Zengin Member Banks to Compensate for Losses (Update 2)

Jiji Press

16:07 JST, October 18, 2023 (updated October 19 at 12:00 JST)

TOKYO (Jiji Press) —The operator of Japan’s Zengin interbank financial settlement network said Wednesday that participating banks will compensate customers for losses caused by delays in transferring money through the network due to a major glitch earlier this month.

According to the operator, Japanese Banks’ Payment Clearing Network, or Zengin-Net, losses to be covered will include fees, arrears, late charges and overdraft interest.

Meanwhile, it will continue to investigate into the exact cause of the system failure, which is still unknown.

At a press conference in Tokyo the same day, Zengin-Net Senior Managing Director Matsuo Tsuji apologized for the glitch and said that the operator will consider appropriate steps to clarify responsibility for the incident after progress is made in dealing with the issue.

The glitch began in the morning of Oct. 10, after an error occurred in a relay computer linking the Zengin system with 10 financial institutions including MUFG Bank, Resona Bank, Yamaguchi Bank, Kitakyushu Bank and Momiji Bank.

The error was attributed to damage to a data file related to the calculation of fees, but the cause of the damage has not yet been determined.

The glitch lasted two full days and affected some five million transactions.

During work to restore the Zengin system, transfer fees were set at zero as a provisional measure. As a result, these fees have yet to be settled between financial institutions.

Following the system failure, the Financial Services Agency on Friday ordered Zengin-Net to submit a report under the funds settlement law. The operator will further investigate the cause of the incident, draw up measures to prevent a recurrence, and submit a report by the end of next month.