[2026 Parliamentary Audit] Lee Chanjin on controversy over banks cutting preferential rates: "I'll look into it"

Min Byeongdeok: "Told banks to lower additional interest rates, but they cut preferential rates"

Financial Supervisory Service Governor Lee Chanjin said on Oct. 19 that he would look into claims that banks are increasing their interest income by cutting preferential interest rates instead of lowering additional interest rates.

Financial Supervisory Service Governor Lee Chanjin answers lawmakers' questions during a parliamentary audit of the Financial Supervisory Service and other agencies at the National Assembly on Oct. 19, 2026. Photo by Yoon Dongju

At a parliamentary audit of the Financial Supervisory Service and other agencies by the National Assembly's Political Affairs Committee that day, Lee responded to a similar claim by Min Byeong-deok of the Democratic Party of Korea, saying, "I have seen such cases, but understood them to reflect the sharp rise in market interest rates. If the point raised is correct, I will look into it."

Min criticized the banks, saying, "When the law required them to lower additional interest rates, they used the loophole of cutting preferential interest rates," calling it "an act of deceiving the public." The criticism appears to refer to banks offsetting the effect of lower lending rates by reducing preferential interest rates and raising additional interest rates, despite an amendment to the Banking Act taking effect last July that bars banks from including certain statutory expenses when calculating additional interest rates on loans.

However, global bond yields are rising amid higher oil prices and inflationary pressure stemming from the war in the Middle East, adding upward pressure on lending rates. Banks' reduced lending supply, in line with the government's tighter management of household loans, is also cited as a factor driving up lending rates, including through increases in additional interest rates.

This content was produced with the assistance of AI translation services.