The government on Friday ordered regional lender Suruga Bank to suspend its real estate financing operations for six months after a spate of improper housing loans, including forgeries of income documents.
The Financial Services Agency ordered the bank to halt loans for purchases of investment-purpose real estate from Oct. 12 until April 12, the first issuance of a business suspension order to a Japanese bank since 2013, when Mizuho Bank was punished over its involvement in transactions with members of organized crime groups.
The agency judged that the bank, based in Shizuoka Prefecture, had "flaws in governance" after a third-party committee of lawyers recognized the management's involvement in improper loan screenings in a report in September. The regulator also ordered the bank to compile a business improvement plan by November.