South Korea's financial watchdog Wednesday announced its plan to inject 1 trillion won (690 millionU.S. dollars) in public funds this month to prevent the collapse of savings banks.
According to the Financial Services Commission (FSC), 89 savings banks which provided 12.2 trillion won (8.41 billion U.S. dollars) in private financing to areas such as construction, are currently facing repayment problems amid deepening economic slump.
The FSC said the state-run Korea Asset Management Corp. will take over 164 private financing arrangements that have turned bad.
The FSC also said that savings banks that are in trouble will have to engage in workout programs, including measures to increasecapital by large shareholders and seek mergers with other firms.
The bailout funds are the first large scale injections into financial institutions since 2003.
Source:Xinhua
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