A Woori Bank flag stands alongside a Korean flag at the main gate of Woori Financial Group's headquarters in downtown Seoul, Aug. 27. Yonhap

Woori Financial Group tightened its lending rules to prevent relatives of its executives from taking out loans improperly, it said Thursday.

The measure comes two days after former Chairman Son Tae-seung was indicted for his alleged involvement in securing loans for his relatives without going through the proper approval process.

The case seriously damaged the credibility of the country's third-largest financial holdings company after it was disclosed in 2024.

"We've come up with tighter rules, to ensure executives do not abuse their power and let their acquaintances benefit illicit gains from the company," the group said. "The rules are also aimed at turning down improper requests from executives' relatives."

The group said it is the first major financial group to introduce such an anti-corruption policy.

The rules will apply to a total of 193 executives from the holding firm and its 13 affiliates, including Woori Bank, which gave out loans to Son's relatives from 2021 to 2023 when he was in office.

The financial holding company took note of the personal information of the 193 executives and their relatives.

Loan officials at retail bank branches and a credit review department will be automatically notified when the listed individuals apply for loans.

"They will undergo strict screening concerning their eligibility to obtain loans," the company said.

It added it will especially pay attention to whether the executives used their influence to offer loans even when their relatives failed to meet the criteria to borrow money.

Any attempt to offer loans that violate the regulations will be promptly reported to the group's ethical management department, which will initiate an internal investigation and impose sanctions if needed.

Meanwhile, the group said its credit review department has been given more powers to strengthen lending oversight.

The improper loans taken out by Son's relatives raised questions about the internal regulatory system of Woori Financial Group, which was already criticized due to other irregularities concerning some of its banking employees.

The case has made it difficult for Woori to diversify its business portfolio under the leadership of Son's successor, Yim Jong-yong.