Japan’s four major banking groups plan to cut interest rates on their ordinary deposits to coincide with the April 1 abolition of full government protection of time deposits, banking sources said Monday.
The four are Mitsubishi Tokyo Financial Group Inc., Mizuho Holdings Inc., UFJ Holdings and Sumitomo Mitsui Banking Corp.
The rates will probably be cut to 0.01 percent or less from the current 0.02 percent, bringing ordinary deposit rates to a record low, the sources said.
It will be the first rate cut since March 2001, when the Bank of Japan adopted quantitative credit-easing steps.
The banks want to cut the rates to help balance the shift in depositors’ money from time to ordinary deposit accounts, which will be fully protected for another year.
The banks need to prevent such a shift partly because they will have to pay higher premiums for ordinary deposits to the state-run Deposit Insurance Corp. from April 1, the sources said.
Premiums for ordinary deposits are expected to rise to 0.094 percent of the outstanding deposit balance, up from the current 0.084 percent, making ordinary deposit operations costlier.
Some healthy regional banks, including Bank of Yokohama and Shizuoka Bank, have already cut ordinary deposit rates. Shizuoka Bank cut the rate to 0.001 percent.
DKB ATMs malfunction
Dai-Ichi Kangyo Bank said its nationwide automated teller machine network malfunctioned Monday due to technical problems, leaving customers unable to withdraw or deposit cash for about 45 minutes beginning at 8:55 a.m.
The problems were widespread, affecting people in Tokyo, Osaka, Nagoya and other areas.
Bank officials also said that while customers were able to make withdrawals and deposits from around 9:40 a.m., they were still unable to use ATMs to transfer funds.
DKB is preparing to integrate its computer system as it and two other Mizuho group banks — Fuji Bank and Industrial Bank of Japan — are to reorganize on April 1.
The cause of the trouble is under investigation, an official at DKB said.
DKB had 819 branches and outlets in Japan and about 3,000 ATMs at the end of September.
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