FSC tightens lending standards at banksThe Financial Services Commission has revised the way lenders review the income of borrowers as part of efforts to curb household debt and prevent potential defaults.
The regulator will require banks to ask for income records from the past two year, up from the current standard of one year. The change is aimed at proving the stability of borrower’s income.
When assessing borrowers’ indebtedness, financial institutions will also need to count the principal of borrowers’ existing mortgages instead of considering only interest.
By Park Eun-jee