Bad Credit Record Holders to Be Reduced

The government is discussing the measure that tighten the requisite for listing a person on the black list in order to reduce rising number of bad credit record holders. Hence, the requisite for listing bad credit card users is likely to rise to 200,000 won from 50,000 won in delayed payment, and to some 100,000 won from 1 won in the loan from bank.

The government held Deputy Finance Minister Yoon Jin-Sik presiding Financial Policy Coordination Meeting, where Yoo Ji-chang, vice chairman of the Financial Supervisory Commission (FSC) and Deputy Band of Korea (BOK) Gov. Park Chul were present, and decided and announced `measure for increasing individual debt`.

Deputy Minister Yoon said, "the government will raise the ratio of allowance for bad debts for individual loan and credit card service in order to prevent banks and credit card companies from becoming insolvent due to the increasing insolvency of individual loans. And the government will impose harsh punishments like operating license suspension on credit card companies issuing credit cards violating regulations." And it decided to guide the credit card companies to decrease the ratio of cash service to 50 percent level to make them sound.

Deputy Minister Yoon said, "bad credit recorder holders number 2.45 million persons and those who are under adult age among them number 12,000 persons, which increased by 4 times during last 1 year. The government will enforce the measure to tighten the requisite for marking bad credit record as soon as the Federation of Bank prepares it."

Chan-Sun Hong hcs@donga.com · Byong-Ki Lee eye@donga.com