Bank of Korea faces criticism over low-interest housing loans for employees

The Bank of Korea (BOK) has come under scrutiny for offering low-interest housing loans to its employees while the public faces stricter lending conditions. In the first half of the year, 150 BOK employees utilized housing loans amounting to approximately 5.96 billion won (about $4.3 million USD).

The interest rate for these internal loans was set at 3.5%, which is 0.8 percentage points lower than the average new mortgage rate of 4.3% offered by commercial banks. This disparity has raised concerns about fairness, particularly as the government tightens regulations on household debt, making it harder for ordinary citizens to secure mortgages and home rental loans.

Data shows that 122 employees, or 81% of recipients, took out loans for home purchases, totaling 4.8 billion won. Another 28 employees received loans for rent, amounting to 1.15 billion won. The average loan for purchasing a home was 39.4 million won, while the average rental loan was 41.2 million won.

Critics argue that these preferential internal loans could lead to a "fairness controversy" with the general public. Furthermore, the BOK's internal loans are not shared with credit rating agencies, meaning they are not directly factored into the Debt Service Ratio (DSR) calculations used by commercial banks. This could allow employees to take out additional loans from financial institutions, potentially understating their total debt burden.