Japanese Bankers Association

JBA's Comments on "Midium-term Management Target and Midium-term Management Plan" of the Postal Public Corporation

JBA finalized its comments on the "Midium-term Management Targets and Medium-term Management Plan" of the Postal Public Corporation at the Planning Committee on December 20. The comments were submitted to members of the Founding Committee of Postal Public Corporation and other relevant parties, and released them on the same day. The full text of the comments is as follows.

With regard to the "Midium-term Management Targets and Midium-term Management Plan" of the Postal Public Corporation, that are being drafted by the Founding Committee of the Postal Public Corporation, JBA submits the following requests to be reflected in the final draft of said Targets and Plan.

1.Midium-term Management Targets
Japan's Postal Savings has expanded excessively, both quantitatively and qualitatively, and deviated from its original objective of "providing vehicles for small value savings." Consequently, it now has an enourmous balance of some 240 trillion yen.

However, the Law on the Postal Public Corporation, which passed the Diet's Ordinary Session of 2002, preserved the postal savings' privileges as a government-operated business. The Law also failed to clearly stipulate the Corporation's objective to be supplementing the business of the private sector, which should be the rule of thumb for governmental businesses. These problems have led to concerns about the future business management of the Postal Saving Corporation.

The Midium-term Management Targets should incorporate the Corporation's objective to supplement the business of the private sector and indicate a specific plan for reviewing the bloated postal savings.

2. Midium-term Management Plan
In the above context, the revealed overview of the business plan appears to contain problems that require immediate attention.

(1)The business plan should be appropriate for a government-operated corporation

- In addition to refraining from making a budget plan that would encourage the soliciting of postal savings, the plan must stipulate compliance with the business laws, specifically, strict control over the deposit limit.

- As a big player in fund management markets, the Corporation's fund management plan should not disrupt stability of the financial/capital markets.

(2) Auditing of the business should be strengthened

- In addition to extensive external inspections/auditing by the Financial Services Agency and the Bank of Japan, the Corporation should conduct its own internal business auditing and disclose the results.

3. Procedure for Drafting Midium-term Management Targets and Plan and Disclosure

In light of the public nature of the Corporation's management targets and plan, opportunities for hearing opinions from the private industry and public at large need to be set up in formulating the targets and plan.

Furthermore, statistical data used for drafting the targets/plan should be disclosed. Also, business plans for each district (branch office) should be drafted and disclosed.