The Seoul Credit Guarantee Foundation pushed back Monday against recent criticism over delays and omissions in processing guarantee cancellations, saying faulty automatic notification systems at some banks were the root cause.
The foundation said financial institutions must notify it of loan repayments before it can process a guarantee cancellation, making the banks' notification step a prerequisite for the entire procedure.
Repeated errors and omissions in some banks' automatic notification systems had disrupted that process, the foundation said.
To address the problem, the foundation said it had been urging banks to upgrade their systems since 2017.
It sent improvement requests to banks at least eight times between 2017 and January this year, and held meetings between its president and bank vice presidents as well as working-level consultations. The automatic notification system upgrades were completed in January this year as a result, the foundation said.
The foundation also rebuffed claims in recent media reports that regional credit guarantee foundations had failed to carry out their own verification duties, calling those characterizations inaccurate.
The foundation said it had maintained a separate monitoring system to prevent guarantee cancellation omissions, independent of the banks' automatic notification systems.
According to the foundation, it has conducted monthly manual checks on guarantees reaching maturity since 2016, and expanded the scope in 2024 to cover early repayments made before maturity.
"The foundation has continuously monitored to prevent any delays or omissions in guarantee cancellations," a foundation official said. "We will keep a constant watch on cancellation status going forward and work to process guarantee cancellations more swiftly and accurately."
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