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Principal Terms and Conditions for the Fund-Provisioning Measure to Stimulate Bank Lending Conducted through the Loan Support Program

December 20, 2012

Revision: February 18, 2014
March 11, 2014
March 17, 2015
January 29, 2016
March 15, 2016
January 31, 2017
January 23, 2018
January 23, 2019
June 20, 2019
December 19, 2019
January 21, 2021
January 18, 2022

1. Purpose

The terms and conditions prescribe the principles for the Bank of Japan's fund-provisioning measure to stimulate bank lending conducted through the Loan Support Program set forth in the "Principal Terms and Conditions for the Loan Support Program" (Policy Board Decision on December 20, 2012), with a view to promoting private financial institutions' aggressive action and helping increase proactive credit demand of firms and households.

2. Location of Operations

The Bank's Head Office (Operations Department) or its branches.

3. Eligible Counterparties

  1. (1) Eligible counterparties shall, pursuant to the Bank's relevant rules, be selected from financial institutions (as defined in Article 37, Paragraph 1 of the Bank of Japan Act, Act No. 89, 1997) and the Development Bank of Japan Inc. satisfying the eligibility criteria listed below.
    1. (a) To have a current account at the Bank.
    2. (b) To be deemed sufficiently creditworthy in light of its capital condition and other relevant information obtained through the Bank's on-site examinations and so forth.
  2. (2) If the Bank specifically deems it necessary in order to operate the Loan Support Program smoothly, it can implement such measures as an exclusion of the institution in question from eligible counterparties.

4. Form of Loans

Loans shall be provided in the form of electronic lending.

5. Duration of Loans

The duration of loans to financial institutions shall be set as within four years.

6. Interest Rate on Loans

The interest rate on loans shall be 0.1 percent per annum.

7. Date of Each Loan Disbursement

The date of each loan disbursement shall be specified by the Bank. No loan shall be disbursed after June 30, 2023.

8. Amount of Each Loan

The amount of each loan shall be the amount the counterparty wishes to borrow, provided that it shall not exceed the maximum amount of loans prescribed in 9. or 10. and the unused value of the total standing pool of eligible collateral pledged to the Bank.

9. Rollover of Loans

If the counterparty requests, the Bank shall allow either all or a part of loans to be rolled over on the maturity date of initially-disbursed loans, provided that the amount of loans shall not exceed the maximum amount prescribed below.

  1. (1) If the average of the month-end amounts outstanding of lending prescribed in 10.(1) regarding newly-disbursed loans (loans other than rollover loans, hereinafter the same) whose date of loan disbursement is the same as the date of rollover (hereinafter referred to as "the average of the month-end amounts outstanding at maturity") is equal to or larger than the average of the month-end amounts outstanding of lending prescribed in 10.(1) regarding initially-disbursed loans (hereinafter referred to as "the average of the month-end amounts outstanding at the initial loan disbursement"), the maximum amount of loans shall be the amount of repayment of initially-disbursed loans.
  2. (2) If the average of the month-end amounts outstanding at maturity is smaller than the average of the month-end amounts outstanding at the initial loan disbursement, the maximum amount of loans shall be the amount calculated by subtracting the difference between the average of the month-end amounts outstanding at maturity and the average of the month-end amounts outstanding at the initial loan disbursement from the amount of repayment of initially-disbursed loans.

10. Maximum Amount of Newly-Disbursed Loans

The maximum amount of newly-disbursed loans to each counterparty at each loan disbursement shall be twice as much as the amount calculated by subtracting the amount in (2) from the amount in (1). Housing loans in the trust property of eligible beneficial interest of a trust in housing loans submitted to the Bank as collateral pursuant to the "Collateral Guidelines on Eligible Beneficial Interest of a Trust in Housing Loans" (Policy Board Decision on March 15, 2016) shall be regarded as the counterparty's lending.

  1. (1) Average of the month-end amounts outstanding of lending of each counterparty during a quarter specified by the Bank for each loan disbursement.
  2. (2) Maximum of the quarterly averages of the month-end amounts outstanding of lending, from the quarter of October-December of 2012 to the last quarter before the one stipulated in (1).

11. Prepayment

The counterparty may prepay all or a part of the outstanding amount of loans on an annual basis on a day specified by the Bank.

12. Collateral

  1. (1) The Bank shall accept eligible collateral from counterparties in advance.
  2. (2) The "Guidelines on Eligible Collateral" (Policy Board Decision on October 13, 2000) and the "Collateral Guidelines on Eligible Foreign Bonds" (Policy Board Decision on May 22, 2009) shall apply to the collateral for the loans.

Supplementary Provision

These terms and conditions shall become effective today and shall be valid through June 30, 2027.