Japan Net Bank was ordered Thursday to implement measures aimed at halting computer glitches and to improve its handling of computer-system malfunctions.
The Financial Services Agency issued the directive, the first of its kind targeting an Internet-only bank, under the Banking Law.
Computer problems at Japan Net Bank halted all transactions for about 22 hours on May 8 and 9. The bank’s trading system was also disrupted for half a day in January 2002.
The directive requires Japan Net Bank, if necessary, to draw up additional, elaborate preventative measures swiftly and submit a prospectus on them to the agency. The FSA is also demanding a progress report every three months.
The FSA said the action reflects its scrutiny of a report on the computer failure. The report cites the bank’s poor awareness of computer-system risks and its ineffective partnership with the firm overseeing system maintenance. The agency said the bank took as much as seven hours to detect the cause of the problem and that the automatic-switch function to a backup system did not work.
Japan Net Bank, which became operational in October 2000 as a unit of Sumitomo Mitsui Banking Corp., is the nation’s first Internet-only bank and has some 670,000 depositors.
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