The South Korean government is ready to kick off an 11 - trillion - won ( $ 9 . 59 billion ) recapitalization fund designed to replenish the capital of Korea ’ s two major state - run banks that need enough funds to support troubled shipping and shipbuilding companies to fight liquidity woes and clean up other ailing sectors . On Friday , the monetary policy board of the Bank of Korea gave its final approval to a 10 trillion won loan to finance ministry - owned Industrial Bank of Korea that will be used in setting up a special fund to help recapitalize state - run banks , Korea Development Bank ( KDB ) and the Export - Import Bank of Korea ( Korea Eximbank ) . The loan will have a maturity of a maximum one year and the fund will run until the end of 2017 . The BOK will review whether the support should continue at the end of every year . Earlier last month , the government announced that the central bank and it would jointly create an 11 trillion won fund as the country needs to ready enough ammunition for upcoming massive restructurings across various sectors in the country . Under the plan , the government has the Korea Asset management Corp . ( KAMCO ) create a special purpose vehicle , where the central bank will provide 10 trillion won in special loans , and Industrial Bank of Korea purchase KAMCO subordinated securities worth 1 trillion won . The latest vehicle is a variant of a bank capital expansion fund raised by the government and the Bank of Korea in 2009 to fight back liquidity crunch cause by the global financial crisis in 2008 . The money in the fund will be used to purchase contingent convertible ( CoCo ) bonds that can be converted into equity issued by state banks to uphold the capital adequacy ratio at KDB and Korea Eximbank . As of end - March , the BIS capital adequacy ratio of KDB and Korea Eximbank stood at 14 . 6 percent and 9 . 9 percent , respectively . KDB remains endurable but the Eximbank is in urgent need of recapitalization . A government official said the target timeline for recapitalization into the Eximbank is September . In addition , the government decided to recapitalize the Eximbank with public companies ’ shares worth 1 trillion won owned by the government by the end of September to help the bank raise its BIS ratio to 10 . 5 percent or higher . [ ⓒ Maeil Business Newspaper & mk . co . kr , All rights reserved ]