The government plans to modify the process of privatizing Japan Post group, meaning people must continue to wait to find out how the services they rely on will be affected.
In October the government outlined a basic policy of requiring Japan Post to make not only postal services but also banking and insurance services available nationwide on an equitable basis. A bill passed in December froze sales of government-held stocks in Japan Post Holdings Co. and its associated postal bank and insurance firms. Now the government plans to submit a bill to the Diet in March that will make structural changes to Japan Post group.
At present, Japan Post Holdings Co. has under its umbrella the Japan Post Bank Co., Japan Post Insurance Co., Japan Post Service (mail delivery) Co. and Japan Post Network (over-the-counter services) Co. The government’s envisaged changes will integrate the holdings, mail delivery and over-the-counter services companies into one firm, with the banking and insurance firms operating separately under its wing.
So far, the emphasis of the privatization process has been on increasing the profitability of the bank and insurance companies. Postal services, especially for rural regions, have been a secondary consideration. Tearing down the walls between the mail delivery and over-the-counter services companies will help to increase the efficiency of their operations.
At present, individuals are not allowed to have a balance of more than ¥10 million with the postal bank. There has been talk of raising the cap, but the government has made no decision on this front. It is also yet to decide on the size of its capital contributions to the new parent company envisioned under the reorganization.
The government must explain its fundamental objectives. Private financial firms will oppose the postal bank and insurance firms becoming too big. The government must consider how to ensure universal provision of post office services without sacrificing profitability. Before moving ahead, though, the merits and demerits of the privatization process thus far should be properly assessed.
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