Mizuho Bank enduring technical glitches likely due to surge in demand for cash by panicky depositors

The sporadic power outages caused by the devastating earthquake in Japan may be indirectly wreaking havoc with the country’s banking system.

Mizuho Financial Group Inc, Japan’s third-largest bank by market value, said it has restored its automated teller machine (ATM) service nationwide, following three days of system failures. Its internet service was also on the fritz.

Later Thursday, however, the ATM system was again down.

The bank’s President Satoru Nishibori said at a press conference that the disruption of service may have also been exacerbated by a huge surge in online transactions. He warned it will take some more time for banking functions to return to normal.

The bank’s money transfer system was out of service for two days, prior to problems related to its ATM and Internet service today.

Mizuho added, however, that there is a backlog of 440,000 transactions valued at 650 billion yen ($8.1 billion) that it has not yet been able to process.

Foreign exchange transactions also won't be processed anytime soon, the lender said.

Mizuho said it hopes to get its 5,600 ATMs across Japan working properly by Friday morning.

However, bank officials claim the service disruption was not directly caused by last Friday’s earthquake.

The problem comes amidst a huge spike in demand for cash in Japan as fears over radiation leaks intensify.

Mizuho's two major rivals—Bank of Tokyo-Mitsubishi UFJ and Sumitomo Mitsui Banking Corp.—said their ATMs were functioning normally.

"If Mizuho can't fix this problem by the [March 25], that could bring it reputational risk as there would be more transactions to be made toward the end of March," an analyst at a Japanese brokerage told media.

Mizuho also endured a technical breakdown in 2002, when a malfunction in its computer system paralyzed its ATM network and disrupted its settlement transactions.