The Ministry of the Interior and Safety, the Financial Services Commission, the Financial Supervisory Service, and the Korea Deposit Insurance Corporation (KDIC) will jointly begin special oversight, including restructuring of the Korean Federation of Community Credit Cooperatives (KFCC).
The Financial Services Commission said on the 18th that since December last year through June this year it has been running a special prudential management period to improve the Korean Federation of Community Credit Cooperatives (KFCC)'s management performance. The financial authorities and others will continuously check management conditions during this period, including arrears rates and deposits-liquidity, losses, and restructuring of insolvent cooperatives. They plan to assign prudential improvement targets by region and by cooperative and guide underperforming ones to meet management performance through on-site inspections, meetings with management, and obtaining letters of commitment.
The financial authorities and others also launched a special management task force (TF). The TF is composed of core personnel from four institutions: the Ministry of the Interior and Safety (MOIS)'s Regional Finance Support Division, the Financial Services Commission (FSC)'s mutual finance institutions team, the Financial Supervisory Service (FSS)'s Small and Medium Finance Supervision Department and Examination Department 2, and the KDIC's Financial Stability Office.
The Korean Federation of Community Credit Cooperatives (KFCC) merged 42 cooperatives from the July 2023 withdrawal incident through the end of last year. The financial authorities and others said they plan to use MOIS's prompt corrective actions and other active supervisory tools to restructure insolvent cooperatives more quickly.
MOIS and the financial authorities also decided to greatly expand joint examinations to strengthen prudential management and supervision. The number of cooperatives subject to examination will increase from 32 last year to 57 this year. During the special management period in the first half of this year alone, they plan to jointly examine 35 cooperatives.