About 87.19 billion won of the Bank of Korea's funds supplied last year to commercial and regional banks under its lending support program for financial intermediaries to provide low-interest financing to small and midsize businesses was disbursed in violation of the rules. It was the largest amount in six years. By bank, the amount wrongly paid to Busan Bank was the highest at 26.84 billion won.
The lending support program for financial intermediaries is a system under which the Bank of Korea supplies funds to banks at an annual interest rate in the 1% range, and banks use those funds for loans to small and midsize businesses. When a bank first extends a loan to an SME, the Bank of Korea (BOK) later supports the corresponding funds. The Bank of Korea (BOK) is currently providing a total of 30 trillion won in lending support for financial intermediaries, with differentiated allocations by bank.
According to data submitted by Democratic Party of Korea lawmaker Oh Ki-hyeong, a member of the National Assembly's Strategy and Finance Committee, on the 13th, the amount paid in violation of the rules under the lending support program for financial intermediaries last year averaged 87.19 billion won per day (based on average balance).
By year, the amounts in violation were ▲ 17.59 billion won in 2020 ▲ 41.5 billion won in 2021 ▲ 24.88 billion won in 2022 ▲ 26.53 billion won in 2023 ▲ 73.08 billion won in 2024. The figure increased fivefold in six years. The total mainly included funds extended to ineligible industries such as real estate or leasing, or to mid-sized and large corporations.
By bank, Busan Bank (26.84 billion won) was the highest, followed by ▲ Industrial Bank of Korea (IBK) 11.25 billion won ▲ KB Kookmin Bank 11.24 billion won ▲ Shinhan Bank 10.63 billion won ▲ NongHyup Bank 10 billion won ▲ Hana Bank 8.17 billion won.
Busan Bank ran into trouble for failing to meet the required ratio of loans to small and midsize businesses. Commercial and regional banks receiving lending support for financial intermediaries must allocate at least 50% of the increase in their total won-denominated credit to SME loans. The Bank of Korea (BOK) reviews this ratio monthly based on data submitted by banks, raising the support limit for banks that meet the standard and lowering it for those that fall short.
Busan Bank had consistently met the ratio, and its lending support limit for financial intermediaries had increased compared with previous years. However, a recent joint examination by the Bank of Korea (BOK) and the Financial Supervisory Service found that Busan Bank failed to meet the standard for a certain period. A Bank of Korea (BOK) official said, "We plan to deduct the amount overpaid to the bank from its lending support limit for financial intermediaries over the next several years."