Japan's Financial Services Agency will monitor the lending practice of merged regional banks to ensure they do not take advantage of greater local market share to charge higher interest rates, the Nikkei reported on Aug. 23.
The FSA plans to issue a business improvement order to any bank seen as charging higher rates due to stronger competitive position.
The move comes amid a wave of consolidation among regional banks, which have been hurt by ultra-low interest rates and dwindling population in the countryside. In July Bank of Yokohama Ltd. and Chiba Bank Ltd., two of Japan's biggest regional banks, announced a comprehensive alliance in a move that is expected to lead to more realignment in the sector.
