No Overseas Emigration without Repaying Bank Loan

Those planning to emigrate overseas will soon find themselves having difficulty in obtaining loans.

In addition, it will be practically impossible to avoid receiving demand notes by changing one’s residence registration number after getting the loans.

The South Korean government is preparing these measures regarding the credit management of financial institutions, according to the Regulatory Reform Taskforce (RRT) and the Financial Supervisory Service (FSS) on May 17.

The goal is to prevent cases in which borrowers migrate to foreign countries without repaying their loans.

The government’s plan is to first come up with measures to allow financial institutions to receive consent from applicants who ask for more than a certain amount so that they can later be notified of the borrower’s migration. Then, the government will make the Ministry of Foreign Affairs and Trade check out the information, based on the consent.

“Basically, an individual’s emigration-related report is not allowed to be opened, but with the public interest and the individual’s consent, the information can be offered to the concerned financial institutions,” said s source from the ministry.

The FFS expects a similar regulation on the credit card issuance when the loans for likely migrants become stringent.

The Board of Audit Inspection estimated that during the period between 1999 to last February, 12,861 migrants left their mother country without repaying the debt totaling 1,368.5 billion won. Among them, 471 who headed to Canada in the name of the investment-linked migration left a debt of 134.2 billion won behind, although each had fortunes of more than 100 million won. This meant that each didn’t repay more than 280 million won.

Also, as a way to prevent borrower’s “identification laundry” through changing one’s residence registration number, the government plans to allow the concerned financial institution to check out the loan applicant’s abstract of the residence registration certificate searched by the previous residence registration number.

The measures will take into effect starting July 1, after the Enforcement Decree of the Resident Registration Act is amended.

“The abstract of the residence registration certificate searched by the previous residence registration number will be offered to the financial institutions when they submit a request along with proper documents, including its corporate seal impression and owner`s seal impression,” said an official from the Ministry of Government Administration and Home Affairs. “Since the certificate carries the loan delinquent’s address, it will be helpful for demanding the repayment,” added the official.

Ki-Jeong Ko koh@donga.com