Special Management Task Force and Joint Conference Calls in Operation
Accelerating the Restructuring of Insolvent Branches
The government and financial authorities are operating a special management period to enhance the soundness of Saemaul Geumgo. In particular, the Ministry of the Interior and Safety has launched a joint special management task force with financial authorities to further strengthen the management and supervision of Saemaul Geumgo.
On January 18, the Ministry of the Interior and Safety, the Financial Services Commission, the Financial Supervisory Service, and the Korea Deposit Insurance Corporation announced that, through the operation of the special management period and the reinforcement of their cooperative system, they will significantly improve the soundness of Saemaul Geumgo to ensure it does not become a destabilizing factor in the financial market.
The relevant agencies have been operating the special management period for Saemaul Geumgo's soundness since last month and will continue until June. During this period, they will continuously monitor delinquency rates, deposits and liquidity, losses, and restructuring of insolvent branches. They will also set soundness improvement targets for each region and branch. For underperforming branches, they are providing intensive guidance through on-site inspections, executive interviews, and the collection of written commitments to ensure management performance targets are met.
The Ministry of the Interior and Safety has especially activated the 'Joint Special Management Task Force' to ensure a more seamless cooperation system for soundness management and supervision with financial authorities. The task force consists of key personnel from the following supervisory departments: the Regional Financial Support Division of the Ministry of the Interior and Safety, the Mutual Finance Team of the Financial Services Commission, the Small and Medium Finance Supervision Bureau and the Inspection Bureau 2 of the Financial Supervisory Service, and the Financial Stability Office of the Korea Deposit Insurance Corporation. The task force discusses all aspects of soundness management and supervision through conference calls based on daily, weekly, monthly, and semiannual aggregated data, including ongoing monitoring of management indicators, information sharing, joint inspections, and institutional improvements.
Since the withdrawal incident in 2023, Saemaul Geumgo has merged a total of 42 branches up to the end of last year. The Ministry of the Interior and Safety plans to utilize its supervisory authority more proactively, including timely corrective measures, to restructure insolvent branches more swiftly going forward.
In addition, the Ministry of the Interior and Safety and financial authorities plan to significantly expand joint inspections in 2026. Based on an increase in personnel at the Financial Supervisory Service and the Korea Deposit Insurance Corporation, the number of branches subject to inspection will be increased from 32 last year to 57 this year. During the special management period in the first half of the year, joint inspections will be conducted on more than twice as many branches as before.
The relevant agencies are also pursuing necessary institutional improvements to help Saemaul Geumgo restore its identity as a provider of regional and community finance. The Ministry of the Interior and Safety and Saemaul Geumgo will steadily implement follow-up measures for the mutual finance sector institutional improvement plan established at the Mutual Finance Policy Council at the end of last year. The financial authorities will actively support necessary institutional changes by listening to on-site feedback from branches regarding delinquency rate management and the restructuring process.
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