Commenting on additional measures to address household debts to be announced after the Chuseok (Korean thanksgiving) holiday, Financial Services Commission Chairman Koh Seung-beom said, “We are looking into 20 to 30 subitems.” With maturing debts to small businesses and self-employed that have suffered damage from the spread of COVID-19 effectively set to be rolled over once again, the financial agency will announce a specific plan next week.
“All agreed that management of household debts should be toughened,” Chairman Koh told reporters right after his first meeting with leaders of Korea’s top five financial groups, namely KB, Shinhan, Hana, Woori and NH NongHyup, at the Korean Federation of Banks building in central Seoul.
“We will come up with additional supplementary measures after checking situation after the Chuseok holiday,” Koh said. “We are closely analyzing 20 to 30 subitems at the practical level.” Analysts say that the commission will include in the plan comprehensive measures including advancing the timing for application of the 40 percent cap in debt service ratio (DSR) to individuals and strengthening DSR regulations applied to secondary financial institutions.”
On measures to regulate loans for jeonse (lump-sum key deposit) rental homes, however, Koh said, “Nothing has been decided and we will try and ensure that actual tenants will not suffer damage.”
While maturing debts to small businesses and self-employed will be highly likely rolled over for the third time as part of measures to support them, some watchers suggest the possibility that the temporary waiver of interest payment will be partially discontinued.