As of Sept. 1, the deposit protection limit in the financial sector will be raised from 50 million won to 100 million won. This marks the first increase in the deposit protection limit in 24 years since 2001.
The deposit protection limit will also be raised to 100 million won for financial companies under the Korea Deposit Insurance Corporation (KDIC), including banks and savings banks, as well as the mutual finance sector.
In addition to general deposits, the deposit protection limit for retirement pensions (such as Individual Retirement Plans) and accident insurance payments, which are currently under separate protection limits, will also be raised to 100 million won.
A government official said, "We will strengthen the protection of deposit assets to enhance trust in the stability of the financial market," adding, "This will also alleviate the inconvenience of depositors who have been diversifying their deposits across multiple financial companies."
Protection for victims of anti-social illegal lending contracts will also be strengthened.
Starting from the 22nd, all principal and interest on anti-social lending contracts, including those involving sexual exploitation, human trafficking, bodily harm, assault, and exorbitant interest rates, will be declared null and void. Even if a lending contract does not qualify as anti-social, contracts made with illegal money lenders will all be rendered void, thus enhancing victim relief.
Sentences for illegal money lending practices, such as unregistered lending and violations of maximum interest rates, will also be significantly increased. The penalty for unregistered lending, which previously carried a maximum of 5 years in prison and a fine of 50 million won, will be raised to 10 years in prison and a fine of 500 million won. Similarly, penalties for violations of maximum interest rates will be increased from 3 years in prison and a fine of 30 million won to 5 years in prison and a fine of 200 million won.