Banks Look Askance When Savings Mixes with Postage Stamps
Initially a Service to Small Town Savers, Burgeoning Post Office Accounts Draw Ire of Commercial Bankers in Japan
It stated as a simple, well-intentioned idea to help the small saver. It now has one-third of all the country's bank deposits, and Japanese bankers are calling it "a financial monster.'
"It' is the postal bank.
Originally, post offices were allowed to take deposits so that rural residents wouldn't have to hike miles to deposit money in city bank accounts. Farmers bought their stamps and saved their money over the same post office counter.
From those humble beginnings, post office banks have grown to number more than 23,000 nationwide, encompassing markets far beyond those they were intended to serve. Since the mid-1970s, the annual rate of increase in postal bank deposits has averaged nearly 21%, twice the rate of commercial bank …