Japan regulator sets penalties on Mizuho over mob loan scandal -source

Mizuho Financial Group President Yasuhiro Sato reacts as he attends a news conference at the Bank of Japan headquarters in Tokyo December 26, 2013. REUTERS/Yuya Shino

TOKYO (Reuters) - Japan's banking regulator on Thursday will order Mizuho Financial Group's <8411.T> banking unit to suspend some of its lending business with consumer credit companies from January 20 to February 19, but it will issue no other specific penalties in connection with a scandal over loans linked to members of organised crime syndicates, a source familiar with the matter said.

The order, a rare second action by the Financial Services Agency in response to a single incident, will also demand that Japan's second-largest lender and its parent group improve business practices and clarify lines of responsibility, the source said.

The agency is scheduled to make an official announcement on the order at 3:35 p.m. (0635 GMT).

Sources told Reuters on Wednesday that a suspension of some operations was expected to be included in the order.

Banking examiners conducted a second round of investigations into Mizuho after it acknowledged providing authorities with false information about how it handled the loan problem.

The FSA issued a business improvement order to Mizuho in late September for failing to take action for two years after the bank learned some of its loans were made to "anti-social forces".

(Reporting by Noriyukio Hirata; Additional reporting by Taiga Uranaka and Emi Emoto; Writing by Edmund Klamann; Editing by Shinichi Saoshiro)

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