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South Korea implements tight home loan rules for all mutual savings institutions

South Korea's Financial Services Commission decided to require all mutual savings institutions to meet tighter mortgage lending rules, effective June 1, as part of its efforts to curtail growth in household debt, The Korea Herald reported May 30.

Under the rules, borrowers are required to repay both interest and a part of principal on home loans until maturity. The FSC had applied the rules to mutual savings institutions and credit unions with assets of more than 100 billion South Korean won in March.

Effective June 1, the rules will be applied to a total of 1,925 mutual savings institutions and credit units with assets of less than 100 billion won, the regulator said. The rules had already been implemented for retail banks and other depository institutions.

As of May 30, US$1 was equivalent to 1,125.01 South Korean won.