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Principal Terms and Conditions of the Interest Scheme to Promote Lending

日本語

March 19, 2021

Revision : September 22, 2021
December 17, 2021
June 16, 2023
March 19, 2024

1. Purpose

These terms and conditions prescribe the principles of interest on current account balances (hereinafter referred to as "CABs") based on the amount of loans that the Bank of Japan provides to support private financial institutions' efforts in lending or investment, with a view to further promoting their efforts.

2. Eligible Institutions

Institutions shall be the eligible counterparties of the loans listed from (1) to (5) below and shall have no obstacles to become eligible.

  1. (1) Loans denominated in Japanese yen under the "Principal Terms and Conditions for the Fund-Provisioning Measure to Support Strengthening the Foundations for Economic Growth Conducted through the Loan Support Program" (Policy Board Decision on June 15, 2010) (hereinafter referred to as "Fund-Provisioning Measure to Support Strengthening the Foundations for Economic Growth")
  2. (2) Loans under the "Principal Terms and Conditions for the Fund-Provisioning Measure to Stimulate Bank Lending Conducted through the Loan Support Program" (Policy Board Decision on December 20, 2012) (hereinafter referred to as "Fund-Provisioning Measure to Stimulate Bank Lending")
  3. (3) Deletion
  4. (4) Loans under the "Principal Terms and Conditions for the Funds-Supplying Operation to Support Financial Institutions in Disaster Areas" (Policy Board Decision on March 16, 2020) (hereinafter referred to as "Funds-Supplying Operation to Support Financial Institutions in Disaster Areas")
  5. (5) Loans under the "Principal Terms and Conditions of the Funds-Supplying Operations to Support Financing for Climate Change Responses" (Policy Board Decision on September 22, 2021) (hereinafter referred to as "Climate Response Financing Operations")

3. Applied Interest Rate and Amount to Which Interest is Applied

The amount of CABs corresponding to the loans provided through the operations listed from Paragraph 2. (1) to (5) above falls under one of the three categories: Category I, II, or III, for which the applied interest rate is 0.2 percent, 0.1 percent, and 0 percent per annum, respectively. The amounts to which interest is applied are listed from (1) to (3) below.

  1. (1) Amount for Category I
    Zero
  2. (2) Amount for Category II
    Zero
  3. (3) Amount for Category III
    The average amount of CAB during the reserve maintenance period (as defined in Article 7, paragraph 3 of the Law Concerning Reserve Deposit Requirement System [Law No.135, 1957, hereinafter referred to as the "Law"]) for which interest is calculated (hereinafter referred to as the "Designated Reserve Maintenance Period" or "DRMP") subtracted by the amount of required reserve per day (as prescribed in Article 2, paragraph 2 of the Law), the amount for Category I, and the amount for Category II (excluding the case where the subtracted amount is negative), up to the sum of the average amounts each day during the DRMP listed from (a) to (e) below
    1. (a) The amount outstanding of borrowings under the "Fund-Provisioning Measure to Support Strengthening the Foundations for Economic Growth"
    2. (b) The amount outstanding of borrowings under the "Fund-Provisioning Measure to Stimulate Bank Lending"
    3. (c) Deletion
    4. (d) The amount outstanding of borrowings under the "Funds-Supplying Operation to Support Financial Institutions in Disaster Areas"
    5. (e) The amount outstanding of borrowings under the "Climate Response Financing Operations"

4. Calculation of Interest

The interest each eligible institution receives is calculated for each DRMP based on the eligible amount and the applied interest rate for each category stipulated in Paragraph 3.

5. Exception

If the Bank specifically deems it practically necessary in order to conduct market operations smoothly, in accordance with the purpose of the interest scheme to promote lending, the Bank can make exceptions to the terms and conditions stipulated from Paragraph 2. to Paragraph 4. above.

(Supplementary Provision)

  1. These terms and conditions shall become effective today and shall be applied to the calculation of interest for the reserve maintenance period starting on or after April 16, 2021.
  2. Loans in Category III shall include those under the "Principal Terms and Conditions for the Funds-Supplying Operation to Support Financial Institutions in Disaster Areas" (Policy Board Decision on April 28, 2011) and the "Principal Terms and Conditions for the Funds-Supplying Operation to Support Financial Institutions in Disaster Areas of the 2016 Kumamoto Earthquake" (Policy Board Decision on April 28, 2016) until all of the loans disbursed to the counterparties have reached maturity.
  3. Interest payment under these terms and conditions shall be suspended from the reserve maintenance period starting on April 16, 2024.