TOKYO (Reuters) - Japanese Finance Minister Taro Aso said on Friday he did not believe the central bank’s negative interest rate policy was behind a megabank’s decision to consider implementing fees on some banking services.
Aso made the comment after Mitsubishi UFJ Financial Group (8306.T) (MUFG) confirmed it was weighing such a move, following a report in the Nikkei business daily that the bank was considering fees on dormant accounts and other services.
Years of the central bank’s heavy money printing have failed to fire up inflation and crushed long-term interest rates near zero, drawing criticism from financial institutions for narrowing their margins and hurting their profits.
Asked whether ill-effects of the Bank of Japan’s negative interest rate policy were affecting individuals through deterioration in financial institutions’ profits, Aso said: “I’m not aware of that.”
“It costs a certain amount of fees to manage dormant accounts, In that sense, just because some bank is considering imposing fees, that doesn’t immediately mean that something’s wrong with bank management,” he told reporters after a cabinet meeting.
Low interest rates have made it difficult for regional banks, who face a declining population in their regions, to rely on conventional bank management that counts on interest rate differentials.
However, Aso said: “I don’t think (the case of) such a big bank as Mitsubishi was caused by low interest rates.”
Reporting by Tetsushi Kajimoto; Editing by Chang-Ran Kim and Muralikumar Anantharaman