Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Citibank Korea to stop sale of consumer banking services in February
Citibank Korea's headquarters in Seoul / Yonhap
By Lee Min-hyung
By Lee Min-hyung
Citibank Korea will stop the sale of all consumer banking services and products as of Feb. 15, as part of its decision to shut down its retail banking business in phases here.
Those who already signed up for the lender's loan products can extend their maturity dates until the end of 2026. After that, they must pay back the principal and interest every month for a maximum of seven years, according to the lender.
After Citibank Korea reported the plan to the Financial Supervisory Service (FSS), the watchdog also submitted the consumer protection measure of the lender to the Financial Services Commission (FSC). The authority said it will continue reviewing the decision by Citibank and ask the lender to keep revising it, so as to minimize possible damage to customers.
The latest decision from the Korean subsidiary of the U.S. banking group did not draw any criticism from the market, as few of Citi's existing consumers are expected to fall victim to it. When they pay back their loans by receiving loans from other lenders, Citibank Korea customers will not be subject to the debt service ratio (DSR) regulation. This measure will ensure the reduction of their financial burden for the next few years when paying back the loans to Citibank Korea.
“We are going to do our best to minimize consumers' inconvenience with the focus on the protection of our users and thoroughly abide by the relevant laws while carrying out our exit strategies here,” a spokesperson at the lender said.
The lender also plans to run a consultation program for its users, helping them easily repay their debt, according to the lender.
Since November, Citibank Korea has not charged any commission on early redemption, and it stressed that this program will continue to operate.
Meanwhile, Citibank Korea decided to shut down its consumer banking unit here in October of last year, after failing to find a potential buyer. It has since taken a set of steps to speed up the phased shutdown, such as the acceptance of voluntary retirement for employees. The lender will continue to fine-tune the already-submitted exit plans in line with instructions from the financial authorities here, it said.