A former employee of Shinginko Tokyo, a bank mainly owned by the Tokyo Metropolitan Government, and five other people were indicted Nov. 17 on a charge of defrauding the bank of about ¥50 million. The former employee, from the bank's Ikebukuro branch, and the five allegedly forged accounting and other documents from a plumbing equipment company to complete an application for a loan of about ¥50 million in September 2006. There was no prospect of paying back the loan, and the bank employee received a ¥1 million commission fee.
This incident testifies to the bank's lack of scrutiny of borrower eligibility and employee behavior. Shinginko Tokyo began operations in April 2005, embodying Gov. Shintaro Ishihara's pet idea of assisting small and medium-size companies suffering from a credit crunch that had resulted from the financial crisis of the late 1990s.
The special feature of the bank's activities was to offer loans of up to ¥50 million without collateral or guarantors in about three days after a loan application was filed. For speedy processing, it used computers to examine loan application documents. The bank also made it a goal to provide outstanding loans and loan guarantees of ¥900 billion or more in three years after starting up. It is said that sales people of the bank were tasked with high sales quotas.