[Photo by Yonhap]
South Korean financial holding companies are expected to share win-win measures during a meeting with the financial authority, which will focus on increasing the scale of financial support for low-income and vulnerable groups and expanding the target group.
According to multiple sources from the financial industry on Sunday, Financial Services Commission (FSC) Chairman Kim Joo-hyun and Financial Supervisory Service (FSS) Governor Lee Bok-hyun will meet with the chiefs of the country’s five major financial holding companies (KB, Shinhan, Hana, Woori, NH Nonghyup), and three regional financial holding companies (BNK, DGB, and JB) on Monday.
The attendees are expected to discuss the expansion of the role of financial holding companies in small-loan finance.
The financial holding companies have been under scrutiny for achieving profits easily through interest margins amid the high interest rate environment.
President Yoon Suk Yeol had criticized earlier that “small and medium-sized enterprises and self-employed people are becoming servants of banks.”
The financial institutions are expected to show their commitment to social responsibility during the meeting on Monday.
Proposals are likely to include expanding support for the vulnerable group, such as by lowering interest rates on loans for financial products and expanding interest exemptions for borrowers who are unable to repay their loans.
They are also likely to involve a plan to further expand low-interest microloans by utilizing funds from the banking sector’s social contribution projects.
The financial institutions may also raise the idea of increasing the supply of key policy financial products with high demand.
Discussions may also include a plan of providing additional incentives to financial holding companies that excel in win-win financing to encourage them to continue to come up with additional win-win proposals.
Earlier, Hana Bank and Shinhan Bank announced win-win financing plans worth 100 billion won ($77.4 million) and 105 billion won, respectively, but the authorities have signaled that they are “not enough.”
KB, Woori, NH Nonghyup financial groups have not yet addressed details on win-win financing plans.
By Chae Jong-won, Park In-hye, and Yoon Yeon-hae
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