To Verify Loan Screening Regulations
Three Major Banks: Woori, SC, NH Nonghyup
All Financial Sectors Including Savings Banks and Insurance Companies
The financial authorities have begun on-site inspections across all financial sectors to ensure that mortgage loans and unsecured loan screenings are being properly conducted, following the recently announced stringent real estate loan regulations.
An official from the Financial Supervisory Service stated on June 30, "We have started on-site inspections today, covering all financial sectors including Woori Bank, SC First Bank, NH Nonghyup Bank, savings banks, and insurance companies." The official explained, "The purpose of these inspections is to check whether all financial institutions are thoroughly familiar with and applying the proper limits and eligibility requirements during the loan screening process."
Previously, on June 27, the financial authorities announced household debt management measures, which included limiting mortgage loans in the Seoul metropolitan area and other regulated regions to a maximum of 600 million won, and completely restricting mortgage loans for owners of multiple homes in the metropolitan area. These measures were implemented immediately on June 28, the day after the announcement.
As banks worked to update their systems to reflect these household debt management measures, some confusion arose when non-face-to-face applications for mortgage and unsecured loans were temporarily suspended on June 28.
The Financial Supervisory Service also plans to monitor whether the so-called "balloon effect" occurs, where blocked loan demand shifts to other products such as loans for the self-employed or to secondary financial institutions. Most banks are reportedly planning to resume non-face-to-face loan applications within this week.
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