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South Korea's financial watchdog to enhance supervision of credit unions


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South Korea's financial watchdog to enhance supervision of credit unions

South Korea's Financial Supervisory Service plans to enforce stricter supervision over the financial health of credit unions following a rise in sales of personal loans, Yonhap News Agency reported June 13.

From June 18, officials from the financial watchdog will visit the main office of credit unions to inspect their business practices, particularly in relation to personal loans.

In addition, credit unions will adopt a stricter lending calculation for home mortgages from July 23, in line with the government's efforts to curb household debt. The guideline, called the debt service ratio, uses a new system that measures all debt principal and interest payments as a proportion of annual income.

According to Financial Supervisory Service data, outstanding personal loans extended by credit unions rose 10.9% to 49 trillion won in the first four months of 2018, compared to a 0.2% rise in household loans.

As of June 12, US$1 was equivalent to 1,077.58 South Korean won.