June 15 (Reuters) – The Bank of Japan said on Tuesday it will lend up to 3 trillion yen ($33 billion) to commercial banks in a new loan scheme aimed at redirecting money to industries with growth potential. [ID:nTOE65D05B]
Below are details of the new framework decided at a two-day policy meeting:
– The BOJ will lend up to 3 trillion yen to commercial banks at the overnight call rate, now at 0.1 percent, each for a maturity of one year. It also set a cap of 1 trillion yen for each loan disbursement, taking place once a quarter.
– The BOJ aims to launch the scheme by around the end of August this year. It will accept applications for the loans until March 31, 2012.
– The BOJ will allow commercial banks to roll over the loans by up to three times, meaning the maximum maturity of each loan will be four years.
– The BOJ has set a lending cap of 150 billion yen for each bank.
– The BOJ is targeting 18 areas with the new loan scheme: 1) Research and development, 2) Starting new businesses, 3) Business reorganisation, 4) Investment and business deployment in Asian and other countries, 5) Science and technology research at universities, 6) Social infrastructure, 7) Environment and energy, 8) Natural resources, 9) Healthcare, 10) Businesses serving the needs of senior citizens, 11) Content creation, 12) Tourism, 13) Regional and urban revitalisation, 14) Agriculture, forestry and fisheries, 15) Housing, 16) Disaster prevention, 17) Job support, and 18) Childcare.
(Details that were already released in May)
– The loans will be made against pooled collateral with the same standards applied as in the BOJ’s regular money market operations.
– The funds will be available to private banks that submit their plans to support industries with growth potential. (Reporting by Rie Ishiguro)