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The Korea Herald
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THE INVESTOR
March 29, 2024

Finance

FSC toughens regulations on savings banks

  • PUBLISHED :November 29, 2016 - 16:59
  • UPDATED :November 29, 2016 - 16:59
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[THE INVESTOR] South Korea’s top financial regulator said on Nov. 29 it will strengthen regulations on the financial soundness of local savings banks.

Dozens of savings banks in the nation have enjoyed relatively lax rules on the pretext that they are going though restructuring. They have been allowed to categorize loans with a delinquency of less than two months as “normal” and those with a delinquency period of two to four months as “precautionary.”

The Financial Services Commission said it will put the related standards for savings banks on par with those for commercial banks.

Under the new regulations, only loans in arrears for less than one month will be regarded as normal and those with a delinquency period of one to three months will be classified as precautionary.

The financial regulator also plans to tighten the rules on the amount of mandatory loan-loss reserves for those lenders starting in 2018. It also added that it will revise the rules in the first half of next year.

(theinvestor@heraldcorp.com)

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