Government measures in key jurisdictions 3rd edition final - Flipbook - Page 80
Japan
On 8 May the FSA addressed the issue of property tenant SMEs and individuals facing difficulties in
paying rents and property related- business operators (e.g., hotels and other accommodation service
providers, leisure facility businesses, owners of buildings for rent, etc.) facing cash-flow problems due to
a decline in their incomes, by:
to support the cash-flow of borrowers who are such
tenants or property related-business operators by:
– promptly and flexibly implementing new or bridge loans, reducing principal and/or interest
payments or rescheduling repayment terms of existing loans,
– ensuring such implementation above especially where the borrowers are landlords who have granted
their tenants rent reductions or rescheduled rent payment terms,and
– considering not charging fees or penalties for changing terms of existing loans.
(real estate investment trusts and investment corporations)
to take flexible measures such as rent reductions or rescheduling rent payment terms with
tenants of properties under their management.
On 16 March the FSA relaxed the maximum lending limit per borrower under the Money Lending
Business Act.
On 27 May the FSA addressed the importance of private sector financial institutions’ loans (other
than those guaranteed by public credit guarantee associations) for supporting borrowers’ cash-flow,
requesting lenders to make utmost efforts to further ensure prompt and proper support measures
for borrowers, such as deferment of principal payments or relaxation of other loan conditions and
provision of new loans. The FSA also published the following matters to note:
• (i) If a financial institution had evaluated a borrower as being financially sound before the
pandemic, and the borrower is now facing a deterioration of business conditions due to the
pandemic, and the financial institution has now nevertheless decided to maintain the evaluation
as before in consideration of the likelihood of their post-corona recovery and effects of the
emergency economic package, the FSA will respect such decisions made by the financial
institution.
• (ii) The FSA and Local Finance Bureaus will monitor the balances of private financial institutions’
loans (other than those guaranteed by public credit guarantee associations) and conduct
hearings concerning the status of their support of borrowers’ cash-flow to check whether loan
balances are decreasing or not.
• (iii) Active use of borrowings recognisable as capital (borrowed money that is deemed to have
the nature of capital through the evaluation of borrowers and that can be treated as capital) is
recommended and the FSA will clarify this in its Guidelines for Supervision.
Regarding (v) above, on 27 May the FSA requested financial institutions to support borrowers by:
• (i) Actively offering support to customers by deferring principal payments for a sufficient period
of time or otherwise modifying loan conditions promptly depending on customers’ needs, and
refraining from charging fees for modification of loan conditions;
• (ii) putting in place telephone services dedicated for home loans or establishing consultation
offices both to be available even on holidays and to disseminate information on such services
broadly to help customers use them more easily;
• (iii) responding to customers’ concerns on other personal loans and flexibly modify loan
conditions based on customers’ needs.
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Government measures in key jurisdictions