Japanese banks' bad loans won't be driven higher by a proposed moratorium on debt payments by struggling small companies, Financial Services Minister Shizuka Kamei said.
Lenders won't have to classify loans encompassed by the plan as nonperforming, Kamei, 72, said in an interview Monday.
That means they won't be forced to boost provisions when borrowers postpone repayments of interest or principal, he said. At the same time, Kamei vowed to push banks to extend more credit to small businesses after bankruptcies hit a six-year high.