Industrial Bank of Korea said Tuesday it will cancel 120 billion won ($86.9 million) in long-overdue bonds by the end of this year.
The measure is designed to ease the financial burden on vulnerable borrowers who have suffered under prolonged debt collection and to support their economic recovery.
More than 5,000 borrowers are eligible for the debt cancellation. By September, the bank will cancel 67.5 billion won in bonds covering about 3,600 borrowers — targeting bonds held in special-asset status for more than five years with a remaining balance of 5 million won or less, and those held for more than seven years with a balance of 100 million won or less.
An additional 52.5 billion won in bonds covering about 1,400 borrowers will be canceled by December. Those bonds have been in special-asset status for more than five years with a remaining balance of 100 million won or less.
The bank launched the "IBK Inclusive Loan" in July, offering an annual interest rate of 4.9 percent for low- to mid-credit borrowers. The program has a total capacity of 1 trillion won.
"We carried out the bond cancellation to help vulnerable people who have been unable to break free from the burden of long-term debt get back on their feet," a bank official said. "We will continue to support marginalized communities through active inclusive finance practices."
hyuk@heraldcorp.com
