KakaoBank Reduces Overdraft Limits Amid Loan Tightening by Internet Banks

Financial authorities are tightening credit loan regulations as three internet banks, following traditional banks, raise their lending thresholds. This move comes in response to a surge in borrowing for investment, known as 'debt investment,' amid a booming stock market.

According to the financial sector on June 16, KakaoBank will reduce its overdraft loan limit from 240 million won to 100 million won starting June 22. Additionally, from July, when extending overdraft loans with a limit of over 50 million won, borrowers who have used less than 20% of their limit in the past six months will see their limits cut by up to 20%.

Toss Bank is also significantly lowering its credit and overdraft loan limits. The maximum limit for credit loans will decrease from 300 million won to 100 million won, while the overdraft limit will be reduced from 150 million won to 50 million won. The specific implementation date is still under internal review.

K Bank has announced even stricter measures. It will temporarily suspend new overdraft account sales from today until July 31. Furthermore, it plans to reduce the credit loan limits for high-income earners.

These actions are seen as a proactive response to anticipated directives from financial authorities to strengthen credit loan management at internet banks, similar to measures taken with traditional banks. An official from one internet bank stated, "We plan to maintain strict household loan management while ensuring that funding is directed toward genuine demand. We will actively cooperate with the financial authorities' household loan management policies."