TOKYO -- Japan's quasi-governmental deposit insurance fund has agreed to give Sanwa Bank $156 million to help facilitate its absorption of scandal-scarred Toyo Shinkin Bank.
An official of the Japanese Deposit Insurance Corp. said the payment would be the first it had ever made. Also this year, it made its first loan to facilitate another rescue-merger. The deposit insurer has $3.5 million in capital, with roughly one-third provided by government, one-third by the Bank of Japan, and one-third by private financial institutions.
$5.5 Billion in Fees
In the 21 years since the insurance fund was set up, it has accumulated roughly $5.5 billion in insurance fees, the official said.
The Finance Ministry announced in late April that the branches of Toyo Shinkin would be acquired by Sanwa and a number of credit unions.
Toyo Shinkin's viability was undermined after one of its branch managers was found to have cooperated with an Osaka restaurateur in forging certificates of deposit.
Merger to Close Oct.1
The deposit insurer said the $156 million will be given Sanwa when its merger with Toyo Shinkin closes Oct. 1.
The insurer said its decision was based on the need to protect depositors and to maintain confidence in the financial system.
Although the insurance corporation is ostensibly independent of government, its director always comes from the Bank of Japan, according to a central bank spokesman.