South Korea's public financial service firms will aggressively write off nonperforming loans extended to low-income people in a bid to facilitate their debt rescheduling, a public agency said Monday.
The decision came at a meeting of the nation's regulators and the heads of such organizations as Korea Housing Finance Corp. and Korea Asset Management Corp.
KHFC, KAMCO and four other public financial companies had 24.9 trillion won (US$21.5 billion) in bad debts held by around 718,000 individuals as of the end of last year.
Banks usually write off the debts of individuals who are delinquent for about a year. But public firms tend to possess such loans for 3-10 years, making it hard to reschedule debt for people who regularly struggle to pay back their dues.
"Nonperforming loans should be handled swiftly, rather than being held for a long time," the FSC's Vice Chairman Jeong Eun-bo said during the meeting.
He stressed that public firms need to write off bad debts in a "bold" manner to raise the effectiveness of their asset management. (Yonhap)