Financial Supervisory Service of Korea: Plans to restrict active-duty military personnel from applying for high-interest small loans within the year

According to a report by the Korean News Agency, the Financial Supervisory Service (FSS) of South Korea announced that it will collaborate with the Financial Services Commission and the banking industry to promote several new financial consumer protection regulations. These include completing the establishment of standard business norms by the end of the year and fully restricting microcredit institutions from issuing general credit loans to active-duty military personnel.

Data shows that the loan scale for active-duty military personnel from the top 30 credit institutions registered with the Financial Services Commission in South Korea has surged from 350 million Korean won at the end of 2022 to 24.2 billion Korean won (approximately 17 million USD) by the end of 2025. South Korean regulators pointed out that some active-duty military personnel blindly invest borrowed funds into high-risk investments such as virtual assets (cryptocurrencies) and online gambling, which is one of the main reasons for excessive debt.

In addition, the Financial Supervisory Service of South Korea will also promote the expansion of flexible banking outlet operations and shorten the notification period for long-unused prepaid electronic payment accounts from 1 year to 3 months.