Japan Post Holdings Co. Ltd. subsidiary Japan Post Bank Co. Ltd. is reconsidering its plan to enter the domestic loan market, the Asahi Shimbun reported Dec. 26.

Holding company President and CEO Masatsugu Nagato told reporters that Japan's economic situation is different from four years ago, when the bank applied for a lending license. He will decide on the matter by the end of March 2017.

The former state-owned group has functioned mainly as a postal, money deposit and insurance service provider, but has not been a money lender. In 2012, Japan Post Bank applied for a license to give out loans, but a license has not been issued since then.

Japanese banks' domestic margins have become very thin after the Bank of Japan adopted a negative interest rate policy in February.