| |
TOKYO: The private Incubator Bank of Japan (IBJ) has been ordered to halt operations and will file for bankruptcy Friday, in what would be Japan's first bank failure in seven years, officials said.
The Financial Services Agency has told the bank it cannot do any business for at least three days and must make efforts to protect existing depositors, the FSA said in a statement.
The Nikkei business daily and other Japanese media said the FSA is likely to let the bank go under and will only refund depositors a maximum of 10 million yen (120,000 dollars).
This would be the first time that a cap on deposit insurance had been used in Japan.
The Tokyo-based bank may report a negative net worth of 150 billion yen, the Nikkei reported, without citing sources.
Shozaburo Jimi, the minister in charge of financial services, said in a statement that the IBJ will file for bankruptcy later Friday to the Tokyo District Court.
"It's extremely regrettable that the situation occurred. I hope depositors remain cool-headed as up to 10 million yen in deposits will be protected," he said.
It would be the first bankruptcy in Japan's banking sector since 2003. The cap on deposit insurance was enacted in 2002, after a slew of banks went bankrupt following the bursting of the economic bubble in the 1990s.
Incubator Bank of Japan specialises in providing banking services for small and medium-sized businesses and is not related to Japan's central bank.
Banking shares were mixed in Tokyo trade Friday, with Mitsubishi UFJ Financial group up 1.49 per cent. Shinsei Bank was 3.03 per cent lower.
The benchmark Nikkei index was up 1.90 per cent.
-AFP/wk
|
