SK FSC and SK FSS announced that revisions to the Regulations on supervision of mutual financial business have been approved during SK FSC's 3rd regular meeting.
Follows SK FSS Nov. 2023 held press conference on banking issues, see #193117.
Aims to strengthen soundness management by improving loss absorption capacity of exposures related to construction, real estate industries in the mutual financial sector.
Revisions
Strengthen the mutual financial industry's required loan loss reserve ratio for construction, real estate industries to the level for project financing (PF) loans in savings banks, specialized credit finance businesses by increasing the ratio by 30%.
By classification for soundness, raise the ratio to 1.3 from 1 for normal, to 13 from 10 for cautionary, to 26 from 20 for fixed, to 71.5 from 55 for questionable recovery.
Effectiveness
The revised regulations will be implemented immediately upon promulgation, but the required loan loss reserve ratio will be increased by stages by 10% from Jun. 2024.
In Apr. 2024, SK FSC issued minutes for 3rd review meeting in 2024, see #209208.
