Corporate Information Creating The New Shoko Chukin

TOP > Creating The New Shoko Chukin:Overview of the Shoko Chukin Bank Limited Act

Overview of the Shoko Chukin Bank Limited Act

Objective of the New Shoko Chukin

Shoko Chukin’s objective is to conduct businesses necessary to facilitate financing for SME cooperatives,other organizations that primarily consist of SMEs and their members, while ensuring the Bank’s autonomy in management toward its goal of complete privatization.

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October 2008

  • The current Shoko Chukin Bank is to prepare a Transition Plan (the “Plan”) that describes the items to be stipulated in the Articles of Incorporation and the method of share allotment, notify its private shareholders of the Plan in advance and proceed with the organizational transition smoothly.
  • A large portion of the government’s contribution will be shifted to a special reserve as it is beneficial for the Bank to secure its financial soundness with abundant capital.

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Business

〔Measures to maintain the core of the Shoko Chukin Bank’s SME financing functions〕

  • Borrowers are primarily limited to SME cooperatives and their members.
  • The Bank will continue to issue bank debentures.
  • SME cooperatives will continue to conduct business as a proxy for the Bank.
  • The Bank will be governmentappointed financial institutions to undertake a special response should a crisis occur.

〔Measures to provide more diverse services to SMEs〕

  • Scope of eligible subordinate borrowers will be expanded.
    (Domestic subsidiaries of member companies, people taking over member companies’ businesses, etc.)
  • Relevant limitations on guaranty operations will be eliminated.
  • Regulations on subsidiary holdings will be clarified.
  • With the lifting of depositor eligibility restrictions, the Bank’s products will be covered by the deposit insurance system.
  • Restrictions on investment of surplus funds will be abolished.

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Government Oversight

  • Supervision by the minister in charge will be limited to the bare minimum.
  • The Bank is required to provide disclosure publications, including consolidated information on subsidiaries,and interim disclosure publications.

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At the Time of Complete Privatization

  • Approximately five to seven years after the act goes into effect, all of the government’s share will be disposed of while considering the market environment.
  • After complete liquidation of the government’s share, the act, which is a special act established for the transition period, will be abolished.
  • Restrictions on shareholder eligibility and other necessary measures will be to taken to maintain the Bank’s financial functions for SMEs.

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