The Resolution and Collection Corp. hopes to start buying bad loans from healthy banks in late June or July, its president said Thursday.
Kohei Nakabo said at a regular news conference that the state-backed debt collection body is now consulting with Deposit Insurance Corp., which wholly owns the RCC, on ground rules regarding how and at what price the RCC will purchase sour loans from banks.
Officials from the Finance Ministry and the Financial Supervisory Agency are also involved in the rule-making process, he said.
Nakabo said the RCC will hold a seminar in June for banks interested in selling it bad loans, adding that some banks have already shown interest.
The outstanding bad loans of the nation’s 17 major banks topped 20 trillion yen in fiscal 1998, according to earnings reports. Nakabo has said the RCC wants to buy at least 10 trillion yen worth of the bad loans.
The RCC, created in April through the merger of two state-backed collection firms, plans to specialize in the recovery of loans that are the hardest to collect. Such loans include those connected to gangsters or those in which debtors have hidden their assets to avoid confiscation.
In such cases, the RCC is believed to have an edge over other collectors, because it can use the special investigative power given to the DIC.
Nakabo also announced that the RCC’s loan collection target for fiscal 1999 will be 710 billion yen. This includes 425 billion yen in loans formerly held by the Housing Loan Administration Corp. and 285 billion yen formerly owed to Resolution Collection Bank, which took over loans from failed banks and credit unions before it was merged with the HLAC into the RCC.