Regulator launches probe into Japanese regional banks internal audit

The move comes after a bank was alleged to have charged customers illicit commissions.

Reuters reports that Japan’s financial watchdog has launched onsite inspections to monitor the internal auditing activities of the country’s struggling regional banks.

Also read: Lower core lending and fees hit profits of Japanese regional banks

The move comes after a regional bank was alleged to have been charging customers illicit commissions on top of loan interest due to lack of sufficient internal auditing frameworks, prompting the Financial Services Authority to issue a business improvement order against the offending bank.

Also read: Japanese regional banks form fintech joint venture in bid for survival

The regulators are urging regional banks, who face a profit crunch brought about by the ultra-low interest rate environment, to beef up their their internal auditing function so that it can put a proper check on management, the source told Reuters.

Here’s more from Reuters:

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