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Laws of Japan |
Order Providing for the Categories, etc. Prescribed in Article 26, Paragraph (2) of the Banking Act
(Ordinance of the General Administrative Agency of the Cabinet and the
Ministry of Finance No. 39 of June 26, 2000)
In accordance with the enforcement of a part of the Enforcement Act of the
Relevant Act on the Reorganization of Central Government Ministries (Act No.
160 of 1999), based on the provisions of Article 26, paragraph (2) of the Banking Act (Act No. 59 of 1981); Article 52-17, paragraph
(2); Article 53, paragraph (1), item (viii); and Article 57-3, the order providing for categories, etc. as prescribed in Article
26, paragraph (2) of the Banking Act shall be as follows.
(Categories Pertaining to the Adequacy of Equity Capital and their
Corresponding Orders)
Article 1 (1) The categories pertaining to the adequacy of a bank's equity capital to be provided for by Cabinet Office Ordinance
and an Ordinance of the
Ministry of Finance under Article 26, paragraph (2) of the Banking Act
(hereinafter referred to as the "Act") and orders provided for by Cabinet Office
Ordinance and Ordinance of the Ministry of Finance corresponding to said
categories shall be as shown in the following table, excluding cases provided for in the next Article.
Category 1 | Non- consolidated capital adequacy ratio pertaining to the uniform international standard: 4% or more and less than 8% | Non- consolidated capital adequacy ratio pertaining to the standard in Japan: 2% or more and less than 4% | Request to submit a reasonable improvement plan (which includes measures pertaining to capital enhancement in principle) to secure sound management, and an order for its implementation |
Category 2 | Non- consolidated capital adequacy ratio pertaining to the uniform international standard: 2% or more and less than 4% | Non- consolidated capital adequacy ratio pertaining to the standard in Japan: 1% or more and less than 2% | An order pertaining to any of the following measures which contribute to equity capital adequacy: (i) submission of a reasonable capital enhancement plan and its implementation; (ii) prohibition from providing dividends or bonuses to directors or reduction of such dividends or bonuses; (iii) reduction of total assets or reduction of increases; (iv) prohibition or restriction of acceptance of deposit or installment savings, etc. under conditions which are found to provide disadvantages compared to the regular conditions of a transaction; (v) reduction of functions at some business offices; (vi) elimination of some business offices, excluding the head office; |
(vii) reduction of the functions listed in any item under Article 10, paragraph (2) of the Act and other functions incidental to the banking business, functions to be carried out pursuant to the provisions of Article 11 of the Act, functions to be carried out pursuant to the Secured Bond Trust Act (Act No. 52 of 1905) and other Acts, or prohibition from handling new business; (viii) other measures deemed necessary by the Commissioner of the Financial Services Agency. | |||
Category 2-2 | Non- consolidated capital adequacy ratio pertaining to the uniform international standard: 0% or more and less than 2% | Non- consolidated capital adequacy ratio pertaining to the standard in Japan: 0% or more and less than 1% | After selecting any measure intended to ensure the adequacy of equity capital, drastically reduce business, merge, or eliminate, etc. banking functions, an order to implement a measure pertaining to said selection |
Category 3 | Non- consolidated capital adequacy ratio pertaining to the uniform international standard: less than 0% | Non- consolidated capital adequacy ratio pertaining to the standard in Japan: less than 0% | An order to suspend all business or a portion thereof |
(2) The categories pertaining to the adequacy of a bank's or a bank subsidiary company, etc.'s equity capital (which means
a subsidiary company, etc. as
prescribed in Article 14-2, item (ii) of the Act; hereinafter the same shall apply
in this paragraph and the next Article) to be provided for by Cabinet Office
Ordinance and an Ordinance of the Ministry of Finance as prescribed in Article
26, paragraph (2) of the Act and orders provided for by Cabinet Office
Ordinance and Ordinance of the Ministry of Finance in accordance with said
categories shall be as shown in the following table, excluding cases provided for in the next Article.
Category pertaining to the adequacy of equity capital | Order | ||
A bank or its subsidiary company, etc. that has overseas business locations | A bank or its subsidiary company, etc. that does not have overseas business locations | Order | |
Exception of category | Consolidated capital adequacy ratio pertaining to the uniform international standard: 8% or more | Consolidated capital adequacy ratio pertaining to the standard in Japan: 4% or more | |
Category 1 | Consolidated capital adequacy ratio pertaining to the uniform international standard: 4% or more and less than 8% | Consolidated capital adequacy ratio pertaining to the standard in Japan: 2% or more and less than 4% | Request to submit a reasonable improvement plan (which includes a measure pertaining to capital enhancement in principle) to secure sound management, and an order of its implementation |
Category 2 | Consolidated capital adequacy ratio pertaining to the uniform international standard: 2% or more and less than 4% | Consolidated capital adequacy ratio pertaining to the standard in Japan: 1% or more and less than 2% | An order pertaining to a measure contributing to capital adequacy listed in any of the following items: (i) submission of a reasonable capital enhancement plan and its implementation; (ii) prohibition from providing dividends or bonuses to directors or reduction of such dividends or bonuses; (iii) reduction of total assets or reduction of increases; |
(iv) prohibition or restriction of acceptance of deposit or installment savings, etc. under conditions which are found to provide disadvantages compared to the regular conditions of a transaction; (v) reduction of functions at some business offices; (vi) elimination of some business offices, excluding the head office; (vii) reduction in the functions of a subsidiary company, etc.; (viii) disposition of shares or equity of a subsidiary company, etc.; (ix) reduction of the functions listed in any item under Article 10, paragraph (2) of the Act and other functions incidental to the banking business, functions to be carried out pursuant to the provisions of Article 11 of the Act, functions to be carried out pursuant to the Secured Bond Trust Act and other Acts, or prohibition from handling a new business; (x) other measures deemed necessary by the Commissioner of the Financial Services Agency. | |||
Category 2-2 | Consolidated capital adequacy ratio pertaining to the uniform international standard: 0% or more and less than 2% | Consolidated capital adequacy ratio pertaining to the standard in Japan: 0% or more and less than 1% | After selecting any measure intended to ensure equity capital adequacy, drastically reduce business, merge, or eliminate, etc. banking functions, an order to implement a measure pertaining to said selection |
Category
3
Consolidated capital
adequacy ratio
pertaining to the uniform
international
standard:
capital
adequacy ratio pertaining to
the standard in
Japan:
An order to suspend all business or a portion thereof
less than 0% less than 0%
(3) The term "Overseas Business Base" as used in the tables under the preceding two paragraphs means a branch office located
in a foreign state or a company
(limited to a subsidiary company of a bank) listed in Article 16-2, paragraph (1), item (v) of the Act, which has full-time officer(s)
or employee(s) at the location.
(4) The term "Uniform International Standard" as used in the tables under
paragraphs (1) and (2) means a standard (hereinafter referred to as the
"Standard of Capital Adequacy Ratio" in this Article) pertaining to a bank which has an Overseas Business Base (which means
an Overseas Business Base as prescribed in the preceding paragraph; the same shall apply in the
next paragraph) among those listed in any of the items under Article 14-2 of the Act.
(5) The term "Standard In Japan" as used in the tables under paragraphs (1) and (2) means Capital Adequacy Ratio Standard
pertaining to a bank which does not have an Overseas Business Base.
(6) The term "Installment Savings, Etc." as used in the tables under paragraphs
(1) and (2) means installment savings, etc. as prescribed in Article 2, paragraph (4) of the Act.
(7) The term "Non-Consolidated Capital Adequacy Ratio" as used in the tables
under paragraph (1) means a ratio obtained based on the formula pertaining to a standard listed in Article 14-2, item (i) of the Act
within the Capital
Adequacy Ratio Standard.
(8) The term "Consolidated Capital Adequacy Ratio" as used in the table under paragraph (2) means a ratio obtained based
on the formula pertaining to a
standard listed in Article 14-2, item (ii) of the Act within the Capital Adequacy
Ratio Standard.
Article 2 (1) In cases where a bank learns that its Capital Adequacy Ratio
(which means the Non-Consolidated Capital Adequacy Ratio as prescribed in paragraph (7) of the preceding Article or the Consolidated
Capital Adequacy
Ratio as prescribed in paragraph (8) of the same Article; hereinafter the same shall apply in this Article) decreased lower than the
range of the Capital
Adequacy ratio pertaining to the categories in the tables in paragraphs (1) and
(2) of the preceding Article under which said bank or said bank and its
subsidiary company, etc. used to fall and submits without delay to the
Commissioner of the Financial Services Agency a plan found to be reasonable to improve the Capital Adequacy Ratio certainly to exceed
the range of the
Capital Adequacy Ratio pertaining to the category of these tables to which said bank or said bank and its subsidiary, etc. correspond,
then, an order in
accordance with said category with regard to said bank, shall be an order listed
in the category (except for exceptions from categories) in these tables
corresponding to which is more than the Capital Adequacy Ratio of said bank or said bank and its subsidiary company, etc. and less
than the Capital
Adequacy Ratio to be expected after implementation of said plan; provided, however, that in cases where said plan is found to be unreasonable,
with regard to said bank, an order pertaining to the categories of these tables to
which said bank or said bank and its subsidiary company, etc. correspond shall
be prescribed in paragraphs (1) and (2) of the same Article.
(2) In cases where the total of the amount to be recorded in the column of assets (with regard to assets listed in any of following
items, it shall be the value as determined in said items; the same shall apply in the next paragraph) of a
balance sheet of a bank which corresponds to Category 3 of the tables in
paragraph (1) or (2) of the preceding Article or a consolidated balance sheet of
a bank and its subsidiaries, etc. exceeds or is expected to exceed the total of the amount to be recorded in the column of liabilities
of these balance sheets, with regard to said bank, an order in accordance with said category shall include an order listed in Category
2-2 of the tables in paragraph (1) or (2) of the same
Article:
(i) securities: a value calculated based on the closing price which is published on the date to calculate the Capital Adequacy Ratio
(hereinafter referred to as the "Calculation Day" in this paragraph) or a value calculated by a
reasonable method equivalent to this;
(ii) tangible fixed assets: a value calculated based on the appropriately appraised value on the Calculation Day;
(iii) assets other than the assets listed in the preceding two items with a book value significantly different from the appraised
value on the Calculation
Day: said appraised value.
(3) In cases where the total of amount to be recorded in the column of assets of a balance sheet of a bank or of a consolidated balance
sheet of a bank and its
subsidiaries, etc., which corresponds to a category other than Category 3 of the
tables in paragraph (1) or (2) of the preceding Article is or is expected to be below the total of the amount to be recorded in the
column of liabilities on
these balance sheets, an order corresponding said category shall include an
order listed under Category 3 of the tables in paragraph (1) or (2) of the same
Article.
(4) In cases where a bank corresponds to a relieving financial institution as
prescribed in Article 59, paragraph (1) of the Deposit Insurance Act (Act No. 34 of 1971) which conducted a merger, etc. as prescribed
in paragraph (2) of the same Article pertaining to confirmation of eligibility, etc. as prescribed in
Article 65, an order with regard to said bank in accordance with a category of
the tables in paragraph (1) or (2) of the preceding Article to which said bank or said bank and its subsidiary company, etc. correspond
shall be an order listed under the categories of these tables pertaining to the Capital Adequacy Ratio
at and more than Capital Adequacy Ratio of said bank or said bank and its
subsidiary company, etc.
(5) In cases where a bank is an agreement bank as prescribed in Article 7, paragraph (1), item (i) of the Supplementary Provision
to the Deposit
Insurance Act, an order with regard to said bank in accordance with a category in the tables under paragraph (1) or (2) of the preceding
Article to which said bank or said bank and its subsidiary bank, etc. correspond shall be an order
listed as an exception to the categories in these tables.
(Categories Pertaining to the Adequacy of Equity Capital of a Bank Holding
Company and its Subsidiary Company, etc. and their Corresponding Orders) Article 3 (1) The categories pertaining to the adequacy
of equity capital to be
provided for by Cabinet Office Ordinance and an Ordinance of the Ministry of
Finance under Article 52-33, paragraph (2) of the Act and orders provided for by Cabinet Office Ordinance and an Ordinance of the
Ministry of Finance in
accordance with said categories shall be as shown in the following table
excluding cases provided for in the next Article.
Category pertaining to the equity capital adequacy | Order | ||
A bank holding company or its subsidiary company, etc. that holds a bank, etc. with overseas business locations as a subsidiary company | A bank holding company or its subsidiary company, etc. that does not hold a bank, etc. with overseas business locations as a subsidiary company | Order |
Exception of category | Consolidate d capital adequacy ratio pertaining to standard 1: 8% or more | Consolidate d capital adequacy ratio pertaining to standard 2: 4% or more | |
Category 1 | Consolidate d capital adequacy ratio pertaining to standard 1: 4% or more and less than 8% | Consolidate d capital adequacy ratio pertaining to standard 2: 2% or more and less than 4% | Request to submit a reasonable improvement plan (which includes measures pertaining to capital enhancement in principle) to secure sound management of a bank holding company and its subsidiary company, etc. and an order for its implementation |
Category 2 | Consolidate d capital adequacy ratio pertaining to standard 1: 2% or more and less than 4% | Consolidate d capital adequacy ratio pertaining to standard 2: 1% or more and less than 2% | An order pertaining to a measure contributing to the equity capital adequacy of a bank holding company and its subsidiary, etc. listed in any of the following items: (i) submission of a reasonable plan pertaining to capital enhancement of a bank holding company and its subsidiary, etc. and its implementation; (ii) prohibition from providing dividends or bonuses to directors at a bank holding company or reduction of such dividends or bonuses; (iii) reduction of total assets or reduction of increases at a bank holding company; (iv) disposition of shares or equity of a subsidiary company, etc. (except for a bank, etc.); (v) other measures deemed necessary by the Commissioner of the Financial Services Agency. |
Category 2-2 | Consolidate d capital adequacy ratio pertaining to standard 1: 0% or more and less than 2% | Consolidate d capital adequacy ratio pertaining to standard 2: 0% or more and less than 1% | After selecting any measure intended to ensure equity capital adequacy, merge, or dispose of, etc. shares of a subsidiary company, etc. (limited to a bank, etc.) for a bank holding company or its subsidiary company, etc., an order to implement the measure pertaining to said selection |
Category 3 | Consolidate d capital adequacy ratio pertaining to standard 1: less than 0% | Consolidate d capital adequacy ratio pertaining to standard 2: less than 0% | Disposition of shares of a subsidiary company, etc. (limited to a bank, etc.) |
(2) The term "Overseas Business Base" as used in the table under the preceding paragraph means a branch office located in
a foreign state or a company
(limited to a bank subsidiary company) listed in Article 16-2, paragraph (1), item (v) of the Act, which has full-time officer(s)
or employee(s) at the location.
(3) The term "Standard 1" as used in the table under paragraph (1) means a
Consolidated Capital Adequacy Ratio Standard (which means a standard as
prescribed in Article 52-25 of the Act; hereinafter the same shall apply in the next paragraph) pertaining to a bank holding company
and its subsidiary
company, etc. that holds a bank, etc., which has an Overseas Business Base
(which shall mean an Overseas Business Base as prescribed in the preceding paragraph; the same shall apply in the next paragraph),
as a subsidiary
company.
(4) The term "Standard 2" as used in the table of paragraph (1) means a
Standard of Consolidated Capital Adequacy Ratio pertaining to a bank holding company and its subsidiary company, etc. that do not
hold a bank, etc., which
has an Overseas Business Bases, as a subsidiary company.
(5) The term "Bank, Etc." as used in this Article means a bank or a long term credit bank.
(6) The term "Subsidiary Company, Etc." as used in this Article and the next
Article means a subsidiary company, etc. as prescribed in Article 52-25 of the
Act.
Article 4 (1) In cases where a bank holding company learns that the
Consolidated Capital Adequacy Ratio of said bank holding company and its subsidiary, etc. decreased lower than the range of the Consolidated
Capital
Adequacy Ratio pertaining to the category of the table in paragraph (1) of the preceding Article under which said bank holding company
and its subsidiary
company, etc. used to fall and submits without delay to the Commissioner of the Financial Services Agency a plan found to be reasonable
to improve said Consolidated Capital Adequacy Ratio certainly to exceed the scope of the
Consolidated Capital adequacy ratio pertaining to the category of the same table to which said bank holding company and its subsidiary
company, etc.
correspond, an order with regard to said bank holding company in accordance with said category shall be an order listed in the category
(except for
exceptions from categories) in the same table pertaining to a Consolidated
Capital Adequacy Ratio which is more than the Consolidated Capital Adequacy
Ratio of said bank holding company and its subsidiary company, etc. and less than the Consolidated Capital Adequacy Ratio to be expected
after
implementation of said plan; provided, however, that in cases where said plan is found to be unreasonable, an order with regard to
said bank holding
company pertaining to the category of the same table to which said bank
holding company and its subsidiary company, etc. correspond shall be as prescribed in the same paragraph.
(2) In cases where the total of the amount to be recorded in the column of assets
(with regard to assets listed in any of the following items, it shall be the value as determined in said items; the same shall apply
in the next paragraph) of the consolidated balance sheet of a bank holding company and its subsidiary
company, etc. which corresponds to Category 3 of the table in paragraph (1) of
the preceding Article exceeds or is expected to exceed the total of the amount to be recorded in the column of liabilities of said
balance sheet, an order with
regard to said bank holding company in accordance with said category shall include an order listed in Category 2-2 of the same table:
(i) securities: a value calculated based on the closing price which is published
on the date (hereinafter referred to as "Calculation Day" in this paragraph)
to calculate the Consolidated Capital Adequacy Ratio or a value calculated by a reasonable method equivalent to it;
(ii) tangible fixed assets: a value calculated based on an appropriate evaluation value on the Calculation Day;
(iii) assets other than the assets listed in the preceding two items with a book
value significantly different from the appraised value on the Calculation
Day: said appraised value.
(3) In cases where the total of amount to be recorded under the column of assets of a consolidated balance sheet of a bank holding
company and its subsidiary company, etc., which corresponds to a category other than Category 3 of the
table in paragraph (1) of the preceding Article is or is expected to be below the total of the amount to be recorded under the column
of liabilities of said
balance sheet, an order with regard to said bank holding company in
accordance with said category shall include an order listed in Category 3 of the same table.
(4) When falling under any of the following cases, an order with regard to a bank
holding company in accordance with the category of the table in paragraph (1)
of the preceding Article, to which said bank holding company and its subsidiary company, etc. correspond, shall be an order listed
in the category of the same
table pertaining to the Consolidated Capital Adequacy Ratio which is or more than the Consolidated Capital Adequacy Ratio of said
bank holding company and its subsidiary company, etc.
(i) in cases where said bank holding company corresponds to a relieving bank
holding company, etc. prescribed in Article 59, paragraph (1) of the Deposit
Insurance Act, which conducted a merger, etc. prescribed in paragraph (2) of the same Article pertaining to confirmation of eligibility,
etc. prescribed in
Article 65 of the same Act;
(ii) in cases where a subsidiary company of said bank holding company corresponds to a relieving financial institution prescribed
in Article 59,
paragraph (1) of the Deposit Insurance Act, which conducted a merger, etc.
prescribed in paragraph (2) of the same Article pertaining to confirmation of eligibility, etc. prescribed in Article 65 of the same
Act.
(Matters to be Notified)
Article 5 The Cases to be provided for by Cabinet Office Ordinance and an
Ordinance of the Ministry in Finance of Article 53, paragraph (1), item (viii) of the Act shall be listed in the following:
(i) in cases where the commencement of bankruptcy proceedings has been ordered, an appeal is made against the commencement of bankruptcy
proceedings, or a ruling against the appeal has been rendered by a court;
(ii) in cases where a petition for commencement of rehabilitation proceedings has been filed, a ruling to approve a rehabilitation
plan has become final and binding, or the rehabilitation plan has become invalid;
(iii) in cases where a petition for the commencement of reorganization
proceedings has been filed, a ruling to approve a reorganization plan has become final and binding, or the reorganization plan has
become invalid.
(Notification of the Finance Minister)
Article 6 Notification provided for by Cabinet Office Ordinance or an Ordinance of the Ministry of Finance as prescribed in Article
57-6 of the Act shall be the notification to be given in any case listed in any item under the preceding
Article.
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