Japan's Financial Services Agency closed the public comment period on its rewrite of the Comprehensive Guidelines for Supervision of Small and Regional Financial Institutions and published its answers on July 23, 2026, alongside the finalized text showing exactly what changed. The headline answer to the industry's biggest worry: the agency is not trying to talk banks out of closing branches.
Two separate commenters asked the FSA to confirm this directly. One wanted to know whether the revision was meant to restrain branch-network consolidation; another asked whether the guideline's language on "maintaining customer service" during a branch closure amounted to a mandatory checklist. The FSA's answer both times was the same: "your understanding is correct." The guidance exists to support banks' own restructuring decisions given regional population decline and intensifying competition, not to slow them down, and any service safeguards, such as keeping certain functions running near a closed branch, are for each bank to weigh against its own profitability and resources, not a supervisory requirement.
One commenter raised a narrower, more practical gripe: when two banks share a single "joint store" location, customers sometimes misdirect wire transfers because they identify the branch by address rather than by name, and the commenter had heard from users who gave the wrong branch name after assuming "same building means same branch." The FSA thanked the commenter but did not add a new rule, pointing instead to the guideline's existing "user protection" section as already covering signage and disclosure at shared locations.
| Topic | Commenter's Question | FSA's Response |
|---|---|---|
| Branch-network restructuring | Does the revision aim to restrain regional banks from closing branches? | No; the revision is meant to support banks' own restructuring decisions given population decline and competition. |
| Customer-service commitments | Must banks maintain specific service measures when closing a branch? | No; each bank decides based on its own profitability and available resources. |
| Shared-branch signage | Please add signage guidance to stop wire transfers being misdirected at co-located branches. | Already addressed under the guideline's existing user-protection section; no new rule was added. |
| Lending screening on tender-barred contractors | Should banks be barred from lending to firms repeatedly suspended from public tenders, citing UN sustainability standards? | Received as a valuable opinion; no commitment made. |
The more consequential change sits in the technical redline rather than the comment log. The revised supervisory-methods section on "sustainable profitability and soundness" now instructs examiners to build reasonable scenarios covering future population trends and interest-rate movements before accepting a bank's own revenue and capital forecasts. That check runs through hearings on a bank's revenue plans, cost cuts, capital raises, anticipated one-off costs such as headquarters rebuilding, system-migration spending, asset impairments and deferred-tax write-downs, its capacity to book securities gains, its dividend policy and its stress-test results, including stress scenarios. The stated goal is for supervisors and the bank to reach the same read on where its business is headed, not simply approve a forecast on paper. The supplied excerpt of the revised text cuts off mid-sentence describing a roughly five-year threshold tied to core banking profit, so the exact numeric trigger for closer scrutiny cannot be confirmed from this release alone.
A fourth comment pushed the FSA further than it was willing to go: it argued that "sustainability" language in the guideline should be paired with United Nations-style screening that would bar lending to construction firms repeatedly suspended from public tenders over corruption or labor abuses. The agency's response, "received as a valuable opinion," is bureaucratic shorthand for no commitment. For lenders, the near-term effect of this release is less about who they can serve and more about how hard the FSA will now press on the numbers behind their five-year plans.