The banks aren't disposing of their bad debts because to do so on a significant basis would bankrupt them, the RCC said.
Banks "don't want to realize losses because they will become insolvent," said Kurihara. "There would have to be an injection of public money" to keep lenders solvent.
Hiroshi Takahashi, the spokesman for the Japanese Bankers Association, wouldn't comment.
The RCC, started five years ago and now with about 2,400 workers, has so far got creditors to pay about ?4.6 trillion, or half the value of the loans it has bought. Ninety-nine percent of the agency's assets are from failed financial institutions.
"If the debtor is generating cash or making a profit we get them to pay," Kurihara said. "If it isn't, we liquidate the collateral." The RCC has bought the non-performing loans at a price that in nine out of 10 cases is higher than their market value. It was the only bidder on loans and bought the debt, on average, at a third of its face value.
And collection is getting more difficult.
"There are lots of mob loans," said Kurihara. "The yakuza bought real estate. The mortgage is with the failed financial institution and we have bought the mortgage from them. The private sector doesn't want to collect the money." That's where the debt squad comes in. The 20-person unit -- seconded from Japan's police force -- specializes in collecting loans from potentially violent customers.
The agency's troubles aren't confined to gangsters.
Kurihara said last summer a man who had to pay back several million yen in loans came to the sixth floor of the agency's offices last year arguing against his obligations. The man, about 40 years of age, set fire to a small section of the building.
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