Deposit Protection Limit Raised: Full Commitment to Consumer Protection
Calls for Stronger Security and Internal Controls Against Voice Phishing
Emphasis on Soundness Through Loan Loss Reserves and Capital Expansion
On September 4, Lee Chanjin, Governor of the Financial Supervisory Service, held his first meeting with savings bank CEOs and urged them to prioritize the protection of financial consumers. He emphasized the need to avoid high-risk lending practices that are tied to the real estate market and to strengthen operations focused on ordinary citizens and small and medium-sized enterprises.
Lee Chanjin, Governor of the Financial Supervisory Service, is delivering opening remarks at the "Financial Supervisory Service Governor-Insurance Company CEO Meeting" held at the Life Insurance Education and Culture Center in Jongno-gu, Seoul on September 1, 2025. Photo by Kang Jinhyung
At the Savings Bank Federation of Korea in Mapo-gu, Seoul, Lee met with Oh Hwakyung, Chairman of the Savings Bank Federation, and the CEOs of 11 savings banks. He stated, "Since the main customers of savings banks are ordinary citizens and small and medium-sized businesses, the importance of protecting financial consumers is even greater," and added, "From product design and sales to internal controls and risk management, please make consumer protection the top priority in all work."
Lee outlined four key areas: establishing a management system centered on financial consumer protection; strengthening internal controls to prevent financial crimes and accidents; enhancing local community finance and seeking sustainable growth strategies; and continuously managing soundness, including the resolution of remaining non-performing assets.
He also stressed that, with the recent increase in the deposit protection limit from 50 million won to 100 million won, financial consumer protection must become a primary management objective. Lee pointed out that savings bank customers are not fully utilizing beneficial systems such as the right to request debt adjustment and the right to request interest rate reductions. He urged, "Please actively inform ordinary citizens and small business owners about these systems so that consumers can exercise their rights and receive benefits."
He called for stronger security infrastructure and internal controls to prevent financial accidents such as voice phishing and illegal account openings. He emphasized that management should pay special attention to the adoption of facial recognition systems and secure blocking services to prevent non-face-to-face financial accidents.
He stated, "A significant portion of savings bank customers are financially vulnerable and are more easily exposed to financial crimes such as voice phishing, illegal account openings, and illegal private loans." He added, "Especially with the deposit protection limit raised this month and as savings bank transaction volumes increase, please keep in mind that customer losses could become larger in the event of a financial accident."
He also stressed the need to improve soundness so that savings banks can fulfill their fundamental role, such as alleviating the financial burden on small merchants and ordinary citizens. He diagnosed that savings banks have focused on quantitative growth and short-term profits by mainly engaging in high-risk real estate loans such as project financing, which has led to a deterioration in soundness.
Lee emphasized, "Going forward, please refrain from high-risk lending practices tied to the real estate market and focus on providing funds to local residents, individuals with mid- to low-credit ratings, and small business owners. With a longer-term perspective, consider strategies to strengthen your business foundation by improving credit evaluation capabilities and infrastructure, expanding non-face-to-face operations, and increasing local collaboration."
He requested that, in the second half of the year, savings banks secure soundness by cleaning up non-performing project financing assets, accumulating sufficient loan loss provisions, and expanding capital. Lee added, "Once concerns about soundness are resolved, discussions on easing business area restrictions and relaxing regulations on mergers and acquisitions will also gain momentum."
The CEOs of the savings banks stated that they would contribute to revitalizing productive finance in local communities by selecting and supporting promising small and medium-sized businesses and self-employed individuals. They also explained their management challenges, such as intensified non-face-to-face competition and weakened new growth engines, and requested policy support. In response, Lee said, "We will thoroughly review the industry's opinions, reflect them in supervisory and inspection work, and continue to maintain open communication."
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