This file photo shows ATMs of major South Korean banks. (Yonhap)
SEOUL, May 26 (Korea Bizwire) — South Korea’s credit card companies are cutting overseas automated teller machine (ATM) withdrawal limits as part of their risk management efforts.
The nation’s largest credit card company, Shinhan Card Co., announced on Tuesday that it will reduce per-client overseas ATM withdrawal limits to US$50,000 per month starting from next month.
Previously, the company managed the monthly overseas ATM withdrawal limits in the range between $10,000-20,000 per card.
However, as the withdrawal of foreign currencies through overseas ATM recently increased sharply, it decided to strengthen its risk management policies.
The primary factors behind the surge in the withdrawal of foreign currencies through overseas ATMs are not clear but the increasing demand for overseas transactions targeting the difference in domestic and foreign prices of cryptocurrencies is thought to have contributed to the increase in withdrawals.
Cases of illegal foreign currency transactions to benefit from the so-called ‘kimchi premium’ or cases of buying cryptocurrencies overseas through the transfer of foreign currency are increasing.
Prior to these developments, KEB Hana Card Co. also restricted monthly overseas ATM withdrawal limits from $10,000 per card to $10,000 per client late last month.
NH Nonghyup Card Co. also reduced monthly per-card overseas ATM withdrawal limits from $20,000 to $10,000.
Last month, local commercial banks introduced a series of measures to restrict overseas remittance as part of efforts to reduce foreign currency demand, which has increased as local investors attempt to profit from the kimchi premium.
Kevin Lee (kevinlee@koreabizwire.com)
