The Financial Services Agency declared Saturday Eitai Credit Union insolvent, legally forcing it to begin insolvency proceedings under the Deposit Insurance Law, FSA sources said.

However, Eitai officials said later Saturday that they would not accept the declaration, saying the credit bank would continue its business independently.

As a result of an inspection last year, the agency concluded that the credit union, based in Tokyo's Koto Ward, had fallen into a negative net worth, with its capital-adequacy ratio standing at about minus 5 percent, the sources said.