Government increases inspections to 57 institutions from 32, focusing on delinquency and real estate loans
The Ministry of the Interior and Safety announced on the 8th that it will conduct a joint inspection with the Korea Deposit Insurance Corporation and the Financial Supervisory Service targeting the Korean Federation of Community Credit Cooperatives.
The inspection targets 57 institutions selected based on criteria such as delinquency rates, the proportion of loans to real estate and construction businesses, potential insolvency risks, and the urgency of inspection. This marks a significant increase compared to last year, 32 institutions, with the government planning to conduct inspections on 35 institutions during the first half of the year.
For the targeted institutions, the delinquency rate, losses, and liquidity management situations will be reviewed to guide improvements in their business performance.
Inspections will also assess internal controls, including intentional preferential loans and other non-performing loans, as well as workplace bullying and sexual misconduct.
To strengthen household loan management, the actual status of household loan handling will be thoroughly reviewed, and strict measures will be taken against executives and employees of institutions that violate government policies and internal regulations.
To strengthen disciplinary actions, starting this year, disciplinary measures will be imposed regardless of whether losses or accidents have occurred if intentional or gross negligence by employees is confirmed.
If the Korean Federation of Community Credit Cooperatives, which has received corrective instructions, fails to implement them for more than six months, the Korean Federation of Community Credit Cooperatives will conduct a separate inspection, and if intentional non-compliance is confirmed, strict measures will be taken against the relevant executives and employees.
For institutions under the Korean Federation of Community Credit Cooperatives that have acquired insolvent institutions, the Korea Deposit Insurance Corporation and the central association of the Korean Federation of Community Credit Cooperatives will jointly support investigations into the causes of insolvency and provide management consulting to normalize operations.
Minister of the Interior and Safety Yun Ho-jung stated, “In line with the government’s policy to stabilize the real estate market, we will strengthen the management of household loans by the Korean Federation of Community Credit Cooperatives,” adding, “We will ensure that the Korean Federation of Community Credit Cooperatives establishes itself as a local financial institution serving the public as intended.”
