Suruga Bank Banned from Extending New Real Estate Loans for 6 Months

Politics Economy

Tokyo, Oct. 5 (Jiji Press)--Japan's Financial Services Agency banned Suruga Bank <8358> on Friday from extending fresh loans for real estate investment for six months, over its improper practices related to such financing.

The ban will be in place between Oct. 12 and April 12 next year. A business suspension order effective for such a long period is rare in Japan.

The FSA also ordered Suruga Bank, based in Numazu in the central prefecture of Shizuoka, to clarify management responsibility over the scandal and submit specific improvement measures by the end of November.

It is the first business suspension order issued in Japan to a domestic bank since one given in December 2013 to Mizuho Bank, a unit of Mizuho Financial Group Inc. <8411>, over loans extended to antisocial forces by an affiliated lender.

The improper practices involving Suruga Bank employees included manipulations of documents related to loans. The FSA began an on-site inspection of the bank in April to investigate details.

[Copyright The Jiji Press, Ltd.]

Jiji Press