Three internet banks rein in the 'debt-fueled investing' craze...Toss Bank cuts credit loan and overdraft limits (combined)

[Financial News] KakaoBank, K Bank, and Toss Bank are moving to curb demand for "debt-fueled investing." By successively reducing credit loan and overdraft limits, the three internet banks are aligning with the financial authorities' push to manage household lending.
According to the financial sector on the 16th, Toss Bank will cut the maximum limit for credit loans from 300 million won to 100 million won starting at 6 p.m. on the 18th. The maximum limit for new overdraft accounts will also be sharply reduced from 150 million won to 50 million won.
Toss Bank will also tighten the criteria for adjusting limits on existing overdraft customers. Starting on the 24th, the rule will apply to accounts whose limit usage rate has been 40% or lower over the past three months. Under the revised measure, the minimum reduction rate will rise from 20% to 30%, and loan limits may be cut by as much as 40%.
To prevent a sharp expansion in lending, Toss Bank plans to temporarily restrict loan applications if the size of its credit loans exceeds an appropriate level. However, it said it will operate in a way that does not disrupt funding for mid- to low-credit borrowers.
Toss Bank said, "The end date for this adjustment measure has not yet been decided, and we will respond by comprehensively considering future household lending trends and market conditions."
KakaoBank will cut the maximum overdraft loan limit to 100 million won starting on the 22nd. The previous cap of 240 million won has been reduced by about 140 million won. From July, when extending overdraft loans of 50 million won or less, it will reduce limits by up to 20% for accounts whose limit usage rate has been 20% or lower over the past six months.
KakaoBank said, "We have already been applying daily application caps to credit loans to ensure stable household lending management, and we plan to keep that system in place," adding, "We will maintain a strict household loan management stance while also working to supply funds centered on actual demand."
K Bank has suspended applications to open overdraft accounts from today through the end of July, making it the fastest of the three internet banks to act on household loan management. The bank also plans to reduce the limit for new credit loans to high-income earners. A K Bank official said, "The specific timing for applying the reduction in new credit loan limits is still under internal discussion."
The three internet banks are also adjusting the pace of loan issuance in line with the financial authorities' household lending policy and the preemptive moves of commercial banks. The financial authorities are stepping up their response to the rapid increase in other loans, including credit loans.
Household loans across the financial sector rose by 9.3 trillion won last month, a sharp increase from the previous month's gain of 3.5 trillion won. Other loans grew by 5.3 trillion won, led by credit loans of 3.4 trillion won, driving the overall increase in household lending.
chord@fnnews.com Lee Hyun-jung Reporter