(Photo= Yonhap news)

 

[Alpha Biz= Reporter Kim Sangjin] In the face of sustained growth in household loans, Financial Supervisory Service (FSS) Governor Lee Bok-Hyeon has directed on-site inspections of the household loan processes at banks and demanded stringent measures against improper loans.

At an executive meeting held on the 13th, Governor Lee emphasized the need to focus supervisory capabilities on managing household loans and ensuring the smooth landing of real estate project financing (PF) in the second half of the year to support the government's commitment to stabilizing the housing market.

Governor Lee instructed that the implementation of the second-stage stress total debt service ratio (DSR) and the calculation of management-purpose DSR should proceed without disruption. He also highlighted the need to advance macroprudential regulation enhancement measures in collaboration with relevant authorities. Specifically, he ordered that on-site inspections of bank household loan processes be conducted to assess the DSR evaluation practices and the appropriateness of household loan risk management. He further directed that improper loans be dealt with severely through joint investigations with related departments.

According to the Financial Services Commission's report on household loan trends for July, household loans across all financial sectors increased by 5.3 trillion won from the previous month, marking a fourth consecutive month of growth. Notably, the increase in bank mortgage loans, amounting to 5.6 trillion won, has been leading the rise in household debt.

Governor Lee also stressed the importance of timely restructuring of distressed PF projects. He stated that the normalization of real estate development projects is essential for housing supply activation and urged that the restructuring and reorganization plans for distressed projects be implemented with urgency. He instructed that the second business viability assessment, scheduled for next month, be conducted rigorously.

 

 

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