South Korean banks cap credit loan limits as debt‑investment surge pressures lenders

KB Kookmin Bank announced that from June 16 it will limit the maximum amount for new unsecured credit loans to 100 million won and the ceiling for overdraft (minus‑account) facilities to 50 million won. The move is part of a broader effort by major Korean lenders to rein in rapidly expanding household debt.

Data from the Financial Supervisory Service show that the five largest banks’ total credit‑loan balances rose by about 1.6 trillion won in just ten days, driven largely by a surge in “debt‑investment” activity where borrowers channel loan funds into the stock market. Correspondingly, credit‑loan interest rates have climbed, with the upper end now exceeding 6 %, while mortgage‑loan rates have crossed the 7 % mark.

In response, banks are tightening loan‑product terms: reducing overdraft limits, cutting preferential rates on credit products, restricting non‑face‑to‑face loan applications, and limiting the use of fintech platforms for new credit‑loan inflows. These autonomous measures aim to manage risk and keep household borrowing within sustainable levels.