North Korean authorities have launched sweeping inspections of bank loan practices in 2026. The goal is to root out possible collusion between banks and state enterprises over lending and interest repayments. The crackdown has left bank officials and company accountants on edge.
Inspectors dispatched from the central government began pilot inspections in late June, according to the source, who spoke to Daily NK on Monday. The teams are reviewing enterprise loans and interest repayments at local commercial banks. The pilot covers Ryanggang and South Hamgyong provinces.
“Bank officials and enterprise accountants are on edge,” the source said. “They don’t know where this inspection’s spark will land next.”
The inspections focus on whether banks gave enterprises special favors during the loan and interest repayment process, according to the source. Inspectors are also tracing whether enterprises used loan funds for their stated purpose. That means following the money through the broader financial system.
Central inspectors are cross checking loan ledgers and accounting records in the two provinces. They’re also reviewing transaction histories between banks and enterprises, along with interest repayment documents, one by one. The source described it as a microscope style review.
In response, local commercial banks have already reorganized their loan ledgers and accounting materials, the source said. Enterprises have likewise gone back through their transaction and repayment records with banks to prepare.
“Lately, there have been repeated demands in the financial sector to reverify the entire process,” the source said. “That means everything from loan approval to interest recovery. This time, the biggest difference is that they’re tracing fund flows. They’re zeroing in on whether banks and enterprises colluded. Banks and enterprises alike can’t help but watch each other nervously.”
North Korea tightens oversight as bank lending expands
North Korea has been trying to energize its economy by expanding the role of bank lending to enterprises. At the same time, authorities are stepping up surveillance of the collusion and financial leakage that can come with it.
More enterprises have turned to bank loans recently to secure operating funds, according to the source. That shift is seen as driving the government’s effort to prevent state financial resources from being siphoned off or misused. It also reflects a push to tighten central control over the banking system.
For now, the inspections remain a pilot program limited to Ryanggang and South Hamgyong provinces. Depending on the results, authorities may expand the campaign nationwide later this year, the source said. Anticipating that possibility, local commercial banks and enterprises elsewhere are reportedly moving quickly to conduct their own preemptive reviews. The goal is to avoid drawing scrutiny once the campaign spreads.
Reporting from inside North Korea
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