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Japan's financial watchdog on Thursday ordered Mizuho, one of the country's biggest banks, to suspend part of its loan business as additional punishment for its links to organised crime.
The bank's parent company, Mizuho Financial Group, said its chairman Takashi Tsukamoto would step down from his post on March 31 to take responsibility for the scandal.
The Financial Services Agency (FSA) said it issued the order to stop Mizuho Bank from extending new loans through its affiliated credit company for one month from January 20.
The agency also ordered Mizuho Financial Group to improve its management of the bank.
The group has been under fire since September, when its credit affiliate was found to have processed about 230 loans worth about $2 million for the country's notorious crime syndicates. The Yakuza syndicates are involved in activities ranging from prostitution and drugs to extortion and white-collar crime.
In a statement, the group offered "sincere apologies" for causing trouble to its customers and other people concerned and vowed to take the punitive action "with utmost seriousness."
Mizuho Bank said its president Yasuhiro Sato was to take a self-imposed salary cut for one year.
"The group wishes to make uninterrupted efforts by mobilising all resources to sever ties with anti-social forces," Sato told a news conference.
"We want to establish a forward-looking, advanced management structure and help Mizuho grow through its contributions to our customers, the economy and society."
In late September the FSA ordered Mizuho Bank to improve operations after it was found to have taken "no substantial steps" to sever the Yakuza links two years after they were discovered.
The FSA decided to take additional punitive action against the group after the bank submitted a false report on the issue to the financial agency.
Mizuho Bank had originally said its top management had been unaware of the Yakuza links. But it later admitted that its current and former presidents were in a position to know about the issue.
In late October the bank submitted a report compiled by a third-party panel probing the issue, which said it found no evidence of a cover-up of the scandal.
But the agency has proved the claim wrong through on-site inspections of Mizuho Bank and Mizuho Financial Group in November.