South Korea Extends Mandatory Lending Ratio Exemption for Savings Banks Until End-2026

According to the Financial Supervisory Service on July 6, South Korea's financial authorities extended the mandatory lending ratio regulation exemption for savings banks through December 31, 2026. Savings banks facing asset losses from Project Financing (PF) distressed loan write-offs and disposals may violate the requirement by up to 5 percentage points without administrative penalties. The exemption, first introduced in May 2024 for six months, has been repeatedly extended as banks prioritize non-performing loan recovery and soundness improvements over meeting regional lending targets.
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