The Financial Services Agency said Wednesday it has decided to inject public capital into two regional banks this month.
It will pour ¥35 billion into Towa Bank in Gunma Prefecture and ¥15 billion into the Bank of Kochi in Kochi Prefecture.
The FSA made the decision based on the financial function enhancement law that was revised last year to facilitate capital injections into banks to ease a credit crunch amid the global financial crisis.
Under the revised law that took effect in December 2008, the government has provided public capital to seven regionals, including North Pacific Bank in Hokkaido and Michinoku Bank in Aomori Prefecture.