The troubled Incubator Bank of Japan filed for bankruptcy Friday at the Tokyo District Court after an overly ambitious expansion and a series of allegedly illegal transactions prompted its downfall.

The country's first bank failure in seven years is also the first case in which the government will limit its deposit guarantee to ¥10 million since the system was instituted in 1971.

Incubator Bank said it had net liabilities of ¥180.4 billion as of Aug. 31.