Japan's financial watchdog to discipline Concordia regional bank unit: source

© Reuters. FILE PHOTO: Women walk under a sign of Japan's Financial Services Agency in Tokyo, Japan© Reuters. FILE PHOTO: Women walk under a sign of Japan’s Financial Services Agency in Tokyo, Japan

TOKYO (Reuters) – Japan’s Financial Services Agency is set to issue business improvement orders against a subsidiary unit of Concordia Financial Group Ltd (T:) over illicit commissions and other breaches, a government source with direct knowledge of the matter said.

The FSA has been conducting on-site inspections at the regional bank, Higashi-Nippon Bank Ltd, since late 2017, looking into the its lending practices, the source said on Friday.

The financial watchdog assessed the regional bank as lacking an adequate system to screen lending and had ineffective governance, the source said on condition of anonymity as he was not authorized to speak to media.

The financial regulator aims to clarify business responsibility and strengthen internal controls at the bank through improvement orders, the source added.

Concordia shares slid more than 7 percent after domestic media reported that financial regulators would discipline Higashi-Nippon Bank for improper lending.

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