Shonan Tax Office No.141 June 2001
There is an issue that protects depositors, for it is natural for monetary facilities to bankrupt today. Consequently, Japanese government had made "pay off" system to protect depositors. Pay-off is depositors can get all refunds and adjustments when banks are bankrupt. Savings Insurance Organization accumulates money and pays depositors. This system created in 1971. Nevertheless, it was never invoked. Finally, it will be canceled next year. It sounds like good; although, it means the government no longer protects all deposits. After April 2002, only 1,000,000 yen will cover, yet checking accounts and savings accounts will all protect one more year. Each monetary facility will protect 1,000,000 yen and interest. As a result, clients need to choose banks at own risk. The problem is that we do not know which one is good. Therefore, depositors would be forced to deposit several banks.
Q & A about Pay-off
Q1. I have more than 10,000,000 yen in the bank, but I just cannot deposit another banks. Is there any good solution of it?
A1. History is changing. We have to protect by ourselves. We should change to another banks that are less jeopardy.
Q2. I have a mortgage. In this case, can it offset loans payable?
A2. For instance, if I have a mortgage 10,000,000 yen and deposit of 18,000,000 yen, a mortgage 10,000,000 yen offsets and will protect 8,000,000 yen. However, that transaction has to be stipulate.
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