It has been reported that the amount involved in the unfair loan incident committed by former and current executives of the state-run Industrial Bank of Korea far exceeds the initially reported 24 billion won.
According to the financial sector on the 7th, the Financial Supervisory Service (FSS) found multiple additional cases of unfair loans during an on-site inspection of the Industrial Bank of Korea and confirmed these facts. A senior FSS official noted, “We have identified additional unfair loans during the inspection process, and the total amount of the incident recorded so far exceeds twice the previous announcement,” adding, “The number of involved employees has also increased.”
Earlier, the Industrial Bank of Korea identified that it had approved more loans by inflating the collateral value related to real estate at branches and loan centers located in Gangdong and Seongbuk districts of Seoul during its internal audit, and reported this to the FSS. The FSS began its on-site inspection of the Industrial Bank of Korea on the 3rd of last month, originally intending to complete the inspection before the Lunar New Year holidays, but extended the inspection as additional unfair loans emerged.
The core of this incident is 'working loans.' Bank employees assisted real estate developers and brokers in securing working loans by issuing inflated appraisal reports and more loans than the value of the collateral. The borrower is a former employee of the Industrial Bank of Korea engaged in real estate development, who approached four branch managers and loan center heads with whom he started and received loans. The FSS is focusing on this matter after receiving reports that the borrower provided them with perks such as golf.
It is also reported that the FSS confirmed that some employees involved in the unfair loans have familial relationships with the borrowers.
The FSS is investigating allegations that some employees involved in the unfair loans received money or valuables. An FSS official said, “We are in the process of tracing the accounts of the employees involved in the unfair loans and related individuals,” explaining, “It is a time-consuming task, so the inspection is taking longer.”