The Finance Ministry's Banking Bureau urged its inspection division to "listen to what Nippon Credit Bank has to say" while carrying out an emergency inspection of the ailing bank in April 1997, informed sources said Monday.
At the time, NCB and the inspectors had differing opinions over how many of the bank's loans to its affiliates could be recovered. To solve the impasse, banking bureau officials urged the bank to press its case while calling on inspectors to listen to NCB.
The suggestion came after senior NCB executives approached banking bureau officials to complain that the inspection was "too severe," the sources said.
The bureau, which placed top priority on keeping the major bank from collapsing, had been demanding that the nation's other banks and insurance companies put up money to assist NCB.
Against this backdrop, the bureau — in a rare move — called on the ministry's own inspectors to ease up on their probe of NCB's assets, according to the sources.
Sources close to the bureau maintained that the request was not made in an effort to warp the inspection and that the probe was conducted in a fair manner. Former inspection division officials, however, said the call had been unheard of.
Prosecutors looking into the possibility that NCB falsified information on its earnings reports for the year ending March 1998 have learned of the banking bureau's pressure tactic and have already questioned former bureau officials regarding its actions at the time, the sources said.