BOJ to Help Strengthen Regional Banks

Politics

Tokyo, Nov. 10 (Jiji Press)--The Bank of Japan said Tuesday that it will introduce a temporary measure to help regional banks as they face a tough business environment caused by falling populations and the new coronavirus.

The BOJ will offer an additional interest rate of 0.1 pct for regional banks’ current account deposits at the central bank on condition that they work on improving their finances through mergers and other means.

The measure, effective through the end of fiscal 2022, supports an effort by the government to make regional banks more competitive through realignment. Before taking office in September, Prime Minister Yoshihide Suga said their number is large.

The BOJ’s measure covers regional banks, second-tier regional banks and shinkin banks. They need to make a merger decision or improve finances by themselves by March 2023.

If the BOJ applies the measure to all regional and shinkin banks, it would need some 40 billion to 50 billion yen a year to provide the additional interest rate.

[Copyright The Jiji Press, Ltd.]

Jiji Press