Post split approved in China

China’s cabinet has approved a plan to reorganize the State Post Bureau by splitting off its banking component and creating one of the nation’s largest lenders, according to a banking regulator.

The new bank, called the China Post Savings Bank, will specialize in ”retail banking and intermediary services and serve the local community and rural areas with its extensive network,” Cai Esheng, vice chairman of China Banking Regulatory Commission, said on Tuesday.

China’s government is trying to split commercial businesses from government bodies to prevent corruption and fraud, as the nation fully opens its financial markets to overseas investors by the end of this year. China Post currently collects and delivers mail, takes deposits, issues stamps, sells policies for insurance companies and handles bill payments.

The banking regulator said last July that it would set up a post savings bank with 1.23 trillion yuan, or $153 billion, of deposits ‹ 10 percent of the country’s household savings ‹ and that it would continue to offer financial services through 36,000 outlets after the breakup of the nation’s postal bureau.

A supervisory department will also be formed this year to oversee the postal institutions, government policy banks and asset managers.

China Post started taking deposits in 1986. It has more than 352 billion yuan of assets, 260 million account holders and 70 million debit card holders, according to its Web site. The deposits are held by the central bank, the People’s Bank of China. About two-thirds of China Post’s outlets are located in rural areas.

Under the reorganization approved by the State Council last year, the new State Post Bureau will become a regulatory body, while its previous businesses, including mail services as well as the deposit and savings units, will be split into five parts and transferred to a new company.

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