The financial authorities on Wednesday pledged to bring snowballing household debt down to the Organization for Economic Cooperation and Development average.

With household debt at a record high of more than 800 trillion won ($740 billion), the Financial Services Commission reiterated its commitment to tackling the issue.

“We plan to stabilize the market gradually with the goal of lowering the debt level to that of OECD countries,” the FSC said in a statement.

To reach that goal, the banking industry will be subject to tougher oversight in loaning to the household sector.

The FSC will crack down on commercial banks’ risky household lending by instructing them to raise profitability and financial soundness.

Banks will also be urged to stop evaluating branches based on their amount of household lending.

The FSC is also considering disciplinary action against credit card companies seeking reckless business expansion.

Instead, the use of check cards ― cards with the features of both credit and debit cards ― will be promoted.

The nation’s household credit, including loans and credit purchasing, reached 801.4 trillion won at the end of March, up 8.4 percent from a year earlier.

In particular, the proportion of mortgage loans to total household lending hit a record high in the fourth quarter of last year amid low interest rates in 2009 and 2010.

By Kim Yon-se (kys@heraldcorp.com)