The Financial Services Agency will require banks to take drastic restructuring plans, including changes in top management, if they fall into the red and skip dividends after receiving public funds, according to a draft of guidelines obtained by Kyodo News.
The FSA is preparing to issue the guideline later this month to spur financial improvement among banks because a number of them, including major ones, are expected to fall into the red or forgo dividends for fiscal 2000, which ended March 31, and in the first half of the current fiscal year.
Banks that have received public funds to replenish their depleted capital bases are presumably in the midst of improvement because they had to submit reform plans to the government to get the injections. They are also required to repay the funds with internal reserves and other surplus funds on hand.