The president of Japan Post Holdings Co. tried Friday to allay bankers’ fears about postal reforms, saying that doubling the deposit cap on postal savings accounts and the benefits paid out by Kampo insurance policies were unlikely to affect their profits.
“There are various misunderstandings on this issue,” President Jiro Saito said at the recently privatized company’s head office in Tokyo. “One thing is that when we look at our savings, it has decreased by about ¥80 trillion in about 10 years, while the private sector’s savings have increased by ¥100 trillion.”
The controversy started when postal reform minister Shizuka Kamei and internal affairs minister Kazuhiro Haraguchi drafted a reform plan in March that hikes the upper limit on postal savings accounts to ¥20 million per person instead of ¥10 million. It also boosts the maximum payout from Kampo insurance policies to ¥25 million, from ¥13 million.
The move drew flak from banks, which said the change would hurt them because Japan Post Bank is financial behemoth that is already sitting on a whopping ¥177 trillion in deposits — an amount that dwarfs every private bank in the country.
Saito argued, however, that postal savings have been on the decline ever since privatization began under former reformist Prime Minister Junichiro Koizumi. This, he said, proves people no longer see merit in pooling their money at Japan Post.
“I am not expecting that the deposit balance will drastically expand through doubling the cap. I’d be happy if it just stops the sharp downtrend,” he said.