According to two banking sources familiar with the situation, South Korea’s financial services regulator has requested major commercial banks to set aside approximately $4 billion in financing to assist a credit cooperative facing customer withdrawals.
On Monday, an official from the Financial Services Commission acknowledged the request for liquidity support through repurchase-agreement facilities to aid MG Community Credit Cooperatives (MGCCC), although they refrained from disclosing specific details or confirming the exact amount. Due to the sensitivity of the matter, the official chose to remain anonymous. The commission declined to provide any additional comments.
The recent surge in non-performing loans linked to real estate projects, as reported by local media, prompted depositors to form queues last week in order to withdraw funds from a branch of the cooperative. The branch, located in Namyangju, east of Seoul, is scheduled for closure in the near future.