Financial Services Minister Hakuo Yanagisawa expressed hope Tuesday that financial institutions will introduce a new settlement-specific bank account next April whose deposits are fully protected by the government, although doing so is not mandatory.
"I hope financial institutions will live up to our expectations" by introducing the new account, Yanagisawa told a news conference.
A working group of the Financial System Council compiled a report Monday that proposed the new account to allay the concerns of depositors who fear the refund cap will leave their funds at risk of loss in the event of a bank failure. The cap will be imposed next April 1 on ordinary deposits and other types of liquid bank savings in the second phase of modifications to the deposit insurance system.
Yanagisawa said financial institutions are not legally bound to introduce the new account and that it is up to them whether to do so.
On April 1 the government imposed a cap of 10 million yen per bank per depositor on time deposits it is obligated to reimburse in the event of a bank failure.
The government had planned to impose a similar cap on all types of deposits starting next April 1, but it plans to exempt corporate checking accounts and the new type of account, which is aimed at general depositors.