By Leika Kihara
TOKYO, Oct 17 (Reuters) - The Bank of Japan is preparing a plan to extend three special loan facilities that have backed more than $81 billion in lending over the past three years, a step intended to nudge Japan's risk-averse banks to start creating credit, according to people familiar with the matter.
By extending the operation of the facilities, the BOJ would signal its continued commitment to drive funds through the banking sector to borrowers even as it continues an unprecedented quantitative easing under current Governor Haruhiko Kuroda.
The central bank's policy board is expected to review the three special loan programmes in November or December. In addition to extending the operation beyond March 2014, the board may also opt to combine the programmes to simplify their operations, said the sources who asked not to be named.
The loan programmes were cobbled together under former Governor Masaaki Shirakawa between 2010 and 2012 as a way for the BOJ to support bank lending while attempting to hold off political pressure for more aggressive easing.
(Additional reporting by Sumio Ito) Keywords: JAPAN ECONOMY/BOJ
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