More regional banks overcharged borrowers

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More regional banks overcharged borrowers

More banks said that they overcharged borrowers Wednesday, as the country’s financial watchdog zeroes in on lending fraud following the revelation of more than 10,000 such cases at major banks last month.

Three regional banks — Jeju Bank, Kwangju Bank and Jeonbuk Bank — launched internal probes that found a total of 292 cases where borrowers were charged higher interest rates than they should have been.

The Financial Supervisory Service (FSS) said that it will launch an investigation into the three banks.

“We will start investigating next month, though the schedule is subject to change,” said a spokesperson at the FSS.

The three banks charged 24.2 million won ($28,305) in total than they should have. Kwangju Bank accounted for the highest share, at 13.7 million won from 230 cases.

Jeju Bank overcharged clients by 9 million won over 49 cases while Jeonbuk collected 1.5 million won from 13 loans.

All three banks promised to return the money that borrowers were unfairly charged.

An investigation by the watchdog for Suhyup Bank and Daegu Bank is currently underway.

Suhyup reported two cases of overcharging worth 500,000 won. Daegu Bank said it didn’t overcharge any of its clients. The series of findings came after the FSS determined that other banks were overcharging clients on a much larger scale.

The FSS carried out an investigation into nine banks in January and February and uncovered a total of 12,279 cases of interest manipulation that left clients with more than 2.6 billion won.

Three of the nine banks - Kyongnam Bank, KEB Hana Bank and Citibank -were found to have manipulated rates.

Kyongnam Bank, a unit of BNK Busan Bank based in South Gyeongsang, had the largest number of cases, at 12,000. This prompted the regulator to inspect other banks headquartered outside of Seoul.

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