Japanese government plans to abolish postal savings limit

The government of Japan is making final arrangements to abolish the 10m yen limit on the amount of postal savings that can be held by each depositor, through a postal reform bill it will submit to the current Diet session, reports The Daily Yomiuri. The article continues:

The government’s plan is to lift the ceiling three years from now. As a provisional measure until it is removed, the government intends to raise the limit to 30m yen, government sources said.

If the state-financed Japan Post Bank is able to expand its business on the strength of people’s trust in the government, it will most likely put pressure on private financial institutions and inevitably invite strong opposition from the private sector, industry watchers said.

Shizuka Kamei, state minister in charge of postal reform, and internal affairs and communications minister Kazuhiro Hara-guchi, reached a broad agreement Friday on the plan to remove the ceiling on postal deposits.

The government plans to finalise the postal reform bill before the end of March, a government source said.

The government also plans to lift, again in three years, the ceiling on life insurance benefits guaranteed by Japan Post Insurance Co., currently set at 13m yen per policy holder. Until the abolition of this limit, the ceiling will be raised to 50m yen.

The postal reform bill – which rescinds postal privatisation measures initiated by former Prime Minister Junichiro Koizumi and the succeeding coalition governments led by the Liberal Democratic Party – calls for changing the current five-company system into a three-company set-up.

Currently, Japan Post Service Co., Japan Post Insurance Co., Japan Post Bank Co. and Japan Post Network Co. exist under Japan Post Holdings Co.

The government plans to integrate Japan Post Service and Japan Post Network with Japan Post Holdings as a parent firm under which Japan Post Bank and Japan Post Insurance will continue to exist.