Published : 2013-03-05 20:34
Updated : 2013-03-05 20:34
The Financial Supervisory Service said Tuesday that it has issued an “institutional warning” against Korea Exchange Bank for raising interest rates on loans to the corporate sector via “irregular practices.”
Its irregular rate hikes were mostly conducted when U.S.-based Lone Star Funds was holding the majority stake in the commercial bank as the biggest shareholder.
“Glossing over lending terms, KEB raised the rates on loans to small- and mid-sized enterprises. The hikes ranged between 0.2 percentage point and 0.7 percentage point and the number of irregular cases came to 6,308,” an FSS official said.
He said the bank overcharged the SMEs by 18.1 billion won ($16.7 million), adding that the regulator has ordered it to reimburse the borrowers the overcharged interest.
The figures who initiated the rate hikes included former KEB chairman Richard F. Wacker, according to FSS officials.