Nippon Credit is also under scrutiny amid its efforts to restructure 200 billion yen worth of debt.

Nippon Credit is expected to lose as much as $120 million a year in interest income, and more if the property market slides further.

Nippon Credit has resisted the move, but the Government can effectively force it to accept nationalization.

Both Nippon Credit and the Government publicly denied the move today.

Nippon Credit said it had "received no notice from financial authorities" and declined to comment further.

Nippon Credit, however, has faced no major financing shortages.

Nippon Credit disclosed today just how near insolvency it was.

Nippon Credit will then receive a capital injection.

Nippon Credit now wants to extend the terms on some of those loans because it will have trouble meeting its obligations.

He said the bank was not in as precarious a position as Nippon Credit because it had no immediate need for additional funds.