Business

Government panel proposes raising deposit ceiling at Japan Post Bank

Kyodo

A government panel in charge of postal privatization proposed in a report Wednesday that the deposit ceiling at Japan Post Bank Co. be raised to ¥26 million ($235,000) from ¥13 million.

The proposal is prompting concerns that the state-backed bank could gain an unfair advantage over private financial institutions.

The Financial Services Agency and the Internal Affairs and Communications Ministry will revise related ordinances to implement the new deposit ceiling in April 2019, in what would be the first increase since March 2016 when it was lifted from ¥10 million.

Smaller, regional rivals worry the increase in the ceiling could prompt customers to shift to the state-backed bank. The profitability of regional banks has already been squeezed by years of monetary easing by the Bank of Japan.

Japan Post Bank held deposits of around ¥180 trillion as of the end of September, and provides services nationwide through a network of about 24,000 post offices.

With the new change, the deposit caps for savings accounts and fixed-term deposit accounts would each be raised to ¥13 million.

The report also said Japan Post Holdings Co. should reduce its stake in Japan Post Bank to less than two-thirds as a condition for raising the ceiling.

Japan Post Holdings, 57 percent of which is owned by the government, held a 74.15 percent stake in Japan Post Bank as of the end of September.

The two group companies and Japan Post Insurance Co. went public in 2015 in the final stage of the project to privatize the postal system.