Partial Amendment to Supervisory Regulations on Mutual Savings Banks Approved on the 5th
Weighting for Policy Financial Products in Loan Ratio Calculation Raised to 150%
The financial authorities have decided to provide incentives for policy-based financial products for low-income individuals and loans outside the Seoul metropolitan area offered by savings banks. When calculating the loan ratio within a savings bank's business area, policy financial products such as Sunshine Loan will be given a weighting of 150%, the same as private mid-interest rate loans.
Lee Eogwon, Chairman of the Financial Services Commission, is attending the Bank Presidents' Meeting held at the Bankers' Hall in Jung-gu, Seoul on the 29th, delivering opening remarks. 2025.09.29 Photo by Yoon Dongju
The Financial Services Commission announced on November 5 that it had approved a partial amendment to the “Supervisory Regulations on Mutual Savings Bank Business” containing these measures during its regular meeting.
The amendment aims to improve systems related to the “Plan to Enhance the Role of Savings Banks” announced on March 20, as well as to revise other regulations, and takes effect starting today.
First, in order to expand support for low-income individuals and small business owners, the financial authorities will apply a 150% weighting to policy financial products such as Sunshine Loan when calculating the loan ratio within a savings bank's business area. This is an increase from the previous 100%. For loans backed by credit guarantee securities for small and medium-sized enterprises provided by regional credit guarantee foundations, the weighting will also be raised from 130% to 150%.
Measures to prevent the concentration of loans in the Seoul metropolitan area will also be implemented in parallel.
For savings banks with multiple business areas, the weighting for loans in the Seoul metropolitan area will be set at 90%, while loans outside the metropolitan area will be weighted at 110% when calculating the loan ratio within the business area.
For small and medium-sized savings banks with assets of 1 trillion won or less, 50% of non-face-to-face personal credit loans made outside the business area will be excluded from the total loan amount when calculating the loan ratio within the business area. This is intended to strengthen the credit evaluation capabilities of small and medium-sized savings banks and encourage diversification of their loan portfolios.
The Financial Services Commission will also improve certain unreasonable asset soundness classification standards.
Even if a client holds loans classified as substandard or below, loans secured by deposits or installment savings, and loans guaranteed by financial institutions-where principal and interest repayment is assured-will be allowed to be classified as normal within the total loans.
To more precisely manage the soundness of real estate project financing (PF) loans, the “business feasibility evaluation criteria” will be revised in the supervisory regulations for savings banks, subdividing the business feasibility evaluation from the current three stages to four stages.
In addition, the Financial Services Commission will implement a revised enforcement rule for the supervision of mutual savings banks, which requires that 10% of private mid-interest rate loans be excluded when calculating the loan-to-deposit ratio.
The revised standards for savings bank mergers and acquisitions (M&A) will also take effect starting today.
The amendment to the Enforcement Decree of the Mutual Savings Bank Act, which will exclude financial holding companies from the regular major shareholder eligibility review, is planned to be completed within this year.
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