Financial Supervisory Service confirms plan to improve vulnerable lending process with banks

In the wake of a series of major credit accidents in the banking sector, the Financial Supervisory Service said it has collected opinions from the banking sector and confirmed ways to improve the vulnerable credit process and follow-up management measures.

The self-regulation bill of the Korea Federation of Banks, prepared by financial authorities and banks, included measures to strengthen the self-verification process, such as checking various documents submitted by customers through issuers.

In addition, in principle, the customer's income, employment, and business operation will be collected in electronic form.

The process of calculating and verifying the collateral value was also improved, and the principle of random designation was stipulated by a computer system when requesting external appraisal.

The Financial Supervisory Service said the improvement of the credit process will prevent the recurrence of large credit accidents and help restore confidence in the banking sector.