Chairman's Comment on Outline of Implementation Plan for Succession of Japan Post Businesses

On July 31, the Japan Post Inc. published the Outline of Implementation Plan for Succession of Japan Post Businesses and JBA released the following comments of the Chairman.

Today, the Japan Post Inc. published the Outline of Implementation Plan for Succession of Japan Post Businesses. The Outline describes loan businesses and other new products/services that the Postal Savings Bank (PSB) intends to provide upon privatization.

We have maintained that reducing the business scale of Japan Post to an appropriate size and securing a state of fair competition with private financial institutions are essential conditions for the government-run postal savings to smoothly migrate to the private sector. Free competition after complete privatization to a level playing field should not be opposed. However, enlarging the scope of operations that management can select during the transitional period, when government ownership still remains, will in actuality create a more bloated government business.

The Outline specifically states the intent of the PSB to expand its business prior to complete privatization. We think that any deliberation of new businesses for PSB should include steps to ensure fair competitive conditions that also cover progress in disposing of government capital. Therefore, any desire of PSB for a greater scope of operational freedom despite the above pre-condition must be a matter of grave concern in light of securing an equal footing.

JBA will check the Outline published today in detail and express its opinion regarding it. We strongly request that the government and Postal Services Privatization Committee deliberate prudently when receiving an application for approval of business expansion so that the PBS may smoothly migrate to the private sector without jeopardizing fair competition between itself and private financial institutions during the transitional period.

The Outline describes that PSB plans to link to the Zengin System as soon as possible after privatization. Our understanding is that there are technical problems to be solved as Japan Post's current system differs from that of private financial institutions. We should point out that PSB needs to solve these problems prior to linking up to ensure the safe and secure operation of the settlement systems and prevent customers from being inconvenienced.