Financial authorities to extend special oversight of saemaul credit unions through year-end

The government will extend a special task force overseeing the financial health of saemaul credit unions through year-end, maintaining intensive monitoring through close interagency coordination.

The Ministry of Interior and Safety announced Friday that it will extend the saemaul credit union financial soundness task force — originally scheduled to run through the first half of this year — through year-end, in cooperation with the Financial Services Commission, the Financial Supervisory Service, the Korea Deposit Insurance Corporation and the Bank of Korea.

Routine monitoring and management reviews conducted through the task force show that the credit unions' management indicators have been improving compared with the same period last year. Restructuring has also accelerated, with 21 credit unions merged in the first half of this year alone.

Regulatory reforms introduced earlier this year have required saemaul credit unions to submit data regularly through the Financial Supervisory Service's CPC support system — on par with other mutual financial institutions — since the end of March. From August, IT work is underway to launch a deposit monitoring system that will allow financial authorities to track deposit trends in real time.

The Ministry of Interior and Safety, the Korea Deposit Insurance Corporation and the Korea Federation of Community Credit Cooperatives will jointly operate a "restructuring promotion task force" through year-end to continue addressing insolvent credit unions. The deposit insurer will also provide post-merger support — including investigations into the causes of insolvency and management consulting — to help merged institutions operate successfully.

A joint government inspection involving the Ministry of Interior and Safety, the Financial Supervisory Service and the Korea Deposit Insurance Corporation completed reviews of 35 credit unions in the first half of the year. Where intentional misconduct or gross negligence by executives or employees is confirmed, the government said it will impose strict sanctions.

The government plans to continue intensive financial soundness management through close interagency cooperation in the second half of the year, and will also discuss a range of measures to support the long-term financial health and sustainable development of saemaul credit unions.