The Financial Services Agency has ordered Mizuho Bank to stop lending money to yakuza and said the bank appeared to be making little progress in addressing the problem.
Mizuho, the country’s third-biggest bank, has processed about ¥200 million worth of transactions for “anti-social forces,” a wide-ranging term commonly used in Japan to refer to mobsters, the FSA said Friday.
The financial watchdog scolded Mizuho for taking “no substantial steps” to deal with the issue since it was revealed two years ago and pointed to “serious problems” with its compliance monitoring.
The FSA instructed Mizuho to make a “clean break” from yakuza syndicates after the lender was found to have conducted 230 dubious transactions, mostly in the form of car loans.
In the first order of its kind against a domestic bank since 2007.
Mizuho now has to formulate measures to prevent a recurrence and submit a business improvement plan by Oct. 28, the agency said. Mizuho must also submit progress reports at the end of November and December, and every three months from then on.
According to the National Police Agency, authorities have stepped up efforts to combat the yakuza. Like the Italian mafia and Chinese triads, yakuza syndicates engage in activities ranging from gambling, drugs and prostitution to loan-sharking, protection rackets, money-laundering, white-collar crime and business conducted through front companies.
Friday’s action is the latest blow for Mizuho after the FSA punished it for a computer glitch that delayed transactions in March 2011 following the Great East Japan Earthquake and tsunami.
Mizuho said in a statement Friday that it “takes this order very seriously and deeply regrets these occurrences.” The bank added it “expresses its deepest and most sincere apologies to its clients and all related parties for any concern or inconvenience this may have caused.”
Yakuza syndicates, which themselves are not illegal, have historically been tolerated by the authorities, although there are periodic clampdowns on some of their less savory activities.
In 2007, the FSA ordered the banking unit of Mitsubishi UFJ Financial Group Inc. to suspend some of its operations for a week after discovering that a branch in Hyogo Prefecture had been doing business with an “anti-social group” for more than 30 years.