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Suruga Bank banned from extending new property loans for 6 months

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Suruga Bank banned from extending new property loans for 6 months

Japan's financial regulator banned Suruga Bank Ltd. from extending new property loans for six months in the wake of a lending scandal, The Nikkei reported Oct. 5.

The Financial Services Agency also directed the regional bank to file a business improvement plan by the end of November. The temporary ban does not prevent the lender from offering over-the-counter services, including repayment of deposits.

The penalty came after the FSA found that Suruga Bank provided inappropriate loans to borrowers based on forged documents. Further, it previously said that improper lending at the bank was widespread and its governance functions had failed.