The Financial Services Commission (FSC) issued a preliminary notice of legislative revisions to raise South Korea’s maximum deposit protection coverage to KRW 100 million from KRW 50 million, with implementation planned for September 1, 2025. The change would be the first increase in the limit in 24 years and would apply when a financial company becomes insolvent or bankrupt and cannot repay deposits. The higher limit would cover Korea Deposit Insurance Corporation (KDIC)-insured banks and savings banks, as well as mutual finance institutions protected by their own federation funds, including credit unions, agricultural cooperatives, fisheries cooperatives, forestry cooperatives, and community credit cooperatives. The proposal also increases protection to KRW 100 million for retirement pension plans, pension savings, and accident insurance payments that are currently treated separately within the same financial company. To keep protection levels consistent across deposit-taking institutions, the FSC is proposing coordinated updates to rules in six different Enforcement Decrees with relevant ministries; the implementation timing reflects taskforce discussions about potential deposit flows across sectors and requests from firms for a preparatory period. Public comments are open from May 16 to June 25, 2025, and the revisions are intended to take effect on September 1, 2025 following deliberation and approval procedures. The FSC and the KDIC will also work on revised deposit insurance premium rates in light of higher insured deposits, with new premium rates to apply from 2028, while continuing to monitor deposit flows and considering additional measures such as a financial stability vehicle under the deposit insurance scheme.

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