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Business

More Aid Likely for Thrifts

Feb 08,2001
Since the government's plan to sell 20 ailing mutual savings banks has fallen through, an additional infusion for the thrifts from restructuring funds is expected. If the thrifts close, the Korea Deposit Insurance Corp. would have to pay back their customers' deposits. "If none of the thrifts are sold we would have to pay the 2.9 trillion won ($2.3 billion) of their deposits out of restructuring funds," a Financial Supervisory Service official said Thursday. He said that the 3.4 trillion won appropriated for the sector last year "may bottom out soon."

A turn-off for potential buyers is the lump sum they would have to make, in addition to the purchase amount, to cover the acquired thrift's borrowings from the deposit insurer made to redeem deposits within a 20 million won per-person ceiling.
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