K Bank to Resume New Overdraft Credit Line Openings in October After 31⁄2-Month Freeze

[Financial News] K Bank will resume opening new overdraft credit lines in October. The move comes about three and a half months after the bank suspended new offerings in mid-June to manage the growth of household lending.
According to sources in the financial sector on the 28th, K Bank plans to end its suspension of new overdraft credit line openings, which was set to remain in place through the end of this month, and resume offering them in October.
K Bank suspended new overdraft credit line openings on June 16 to manage demand for debt-financed investing amid the stock market boom, as well as the growth of household lending. It subsequently extended the suspension one month at a time and kept it in place through this month.
A K Bank official explained, "We are resuming new overdraft credit line openings to ensure a stable supply of loans and improve customer convenience."
In June, the three internet-only banks restricted their overdraft credit line offerings after financial authorities asked banks to manage credit lending amid rising demand for debt-financed investing. KakaoBank and Toss Bank lowered their limits to 100 million won and 50 million won, respectively, while K Bank took more stringent action by completely suspending new offerings.
Industry sources explained that suspending a particular financial product for more than three months is also burdensome for banks. Such a move limits customer choice and could cause customers to switch to other banks or weaken the product's competitiveness.
A banking-sector official said, "If a financial product is unavailable for an extended period, customers have fewer options and demand may shift to other banks. K Bank likely decided when to resume the service after considering both the growth of household lending and customer demand."
[email protected] Lee Hyun-jung Reporter