South Korean banks slash credit loan limits to curb household debt

Toss Bank announced that, from June 18, its maximum credit‑loan limit will be cut from 300 million won to 100 million won, and its overdraft (minus‑account) limit reduced from 150 million won to 50 million won. The bank also tightened its reduction criteria, raising the minimum discount rate for low‑utilisation accounts from 20% to 30% and allowing a discount of up to 40%.

NH Agricultural Bank will cap new household credit‑loan amounts at 100 million won starting June 19, with overdraft limits set at the lower of 100 million won or half the borrower’s annual income. The move follows a broader industry push, with Kookmin, Shinhan, Hana, Woori, KEB Hana, Kakao and other banks also lowering credit‑loan and overdraft ceilings to restrain debt‑to‑investment activity. The coordinated tightening aligns with the Korean government's policy to stabilise household borrowing and maintain financial market stability.