SEOUL (Reuters) – South Korea’s financial regulator said on Wednesday it would ease local currency lending rules on foreign bank branches, which would free up at least 12.2 trillion won ($9.29 billion) for lending.
The Financial Services Commission said in a statement it would exempt smaller players from a requirement to keep the loan-to-deposit ratio at or below 100% by raising the threshold for the requirement.
Foreign bank branches would also be allowed to classify short-term borrowings from their head offices as deposits for an amount of up to half their long-term borrowings, which are already counted as deposits, it said.
It said the eased rules would allow the lenders to provide at least 12.2 trillion won in fresh loans, adding the changes were being made to reflect changes in economic conditions since the rules were first introduced in 2010.
The regulations are applied to transactions in won currency and would be implemented as early as necessary procedures are completed in the current quarter, it said.($1 = 1,312.5800 won)
(Reporting by Choonsik Yoo; Editing by Jacqueline Wong)
