Starting this month, large savings banks will provide incentives for loans to small and medium-sized enterprises and individuals outside the capital region. This measure aims to alleviate the concentration of savings bank loans in the capital region and enhance the role of regional fund supply.
According to the financial sector on the 5th, the Financial Services Commission recently approved a partial amendment to the Mutual Savings Bank Business Supervisory Regulations containing such content.
The amendment states that when calculating the loan ratios of savings banks, a weight of 90% will be assigned to loans in the capital region and 110% to loans outside the capital region. Thirteen savings banks that operate in both the capital and non-capital regions are affected. This measure aims to alleviate the concentration of savings bank loans in the capital region.
Savings banks must handle 50% of total loans in the capital region and 40% in the non-capital region, targeting individuals and small and medium-sized enterprises within their operating areas. Once the amendment is implemented, the 13 savings banks will be recognized as having loaned 900,000 won in the capital region and 1.1 million won in the non-capital region when 1 million won is lent. Raising the weights will be advantageous for meeting the loan ratio within their operating area.
According to financial authorities, the current share of the non-capital region in the domestic economy is 47.7%. However, the loan ratio of savings banks in the non-capital region is only 34.3%. In particular, among the 13 savings banks that include both the capital and non-capital regions, 75.6% of loans are concentrated in the capital region.
To address this issue, incentives will be provided for loans in the non-capital region to strengthen the regional fund supply role of savings banks.
The financial authorities have also granted a one-year grace period for the expansion of loan supply in the non-capital region to allow savings banks to adapt to the system. According to the impact analysis by the financial authorities, 11 of the 13 savings banks can comply with the regulatory ratios even without the grace period, and the remaining 2 are assessed to be able to comply sufficiently within the grace period.