FSS discovers 616 suspicious transactions out of 16,400 sample checks, ‘As a result of the financial authorities’ inspection of real estate secured loans in the banking sector, 124 cases of excessive loans were exposed. Cases where internal controls such as separating loan handling and appraisal work were not observed were also confirmed in large numbers.’,
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, ‘The Financial Supervisory Service (FSS) announced today (24th) that 616 suspicious transactions were found in all 16,400 real estate secured loan sample checks conducted by banks. There were 124 cases of excessive loans compared to collateral value and 492 cases of internal rule violations about loan handling.’,
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, ‘Following a series of embezzlement cases involving inflating real estate collateral values at KB Kookmin Bank and NH Nonghyup Bank in the first half of this year, the FSS instructed the banking sector to inspect cases of ‘inflating collateral values’ in commercial real estate and land collateral loans.’,
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, ‘Based on the reported cases, the FSS shared five types of transactions in which excess loans are suspected in the banking sector. These include cases where the transaction price or pre-sale price is set more than twice as high as the actual transaction price (inflating transaction price/sale price) and cases where excessive rent is calculated in family-related contracts compared to the appropriate level (inflating rent).’,
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, ‘The banking sector also discovered shortcomings in internal controls through self-inspections. Business policies and computer systems for controlling practices such as inflating appraisal values or excessive loan limit calculations were found to be inadequate.’,
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, ‘The FSS plans to operate a TF for revising best practice standards for internal control of loans. They stated that they would provide feedback on improvement plans submitted by the banking sector and continuously monitor the progress of implementation of the improvement plans.’,
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, ‘An FSS official emphasized, “After reviewing the results of the secondary investigation on suspicious transactions of excessive loans, we will take strict measures against illegal and unfair acts” and stated, “We will continue to urge the banking sector to further enhance their internal control systems to prevent real estate-secured loan incidents.”‘,
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