Industrial Bank of Japan, now a unit of the Mizuho Financial Group, will be disbanded when Mizuho consolidates its banking business on April 1, sources close to the group said.

The decision is part of Mizuho's plan to consolidate the banking business of its three constituent banks -- Dai-Ichi Kangyo Bank, Fuji Bank and IBJ. Under Mizuho's plan, Dai-Ichi Kangyo will be reborn as Mizuho Bank and specialize in retail banking, with a special focus on individual account holders and small and medium-size businesses.

Fuji Bank will become Mizuho's corporate arm and will be renamed Mizuho Corporate Bank. It will serve mainly major corporations.

IBJ, established in 1902 as Japan's leading industrial bank, will lose its registration as a corporate entity.

Formed last fall, the Mizuho Financial Group has spearheaded consolidation in the banking sector, which has been mired in bad loans generated in the bubble economy.

According to the restructuring plan, announced in April, Mizuho Bank will have about 560 branches nationwide with services focusing on loans, credit cards and banking for wealthy clients.

Mizuho Bank is expected to manage more than 30 million individual accounts, making it the largest of the "Big Four" banking groups in Japan.

The corporate division of Mizuho Bank, which will focus on small and medium-size businesses, is expected to count 160,000 clients nationwide, offering services such as syndicated loans and derivatives services, in addition to regular loans.

Mizuho Corporate Bank will have 17 branches in Japan and 47 outlets abroad and is expected to have 15,000 major corporate clients.

Mizuho Corporate Bank is expected to serve more than 70 percent of companies listed on the first section of the Tokyo Stock Exchange and is expected to be the main bank for about 40 percent of them.