a branch's out-of-region loan ratio exceeds 60% in the first quarter of this year, it will not be allowed to issue out-of-region loans in the second quarter. If the cumulative ratio exceeds 50% at the end of the second quarter, the branch will be prohibited from issuing out-of-region loans in the third quarter. If the cumulative ratio exceeds 40% at the end of the third quarter, out-of-region loans will be banned in the fourth quarter, ensuring that the annual total remains within 33%.
Any Saemaeul Geumgo branch whose out-of-region loan ratio exceeded 33% for two consecutive years from 2023 to last year will be completely barred from issuing out-of-region loans in 2025.
A representative from the National Credit Union Federation of Korea stated, "We will strictly manage branches restricted from issuing out-of-region loans through quarterly limit controls," and added, "We will continue to establish various systems to ensure regulatory compliance in advance, not only by detecting violations after the fact through inspections, but also by taking proactive measures."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
