TOKYO -- Japanese retail giant Ito-Yokado Co Ltd has filed for a license to break into the banking sector, becoming the first non-financial firm to do so since looser guidelines were approved last August, according to Reuters.
Ito-Yokado, Japan's second-largest supermarket operator, and convenience store subsidiary Seven-Eleven Japan Co Ltd. applied to the Financial Reconstruction Commission (FRC) for a preliminary license to create a bank, Reuters reported.
The new bank, to be called IY Bank, will likely begin to do business in December if the approval process goes smoothly, Kyodo news agency quoted an Ito-Yokado spokesman as saying.
Since the FRC, Japan's financial regulatory body, approved new guidelines to open up the industry, a number of non-financial firms including Sony Corp. have expressed interest in entering the banking sector.
In October, Japan Net Bank -- owned 50 percent by Sakura Bank and the rest by non-bank firms including electronics maker Fujitsu Ltd and Nippon Life Insurance Co -- became the first group with non-bank members to enter the sector.
Ito-Yokado and Seven-Eleven Japan, which comprise Japan's most profitable retailing group, said they plan to install ATMs at their stores to enable customers to pay bills and withdraw cash.
Its business plan submitted to the FRC calls for ATMs in 3,500 of the 9,000 retail outlets run by Seven-Eleven Japan and Ito-Yokado within two years from the start of IY Bank's operations, Kyodo quoted Ito-Yokado as saying.
The number of outlets equipped with ATMs would be increased later, it said.
The advent of 24-hour banking is expected to present a challenge to Japan's traditional banks, most of which only offer ATM services until the early evening. According to Reuters, Japanese banks have been slow to respond to the needs of the retail market, instead relying on corporate customers.
Since most Japanese already use convenience stores such as Seven-Eleven to pay all their bills, banking was an obvious extension of that service, analysts said.
