Fair Trade Handbook for Banks Revised (only in Japanese)

JBA revised the Fair Trade Handbook for Banks (produced in June 1992) and published it on June 20.

The aim of the update is to represent developments that have occurred since the last revision in June 2002. These developments include the partial amendment in January 2006 of the Anti-Monopoly Law (revision to the surcharge system), the partial amendment in April 2006 of the Banking Law (prohibition on providing customers with false information), and the recommendation of the Fair Trade Commission in December 2005 for eliminating unfair trade practices related to financial derivatives (abuse of superior position in transactions).

The Handbook specifically addresses the abuse of one's superior position in transactions by requiring banks to not restrict customers' free choice. Specifically, banks must clearly inform customers that (1) Whether or not a customer grants a bank's request has no bearing on the execution of loans, and (2) Customers should not be treated unfavorably in loan deals even if they refuse to invest in other financial products/services.

JBA asked member banks to fully apply the Handbook to reinforce compliance at each bank. (The entire text of the Handbook is available via the JBA website (only in Japanese).)

On June 21, the Fair Trade Commission released the Report on Trade Practices between Banks and Other Companies, and asked JBA to disseminate the information to its members. JBA sent out a circular to presidents of member banks on June 28 in compliance with this request. In correlation to this, the Financial Services Agency issued an official notice to each financial institution asking the top management to tackle this issue quickly to ensure the propriety of financial transactions.