Policy financing institutions and banks will provide a total of 94.6 trillion won in funding for small and medium-sized enterprises and others during the Lunar New Year holiday.
The Financial Services Commission noted on the 19th that the financial sector is preparing and planning to implement various measures to ensure that there are no inconveniences in the financial use of the public during the Lunar New Year holiday.
First, policy financing institutions will support a total of 15.2 trillion won in special loans and guarantees to small and medium-sized corporations to prepare for the expected increase in funding needs before and after the Lunar New Year holiday. The support period is from the day 30 days before the holiday, which is the 30th of last month, to 15 days after the holiday, which is February 14, and consultations for special funding support can be received at branches of the Industrial Bank of Korea, the Korea Development Bank, and the Korea Credit Guarantee Fund.
By institution, the Industrial Bank of Korea will provide a total of 1.3 trillion won (800 billion won newly and 500 billion won for extension) for working capital through branch consultations and reviews, and it will also offer interest rate reduction benefits of up to 0.6 percentage points.
The Korea Development Bank will lend up to 300 million won per corporation for working capital purposes, such as payments for raw materials, employee salaries, and bonuses. For transaction-based loans, interest rate reduction benefits will be provided within 0.3 percentage points, and a total of 9 trillion won (3.5 trillion won newly and 5.5 trillion won for extension) will be supplied.
The Korea Credit Guarantee Fund will supply a total of 4.9 trillion won (800 billion won newly and 4.1 trillion won for extension) in guarantees. It will simplify the review processes for existing special guarantees and preferred guarantee programs and provide preferential treatment regarding guarantee fees, guarantee ratios, and guarantee limits.
Banks including NongHyup, Shinhan, Woori, SC, Hana, KB, Citibank, Suhyup, iM, Busan, Gwangju, Jeju, Jeonbuk, and Gyeongnam plan to supply a total of 79.4 trillion won (32 trillion won newly and 47.4 trillion won for maturity extension) in loans for small businesses and small enterprises, reflecting transaction contributions and credit ratings around the Lunar New Year holiday.
The Korea Financial Services Agency will support a total of 5 billion won in special funds through merchants' associations to meet the purchasing needs of traditional market merchants ahead of the Lunar New Year. Traditional market merchants can use small loans up to 10 million won at an interest rate of up to 4.5% within a two-month period before the holiday (from Nov. 26, 2024, to Jan. 27, 2025) through the merchants' associations.
The card industry will pay merchants' funds up to seven days in advance to support small card-affiliated merchants facing financial difficulties. A total of 462,000 small merchants (annual sales of 500 million to 3 billion won) will receive card payments generated before the holiday period without a separate application.
During the Lunar New Year holiday from the 25th to the 30th, loans from banks, insurance, savings banks, and cards that mature will automatically be extended to the 31st of this month without arrears interest. If borrowers wish to repay their loans early, they can discuss this with the financial company and repay without early repayment fees on the 24th of this month.
Card payments that fall due during the Lunar New Year holiday will be automatically withdrawn from payment accounts on the 31st without arrears fees. If the due dates for automatic payments for insurance premiums, communication fees, and utility bills fall during the holiday, the withdrawal dates will also be postponed until after the holiday.
However, if there is a separate agreement with the customer, the withdrawal may occur on a different business day, so confirmation is necessary.
The Korea Housing Finance Corporation will pay out housing pensions in advance on the 24th to all clients for whom the payment date is during the Lunar New Year holiday. All financial companies will refund deposits maturing during the holiday, including interest for that period, on the 31st. Depending on the product, if customers make a request, payments can also be made on the 24th before the holiday.
If the payment date for stock sales falls during the Lunar New Year holiday, the payment will be postponed to between January 31 and February 3. If sales payment deadlines for bonds, gold, and emissions rights are on the same day as the trading day, the sales payment can be received on the 24th, the day before the holiday.
Financial authorities will also operate mobile and flexible branches to facilitate urgent financial transactions. Eleven banks will operate 11 mobile branches at highway rest areas to provide services such as deposits, withdrawals, and currency exchanges. Additionally, 10 flexible branches will be opened in major airports and areas densely populated with foreign workers to offer remittance and currency exchange services.
The financial sector will proactively inform customers of non-business days during the holiday period and changes in maturities to minimize inconveniences in financial transactions.
According to the Financial Services Commission, for customers who need substantial funds for transaction balance trades or lease deposits during the Lunar New Year holiday, it is essential to withdraw funds in advance or increase transfer limits to allow for transfers through internet banking on the same day.
Foreign remittances and international payments are also likely to face difficulties, so it's necessary to check in advance with transaction banks or adjust transaction dates with trading partners.
If you plan to receive redemption funds for funds or insurance payments before and after the holiday, there may be differences in payment schedules by product, so it is necessary to check with the selling company or verify the payment schedule through terms and conditions.
It is also necessary to be cautious about text scams impersonating public institutions related to holiday gift deliveries or traffic law violation fines during and after the Lunar New Year holiday. If there is suspicion of financial information being leaked due to malicious app installations, one can minimize damage by visiting the branches of their financial institution or calling the call center to request an all-purpose payment freeze on their account.
If information has been leaked, unauthorized loans may be executed unknowingly. To prevent this, customers can subscribe to the 'Guaranteed Transaction Block' service that has been in effect since August of last year. Those wishing to subscribe can visit the branches of their banks, savings banks, NongHyup, Suhyup, credit cooperatives, or agricultural cooperatives to apply.
The Financial Services Commission urged attention to prevent illegal private loan damages, as the demand for cash tends to increase during the holiday period.
The Financial Services Commission stated that even in cases where urgent cash for living expenses is needed, it is essential to be aware of how to prevent illegal private loan damages in advance to avoid high-interest loans and illegal collection. If individuals are already suffering from illegal collections or loans, they can report damages or seek advice on recovery methods through the Financial Supervisory Service's illegal private loan protection team or reporting center.
Financial authorities are maintaining a swift response system among themselves, the Financial Security Institute (Integrated Security Command Center), and financial companies to prepare for potential incidents during the Lunar New Year holiday period. Financial companies will closely examine their internal control status and action plans for various incidents to proactively prevent financial accidents.