The Incubator Bank of Japan restarted operations Monday at the last of its 60 branches that were closed down about two weeks ago when it filed for bankruptcy protection.
The bank’s other roughly 40 branches had already been reopened. It will continue to refund depositors over the counter or by mail under the deposit protection scheme, which caps the value of refund payments at ¥10 million.
The Deposit Insurance Corp. of Japan, acting as government-appointed administrator, said the bank as of last Wednesday had received applications for refunds totaling ¥45.3 billion from depositors seeking to close their accounts.
The applications cover 7.8 percent of the bank’s total deposits of ¥582 billion when it failed Sept. 10. The DIC said there have not been massive withdrawals because interest earned may end up lower if depositors rush to cancel their time deposits before maturity.
The bank is undergoing Civil Rehabilitation Law proceedings. All of its deposits and normalized loans will be moved within eight months to a bridge bank fully funded by the DIC. A selection of sponsors will then follow.
Incubator Bank’s bad loans expanded after buying loan assets from a bankrupt money lender.
The deposit protection scheme was invoked for the first time ever in this case.
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