▲ Hana Bank signage
South Korean banks are tightening credit loan regulations in response to a surge in "debt-financed investing"—a trend where individuals take out loans to invest in the stock market.
Financial institutions are rushing to implement countermeasures following concerns from financial authorities that excessive leveraged investing could increase stock market volatility and heighten financial risks for individual investors.
According to the financial sector on June 12, Hana Bank began restricting credit loan limits for high-income earners starting today.
The bank has decided to cap the maximum credit loan amount for new applicants at 100 million won, regardless of the borrower's annual income.
It is also strengthening measures to reduce unused limits when renewing overdraft accounts.
While Hana Bank previously reduced limits for unused accounts upon maturity, it had allowed some exceptions based on product characteristics.
The bank now plans to eliminate these exceptions and strictly enforce limit reductions according to its regulations.
"We will continue to monitor credit loan trends and consider further measures if necessary," a Hana Bank official stated.
Shinhan Bank also announced today that it will implement "preemptive credit loan management measures" starting June 15.
Shinhan Bank will restrict non-face-to-face credit loan applications if the daily total of in-person and online applications exceeds internal management thresholds.
Products designed to support financially vulnerable groups, such as microfinance loans and mutual growth refinancing loans, will be excluded from these application restrictions.
Furthermore, for household credit loans exceeding 30 million won, including overdraft accounts, the bank plans to reduce limits by up to 20% upon maturity renewal for accounts with a usage rate of less than 10% over the three months prior to maturity.
Shinhan Bank explained, "We have established these preemptive operational measures to stably manage household loans amid the recent rise in credit loans."
NongHyup Bank will reduce the preferential interest rates applied to mortgage and credit loans by 0.2 percentage points (p) and 0.1 percentage points (p), respectively, starting June 15.
As a result, the floor for loan interest rates is expected to rise.
KB Kookmin Bank will cap the maximum limit for new general credit loans at 100 million won and overdraft accounts at 50 million won, effective June 16.
These measures will remain in effect temporarily until further notice, and separate criteria may apply to certain products, such as microfinance and policy-based loans.
Previously, Woori Bank announced yesterday that it would suspend non-face-to-face credit loan refinancing applications and block all credit loan applications coming through loan comparison platforms such as Kakao Pay, Naver Pay, Finda, and Toss.
As some banks are set to strengthen credit loan management starting next week, there is a possibility that loan demand could surge as early as today.
These measures are based on discussions between the Financial Services Commission (FSC) and commercial banks regarding the rise in credit loans, and it is reported that other commercial banks are also considering the introduction of self-regulatory measures for credit loans.
The FSC previously stated at a joint household debt inspection meeting with related agencies that it would activate an emergency management system and conduct weekly intensive inspections of financial companies that fail to meet their targets, as household loans—led by credit loans—continue to expand.
(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.