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THE INVESTOR

Economy

FSS monitors credit card loans

  • PUBLISHED :March 15, 2017 - 16:34
  • UPDATED :March 15, 2017 - 16:34
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[THE INVESTOR] South Korea’s state financial watchdog said on March 14 that it is looking into a recent surge in personal loans by some credit card firms.

The Financial Supervisory Service said the move is meant to check the exact reason for the credit loan growth and whether the loan procedures were appropriate. Two major card issuers -- Kookmin and Hana -- are the first targets of the inspection, with other firms expected to be affected as well.

“It’s intended to see whether their card loans were properly handled and if there are any problems in general,” said an FSS official.

The outstanding balance for credit card loans in the country totaled 26.4 trillion won (US$22.90 billion) at the end of 2016, up 11.9 percent from the previous year.

There have been growing worries about the rapid expansion of loans by nonbank lenders, as banks have tightened the screening of loan applicants, in the so-called balloon effect.

By Alex Lee and newswires (alexlee@heraldcorp.com)
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