KB Kookmin Bank said on Tuesday it will provide special debt relief worth a total of 278.5 billion won for 12,433 financially vulnerable people.

The debt relief will combine principal reductions for short- and mid-term delinquent claims with the write-off of long-term delinquent claims. It aims to go beyond settling arrears and help vulnerable borrowers restore credit and re-enter formal finance.

Eligible borrowers include socially vulnerable groups with loans that are more than 5 years overdue and have principal of 50 million won or less, and borrowers subject to debt adjustment under the Personal Debtor Protection Act. The bank will accept applications through June and, after screening, plans to reduce principal by up to 90 percent.

For 2,074 borrowers with unpaid interest outstanding for more than 5 years, the bank will cancel remaining debt immediately rather than using a method that waives the statute of limitations.

KB Kookmin Bank has managed long-term delinquent claims by moving to resolve them rather than simply extending their prescription period. Over the past 3 years, it has continuously reduced long-term delinquent debt, including by retiring claims worth 277.9 billion won on its own.

The debt relief also includes young people aged 34 and under. The bank expects it will help ease the burden on young borrowers whose delinquencies have become long-term due to student loans and delayed employment.

A KB Kookmin Bank official said the debt relief is a measure to go beyond simply settling claims and lay the groundwork for vulnerable borrowers to participate in economic activity again. The official said the bank will continue to reduce blind spots in financial support through various inclusive finance programmes and fulfil its social responsibility by expanding practical support for vulnerable borrowers.