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Korean residents in Japan decided Friday to apply in late June for the establishment of a bank to take over the healthy assets of failed credit unions serving their community, officials said.

The decision was made at a meeting of the Central Executive Committee of the pro-Seoul Korean Residents Union in Japan (Mindan), the officials said.

Mindan is keen to establish the bank by the end of this year to finish taking over the sound assets of failed “shogin” credit unions by April, when the current system of blanket deposit protection is lifted, it said.

Mindan will soon launch a joint task force with the Association of Korean Credit Cooperative (Kanshinkyo) — an umbrella body of shogin — to pave the way for the bank.

Mindan and Kanshinkyo will ask Seoul for financial support to eventually secure a capital base of 60 billion yen for the bank. The two groups will also call on remaining shogin to merge with the bank, Mindan officials said.

The bank project surfaced after Kanshinkyo failed to merge its member credit unions in April due to Seoul’s refusal to provide financial support.

Shogin funnel funds primarily to businesses operated by Korean residents in Japan who hold allegiance to the South Korean government.

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