Banks vow to help after new trade restrictionsMajor commercial banks have introduced programs to help small and mid-sized companies that could be affected by Japan’s removal of Korea from a so-called white list of countries that enjoy relaxed export procedures.
Japan’s cabinet on Friday approved the delisting plan, which will be implemented on Aug. 28.
The finance industry over the weekend announced some relief for domestic companies whose businesses could be affected, including lower interest rates on loans and extended repayment periods.
KB Kookmin Bank on Sunday said it is offering a special financial program starting Monday. The program includes extending loan repayment periods for companies facing maturity dates soon. Companies with loans will be given a postponed maturity date for paying back the principal. Some companies will be offered a 2 percent prime lending rate.
The bank is also offering preferential exchange rates to import and export companies and discounts on foreign exchange commissions. Companies with low liquidity can enjoy the bank’s help through a program that helps them raise credit.
“We will actively offer support to help minimize the damages suffered by domestic companies through the operation of the financial support program,” said a spokesperson for KB Kookmin Bank. “We plan to come up with further measures for the companies hit by Japan’s regulations on exports to help resolve any financial difficulties.”
Shinhan Bank on Sunday said it will spend up to 1 trillion won ($89,700) on the companies affected by Japan’s economic retaliations and also open a center for consulting services for them. The bank is also launching a team that specializes in loans to companies that manufacture components and materials that are usually imported to bolster Korea’s competitiveness in manufacturing.
An individual company can borrow up to 1 billion won from Shinhan Bank.
“We plan to provide funds to the related companies to help minimize the damages,” said a spokesperson for Shinhan Bank.
Woori Bank plans to spend 3 trillion won as part of its support fund.
The bank will spend 1 trillion won to help companies engaged in semiconductor and display manufacturing. By next year, the bank will spend 1.5 trillion won on extending credit to companies.
“We are also reviewing measures to make direct investments in companies with excellence in technologies,” said a spokesperson for Woori Bank.
BY JIN MIN-JI [email@example.com]