Satoru Kishi, chairman of the Federation of Bankers Associations of Japan, defended a recent decision by major banks to slash the interest rate for demand deposits from 1 percent to 0.05 percent per annum.
Kishi, concurrently president of the Bank of Tokyo-Mitsubishi, said the move by the banks, including his, to further trim the interest rate was "inevitable," citing the sharp decline in the unsecured overnight call money rate, where banks raise their funds.
Experts have said that the already low interest rates have taken a toll on depositors, especially those who rely on interest as a source of income.