By Taro Fuse and Taiga Uranaka
TOKYO (Reuters) - Japan's struggling Suruga Bank (T:8358) will get a credit line for as much as 250 billion yen ($2.2 billion) from the country's central bank and will extend its mortgage loans as collateral, two people with direct knowledge of the matter said.
The mid-sized regional lender in central Japan is reeling from a scandal over retail property-investment loans that has slammed its shares and led to the departures of its top executives.
Regulators do not expect Suruga to suffer a liquidity crunch but they have asked the lender to secure funding from the Bank of Japan (BOJ) to be ready for any contingencies, the sources told Reuters. They spoke on condition of anonymity, as they were not authorised to discuss the matter publicly.
A BOJ spokesman declined to comment, saying the central bank does not disclose specific collateral conditions. A Suruga spokesman said he could not comment on specific transactions.