A government-sponsored bill to revise the Deposit Insurance Law was enacted Friday when the Upper House passed it on the final day of the 141st extraordinary Diet session.

The revision was passed by a majority vote of the ruling Liberal Democratic Party and its allies. The Heiseikai group and other opposition parties boycotted the plenary session. The Japan Communist Party voted against the bill.

Heiseikai, which consists of the major opposition Shinshinto party and other opposition forces, was poised to submit a motion of no-confidence against Upper House President Juro Saito later in the day, but he was expected to withstand the vote.

Under the revision, the Deposit Insurance Co. will be able until March 31, 2001, to disburse funds as a restructuring step to a company resulting from the merger of two or more ailing financial institutions. As a permanent measure, it can aid financial institutions created by the merger of healthy and troubled banks.

The opposition parties criticized the revision as being designed more for rescuing troubled banks than for protecting depositors. At present, the DIC is allowed to dispense its funds to a financial institution that agrees to rescue a problematic financial firm through such means as acquisition, takeover of operations, or equity investment. Under the revised law, DIC assistance is also made available to financial holding companies that take troubled financial firms under their wings.

As the financial community braces for the impending "Big Bang" of financial system deregulation, the possibility of a rise in failures is rapidly becoming a reality, as seen by the succession of four collapses in November alone. The ministry hopes the revision of the Deposit Insurance Law will help broaden the options for handling financial failures.