8/84 NEW ACCOUNTS

Kyowa Bank from June 2, 1984 initiated a new account investing in national government bonds. It is an annuity type account and permits the interest to be withdrawn once every 3 months. It is expected to yield 6.5%

Daiwa Bank has also initiated a free-loan called "My Life" for people aged 20 to 65 with annual income of 4 million yen or more. They will be able to borrow up to 40% of their annual income up to 30 million yen. The loans must be secured by real estate loans or securities at 0.5% over the prime rate.

The Ministry of Finance has also decided to authorize credit unions to initiate loans to consumers by the end of June, 1984

Wako Securities Company and Mitsui Trust Bank have applied to launch a joint card service. Under this service it would be possible to transfer funds between Wako's medium term national government bond mutual fund and bank accounts at Mitsui Trust. Card services would be unified in one card. This combines Wako's cash card and Mitsui's credit cards. The mutual fund connection is similar to the tie-up between Yamaichi Securities and the Kyoto credit union but in Wako's case the minimum unit is 100,000 yen not 300,000 yen.-

In this relation the securities companies and the 63 local banks are negotiating a tieup to permit transfers between bank accounts and funds for securities purchases and sales, but there is difficulty in agreeing on transfer fees. Yamaichi has agreed to 200 yen per transfer, but the other securities firms want about 100 yen. The banks say that's too cheap. If an agreement is reached transfers will be possible among all local banks. The local banks have 6600 branches throughout Japan and about 10,000 cash dispensers. Yamaichi's service will start from July 16, 1984.

The securities industry also announced a similar tieup with mutual banks throughout the nation. This should start in September, 1984. Again the securities companies are pushing for a 100 yen per transaction service payment to the banks.

On the other hand, the Japan Federation of Local Banks has revealed that if the much-discussed money market certificates are introduced, their operating profits will fall by 11.1%

THE JAPAN LAWLETTER, August, 1984. By Roderick Seeman