Commercial, state-run banks sign $4.6 billion repo to save credit union

A notice assuring the safety of deposit and installment savings is posted at a Korean Federation of Community Credit Cooperatives branch in Jongno District, central Seoul, on Thursday. [NEWS1]

Commercial and state-run banks signed a more than a six trillion won ($4.6 billion) worth of repurchase agreement with the troubled Korean Federation of Community Credit Cooperatives (KFCC) to provide liquidity amid its soaring delinquency rate.

Five state-run banks — KB Kookmin, Shinhan, Hana, Woori, NongHyup — and the state-run Korea Development Bank and the Industrial Bank of Korea signed the agreement following the government request last week to cooperate in providing liquidity to the KFCC, according to a Yonhap report Monday.

Repurchase facilities allow for raising cash in exchange for collateral.

The commercial banks were each asked to prepare 1 trillion won of financing, Reuters reported Monday.

BY JIN MIN-JI [jin. minji@joongang.co.kr]