S. Korean small firms forced to buy financial products

Email|Print|Comments       twitter     facebook     Sina Microblog     reddit    

SEOUL, Oct. 11-- A quarter of South Korean small businesses were forced to buy financial instruments after borrowing money from banks, survey by the country's financial regulator showed Friday.

According to the poll by the Financial Services Commission (FSC) on 359 small companies, around 25 percent of respondents said that they experienced forced purchases of financial products after making loans at banks.

Small companies and people with low credit rating, which have low bargaining power, are forced by banks to buy their financial products such as bancassurance and other deposit products when borrowing money from banks.

"Executives and staff members and their families have been induced to buy financial products, including fund and insurance products as well as deposits," Lee Byung-rae, head of financial services bureau at the FSC, told reporters.

To curb the illegitimate pressure to buy financial products, the regulator planned to strengthen its monitoring of such practices, while toughening the so-called 1 percent rule.

According to the rule, if small firms buy financial products worth more than 1 percent of loans made from banks, it is regarded as illegitimate purchases of financial products and punished by the regulator.

• S.Korea's 2014 growth outlook revised down by IMF
• S. Korea slams DPRK's repeated condemnation of President Park
• S. Korea builds lab to check IAEA nuke samples
• S. Korean president meets vietnamese top leaders in Hanoi
• S. Korea approves arrest of leftist lawmaker
• S. Korea, DPRK begin talks on family reunion
• S.Korea frustrated over lack of progress Kaesong talks
• S. Korea says top priority in talks with DPRK lies in recurrence prevention
• One Chinese man dead while building sewer pipes in S. Korea
• S. Korea puts Kaesong issue before Mt. Kumgang tour

We Recommend

• 2013 Colour Me Rad 5K run held in Canada
• China's destroyer Qingdao sails out of Sydney Harbor
• Chinese tycoon aims to restore London's Crystal Palace
• Typhoon Fitow affects 4.56 million people in east China
• Game for the brave: 'Spiders' in Yandang Mountains
• Travel peak witnessed on last day of National Day holiday
• New couples take wedding photos during holiday
• Serena Williams stumbles through to quarterfinals
• Thailand Mobile Expo 2013 kicks off