Japan Post Bank’s unsecured-loan business plan gets government approval


The government on Monday approved Japan Post Bank’s application for a license to launch an unsecured loan operation targeting individual customers.

Details concerning the bank’s application had been screened by the Internal Affairs and Communications Ministry and the Financial Services Agency.

The banking unit of Japan Post Holdings Co. aims to strengthen its earnings capacity with the collateral-free lending, which is expected to generate relatively large interest income under the extremely low rate environment created by the Bank of Japan’s negative interest-rate policy, introduced in February 2016.

Japan Post Bank hopes to start the unsecured loan operation in the spring of 2019 in the form of an overdraft protection service, in which up to ¥500,000 will be automatically injected into deposit accounts with excessive withdrawals.

In issuing the license, Internal Affairs and Communications Minister Sanae Takaichi said she wants the bank to conduct the new business so as to improve the convenience of its customers and its corporate value.