Mutual Finance Loan Restrictions... Real Estate PF Loans Capped at 20% of Total Loans
Mutual finance institutions will also have their real estate project financing (PF) loan limits capped at 20% of total loans, similar to savings banks. The combined limit for real estate business, construction business, and real estate PF loans will be restricted to 50% of total loans.
The Financial Services Commission approved a partial revision of the supervisory regulations for mutual finance business at a regular meeting on June 17, 2026.
For non-performing assets such as long-term delinquent real estate PF loans, the system for calculating expected recoverable amounts will be improved so that loan loss provisions are set in proportion to the risk.
The exception allowing the use of the final collateral appraisal value when calculating the expected recoverable amount for substandard or below loans will be permitted only once, and only if legal proceedings are expected to begin within three months.
The minimum net capital ratio to total assets will be raised to 4% or higher to strengthen the loss absorption capacity of mutual finance cooperatives.
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Most of the amendments will take effect immediately as of June 17, 2026.
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