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On the first day of the new year, the streets of Myeongdong in Jung-gu, Seoul, are busy, and rental requests are posted in stores. As banks resume credit lending starting in the new year, the self-employed are expected to suffer financial strains. Reporter Kim Youngwoo [email protected]
Banks will resume credit lending starting in the new year, which had been suspended in accordance with the government’s policy of curbing home loans. Late last year, when complaints from ordinary people that they were suddenly caught on the ‘loan cliff’ followed, an analysis that financial supervisory authorities allowed the loan to resume. However, credit loans for high-income families are still controlled.
Suspension of processing Resumption of non-contact loans
According to the financial sector on the 1st, Kakao Bank, a bank specialized in the Internet, has again requested a negative bank loan, which was temporarily suspended from the 17th of last month, starting at 6 in the morning of the same day. A Kakao Bank official explained: “As a remote bank, it was a very difficult decision to stop opening Matong.” “Since the new year, we have resumed lending for the customer’s convenience.”
Shinhan Bank stopped accepting face-to-face loans such as ‘Convenient Office Worker Credit Loans’ since the middle of last month and, as of the 23rd, it stopped accepting all credit loans except low-income financial products. It is expected to operate normally from 4, the first business day of the new year. Kookmin Bank also manages loans from the 4th. Since last month 14, Kookmin Bank completely stopped loans of more than 100 million won, and since 22, it has put a “ super strong ” to block all credit loans that exceed 20 million won.
Some banks are recovering from measures that eliminated prime interest rates (discount interest on loans). If the prime interest rate is eliminated, the total amount of loans tends to be suppressed due to the effect of raising the interest rate. Starting on the 4th, Nonghyup Bank will increase the prime rate on a variable rate home loan from 1.0% to 1.4%. In terms of credit loans, the prime rate, which was reduced to 0 ~ 0.25%, has reverted to 0.8 ~ 1.2%.
The measure that temporarily strengthened the standard for the total debt principal repayment ratio (DSR) that has been applied to housing-related loans since November last year will be maintained. Nonghyup Bank was able to receive up to 100% of the DSR for each individual, but since early November last year, if the repayment of principal and interest on the family loan exceeds 80% of annual income, it has not made loans.
Other banks are also weighing up loan resumption dates. Woori Bank is planning to start selling the ‘WE EARN office worker loans’ remote product this month, which was discontinued in November last year. Hana Bank is also contemplating when to resume handling Hana OneQ credit loans.
Big loans are still limited
The reason the government has asked banks to commit money is because they believe that home loans raise real estate prices. Furthermore, banks Shinhan, Kookmin, Woori and Nonghyup, which introduced the ‘Basel III’ standard, a capital adequacy regulation, rapidly reduced the proportion of loans to households by the end of the year, causing ‘confusion in the loans’. A bank official explained: “The banks that introduced Basel III must comply with the regulatory level in December and June of each year.” “In January, the full loan amount was ‘reset’.” That is, there is room for loan.
The resumption of loans by the banks is due to “communion” with the financial authorities. Because of this, there are observations that the government’s position to restrict lending only has changed somewhat. It is known that sooner or later the financial authorities will propose new measures for loans to households. The proposal to relax the 2 trillion won limit in monthly balance increase granted to banks since October last year is reportedly widely discussed. Financial Supervisory Commissioner Yoon Seok-heon said: “At the end of last year, the financial supervisory authority announced a policy to continue to curb domestic loans, but it seems that the financial authorities have changed their position in the new year as side effect of clogging ordinary people’s money line. “
However, the government’s stance against high credit loans and high credit loans is expected to remain unchanged. Financial authorities are known to receive daily status reports on large credit loans that exceed 100 million won per bank. A financial sector official noted that “the government’s logic of lending to low creditors and not lending to high creditors is contrary to the fundamentals of finance.” “In the end, only bank insolvency can increase.”
Reporter Daehoon Kim / Jongseo Park [email protected]
