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Savings banks urged to curb high-interest loans

All Headlines 15:50 April 16, 2018

SEOUL, April 16 (Yonhap) -- The head of the Financial Supervisory Service (FSS) on Monday called for savings banks to curb high-interest loans, criticizing them for taking a bigger bite out of people with poor credit ratings.

Gov. Kim Ki-sik made the remarks at a meeting with chief executives of savings banks as he is facing growing calls to step down over revelations that three overseas trips he made as a lawmaker between 2014 and 2015 were funded by financial and research institutions under the oversight of a National Assembly committee, where he was a member.

The government lowered the maximum legal lending rate to 24 percent per annum in March, and some savings banks have charged an about 20 percent rate.

Kim accused some savings banks of charging higher interest rates that are comparable to private lending firms although savings banks can raise funds at lower borrowing costs.

Savings banks' average loan-deposit margin is about 8 percent, compared with a some 2 percent margin by retail banks, Kim said.

The Monday meeting with heads of savings banks was Kim's third public activity since revelations about his overseas trips were reported.

Last week, President Moon Jae-in said he will sack Kim if his controversial overseas trips are found to have been illegal or substantially below ethical standards.

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