Postal Savings Service

I. Business Performance

The Postal Savings Service, admin- slightly below 20% of the total of istered by MPT’s Postal Savings Bu- Japanese individuals’ financial as- reau, is a state-run, nonprofit finan- sets. This share has remained con- cial institution that offers savings, stant for the last 10 years. Nearly money orders, “” and other per- 100% of postal savings depositors sonal to the public are individuals, representing all age on an impartial basis. Besides play- groups, occupations, income levels, ing a vital role in the day-to-day life and regions. of the populace, these services con- Postal savings deposits are rede- tribute to the economic stability of posited with the Trust Fund Bureau individuals and the nation as a of the Ministry of Finance (MOF), whole. where they serve as an important The postal savings system due to source of funding for the Fiscal In- its close connection to people’s daily vestment and Program. They lives, plays a central role in the area are employed for infrastructure de- of . As of the end velopment, improving the quality of of March 2000, the balance of postal life in Japan, overseas economic aid, savings deposits was approximately and economic measures imple- XXX trillion yen, accounting for mented by the government.

II. The management of Postal Savings Funds

1. What are the Postal Savings in financial and capital markets by Funds? itself. MPT established the Fund to Cope with Financial Deregulation in Currently, the money gathered by FY 1987 to ensure that the Postal Postal Savings is (with the exception Savings would be able to deal ag- of the amount necessary for refund gressively and suitably with finan- and “YU-YU Loan” to account cial deregulation. holders) all redeposited with the Funds are raised by borrowing a Trust Fund Bureau of the Ministry of portion of the Postal Savings Funds Finance. The money is managed redeposited with the Trust Fund Bu- along with other redeposited gov- reau. This is then invested by MPT ernment funds, such as welfare pen- in instruments yielding a higher re- sion and national pension funds, as turn than the funds redeposited with a major source of the government’s the Trust Fund Bureau. Investment Fiscal Investment and Loan Pro- returns are used to improve the qual- gram, and is used to fund develop- ity of the Postal Savings financial ment of social infrastructure and the products and services. Principally, improvement of the quality of life in the funds are invested in appropri- Japan. ate and secured instruments, such as MPT has been managing part of government bonds, to ensure the in- the Postal Savings Funds (the Fund terests of account holders and main- to Cope with Financial Deregulation) tain the healthy management of the

47 2000 Annual Report

Postal Savings services. Postal Savings, making ample use of yen, with about half the balance held its long experience in Kampo and in government bonds and most of 2. Outline of the management of Postal Savings fund operation. the remainder in municipal and gov- the Postal Savings Fund by ernment agency bonds. In securities, MPT 3. State of the Fund to Cope the balance invested in foreign with Financial Deregulation bonds was 4,044.5 billion yen. Along with the reform of the Fis- Largest in foreign bonds, a total of cal Investment and Loan Program, The instruments of the Fund to 4,644.5 billion yen, was invested into the redepositing obligation of the Cope with Financial Deregulation U.S. bonds, accounting for 27.4% of Postal Savings Fund (including are government bonds, municipal the total, then into German bonds Postal Giro Fund) to the Trust Fund bonds, government agency bonds, (13.9%), international organization Bureau of the Ministry of Finance debentures, corporate bonds bonds (12.3%), French bonds will be abolished, and it is planned and foreign government bonds, etc. (10.1%), Canadian bonds (8.4%), Ital- that all the Fund be managed by By the end of FY1999, the balance of ian bonds (7.2%) and U.K. bonds MPT from April 2001. The institu- the Fund reached around 59 trillion (5.4%). tional amendments to the Postal Sav- ings Law, etc. with this Table II-3-1 The Fund to Cope with Financial Deregulation (Unit: ´ trillion) change were deliberated in the 147th Diet, and FY 1987 1988-1991 1992 1993 1994 1995 1996 1997 1998 1999 were promulgated. ´0.50 trillion New funds added to In the amendment, it is invested 2.00 amount of new 5.40 4.75 5.00 5.00 5.00 5.50 9.50 5.50 stipulated in Laws that funds invested in the previous the Postal Savings Fund fiscal year received from depositors Funds invested 2.00 4.50-15.00 20.40 25.15 30.15 35.15 40.15 45.65 55.15 60.65 be managed “surely and profitably” and “in consideration with securing public interests.” Table II-3-2 Assets of the Fund to Cope with Financial With regard to investment after Deregulation According to Type of Instrument (As of the end of March 1999) MPT begins to manage the entire Fund, from the viewpoint of fund Investment instrument Amount (´ billion) Percentage operation in the market, most of the Government bonds 26,458.9 47.9 Fund will be invested in the same Municipal bonds 8,297.4 15.0 manner as the Fund to Cope with Government agency bonds 2,463.5 4.5 Financial Deregulation. Exception- Bank debentures, corporate bonds 3,981.3 7.2 ally, a portion of the Fund will be Foreign bonds 4,459.8 8.1 Trust money (designated moneys in trust) 9,340.1 16.9 lent to local public bodies from the Deposits in financial institutions, etc. 225.3 0.4 viewpoint that the Postal Savings Total (55,226.3) (100) Fund, collected through post offices all over Japan, should benefit the re- gions from which the Fund is col- lected. The processes of manage- III. Expansion of International Services ment, responsibilities of the manage- ment officers, etc. are to be stipulated in order to secure transparency in 1. Expansion of international address or to the postal giro account management. remittance services of the payee. For telegraphic remit- As mentioned above, a portion of tance, money can be sent in two to the Postal Savings Fund has been op- For international remittance ser- four days. (The service content may erated by MPT, and Postal Life In- vices at post offices, remittances vary by nation.) surance (Kampo) Funds have been such as study expenses for children International postal giro services, operated directly by the Minister of studying abroad or payment for per- the remittance between postal giro Posts and Telecommunications since sonal imports can be made at 20,000 accounts, can be used for a fixed their inception in 1919. post offices throughout Japan to 81 charge of 400 yen, regardless of the MPT will proceed with all neces- nations and 10 regions in Asia, Eu- amount transferred. sary measures to protect the interests rope, the Americas and Africa (as of In addition, the con- of account holders and maintain the May 1, 2000), by simple procedures. ducts other services such as the in- stable and sound operation of the The remittance can be made to the ternational remittance card service

48 Postal Savings Service

(which automatically prints ad- card businesses. Taking this into by VISA International, MasterCard dresses and names on the applica- consideration, MPT decided to re- International, American Express and tion form and notification for inter- model Postal Savings ATMs at post Diners Club (JCB credit cards are national remittances) and the pre- offices. planned to compliant in March print service of the application forms It is planned that some 21,000 2001); Debit cards issued by financial for international giro transfers. ATMs at post offices all over Japan institutions participating networks will comply with this in FY2000. of VISA Electron or Maestro Net- 2. Opening Postal Savings ATM Moreover, these ATMs will also work; ATM cards issued by financial network for foreign card users feature English-language guidance institutions, participating networks so that the ATMs are accessible for of PLUS or CIRRUS. Stickers dis- On June 30, 2000, cash withdraw- visitors from abroad. playing these cards are shown als with credit cards or ATM cards The cards are: Credit cards issued around cpmpliant ATMs. issued by foreign financial institu- tions, etc. became possible at ATMs at post offices. IV. Serving the International Community Being entrusted by domestic companies concluding mem- bership contracts with foreign finan- 1. Postal Savings for Interna- (UPU Beijing Conference) held in cial institutions, the service is oper- tional Voluntary Aid August 1999, “Beijing Postal Strat- ated for the cash payment service (POSIVA) Program egy,” the principle for the develop- toward the users of the cards issued ment of postal financial services for abroad. In January 1991, Postal Savings in- five years (Ref. the column) was Previously, only several hundred troduced the Postal Savings for In- adopted. The Postal Savings Bureau ATMs in Japan could be used with ternational Voluntary Aid (POSIVA) of MPT chaired Committee 5, which cards issued abroad, since such cards program with the aim of gathering have a magnetic stripe on the back grassroots support as a way of ex- Fig. IV-1 Allocation of Postal (whereas cards issued in Japan have panding overseas aid. Savings for the stripe on the face), which pre- Participants in the POSIVA pro- International Voluntary vented such cards from being used gram donate a part of the after-tax Aid Funds in FY1998 at most Japanese ATMs. Visitors interest earned on their Ordinary Improvement of general living standards: 71.8 (29 projects) from foreign nations are increasing Savings accounts, which is then Medical care & public health: Environmental protection: 230.0 (69 projects) year on year, so is the demand for channeled through non-governmen- 48.1 (17 projects) such a service from foreign credit tal organizations (NGOs) into 11.0% Agricultural development: projects designed to 100.6 (24 projects) 7.4% Photo III-2. Stickers displaying these cards improve the wel- 35.4% 15.5% fare of people in de- Total ´650.4 million veloping countries. (225 projects) Job training & technical The cumulative instruction: 7.1% 46.4 (29 projects) number of accounts 23.6% Education: 153.6 (57 projects) in this program as (Unit: ´1 million) of March 31, 2000 reached 25.83 mil- was in charge of postal financial ser- lion. vices in the Congress. The Bureau, appointed as the chair of Postal Fi- Note: Depositors nancial Services Project Team, will can donate between 20% play a leading role in the further de- and 100% of the interest earned in increments of velopment of postal financial ser- 10%. vices. Under these circumstances, the 2. Forum on the “Postal Financial Services Develop- introduction of ment Forum” was held in March Postal Savings 2000 in Tokyo, with 19 representa- tives from the postal administrations of 12 UPU member countries, in or- At the Universal der to discuss measures for the de- Postal Union (UPU) velopment of postal financial ser- Congress in Beijing

49 2000 Annual Report

Fig. IV-2 Postal Financial Services from the viewpoint of the provision Project Team (39 member of new services; and, iv) holding a 4. Executives’ International countries) workshop for studying IT and using Seminar on Postal Savings IT in postal financial services, etc. Subgroup 1: Quality control Services and regulations (Switzerland) Note: “Postal financial services” is used in ¥ Setting quality standards for UPU as a generic term for postal sav- postal remittance services and The Postal Savings Bureau, as a conducting quality examinations ings and international remittance ser- technical cooperation for developing ¥ Simplifying service processes vices. and regulations countries, has been conducting the Executives’ International Seminar on Subgroup 2: New Chair: Japan 3. Postal Savings International commodities (Belgium) Postal Savings Services since FY Workshop ¥ Promoting relations between 1984, inviting high-ranking officials postal and non-postal institutions from postal administrations and ¥ Expanding the scope of commodities and introducing The Postal Savings Bureau has state-run savings institutions in de- modern services been holding an annual Postal Sav- veloping countries. ings International Workshop since Subgroup 3: Development of This annual seminar is held in co- new electronic services FY1992 aimed at contributing to the operation with the Ministry of For- (the U. S.) development of savings and remit- ¥ Expanding electronic remittance eign Affairs and the Japan Interna- ¥ Promoting exchange of tance settlement services of postal tional Cooperation Agency (JICA), technology and information ¥ Developing postal financial administrations and savings and aimed at contributing to the de- services utilizing IT such as the as well as to the promotion of inter- Internet velopment of savings and remittance national cooperation as a savings in- settlement services in participating stitution sharing the same societal countries through presentations on Action Plan POST- mission as other savings institutions. the Japanese postal savings system The eighth workshop in FY1998 and the current status of the system SERFIN was held for 12 days from October as well as an exchange of informa- 2000-2004 18 through 29 in 1999. A total of 13 tion and opinions among partici- (Resolution C42 at the Univer- high-ranking officials from postal pants. sal Postal Congress at Beijing) administrations and savings banks The FY1999 seminar, the 16th of its in 13 countries including Thailand kind, was held from January 24 With the aim of adjusting the and Myanmar, which are consider- through February 4, 2000. A total of environment in which postal fi- ing the introduction of a postal sav- 10 officials from 10 countries, includ- nancial services are discovering ings system, attended this work- ing Bhutan, Mongolia and Cambo- change and of promoting the de- shop. dia which are considering introduc- velopment thereof, the resolu- tion was adopted to conduct the “Development strategy for postal Photo IV-3 Participants in the Postal Savings International financial service, Action Plan Workshop POST-SERFIN 2000-2004.” Ten points for special consid- eration are enumerated, includ- ing the “promotion of introduc- tion and development of postal financial services among mem- ber countries.” vices. The Forum discussed the ac- tion plan of the coming five years for executing the development strategy, and decided upon i) creating a ser- vice standard for postal remittance services; ii) creating manuals, guides, etc. on postal financial ser- vices; iii) conducting market re- search for analyzing bases of collabo- ration between postal administra- tions and non-postal institutions

50 Postal Savings Service

Photo IV-4 Executives’ International Seminar on Postal Savings Services Savings Banks Institute (WSBI) was established as an association for these savings. WSBI has been supporting activi- ties of savings banks around the world by promoting studies on a wide variety of issues regarding sav- ings and savings banks such as sav- ings promotion and protection of ac- count holders. In November 1999, the third Postal Savings Banks Forum was held in ing international remittance services, improve their on-line systems. Brussels, Belgium, aimed at promot- attended the seminar. At the request of the Universal ing information exchange and Postal Union (UPU), the World Sav- strengthening ties among postal sav- 5. Individual training courses ings Banks Institute (WSBI) and ings institutions which make up ap- and dispatch of experts JICA, the Postal Savings Bureau has proximately one-third of all WSBI dispatched experts to the following member institutions. At the request of postal adminis- countries: to Cambodia, for intro- At the request of WSBI, the Postal trations and savings banks primarily ducing international remittance ser- Savings Bureau of MPT agreed to in developing countries and also in- vices, and to , Thailand and chair the forum, following the first ternational organizations and the Ja- Laos, for introducing and improving and second forums. During the fo- pan International Cooperation their postal savings systems. rum, MPT’s Postal Savings Bureau Agency (JICA), the Postal Savings Since August 1998, the Postal Sav- reported the Universal Postal Con- Bureau has been accepting trainees ings Bureau has been dispatching an gress held in August 1999 in and dispatching experts from/to expert to the International Bureau of with the view that the importance of these organizations aimed at spread- UPU in order to support the intro- postal saving is re-recognized by in- ing the concept of savings and thrift duction of international remittance ternational community. in developing countries as well as services in countries where this sys- In the forum, resolutions were further promotion of Japan’s contri- tem has yet to be adopted within the made to strengthen public relations bution to the international commu- Asia-Pacific region. for further understanding the impor- nity. tance of postal savings and to sup- In FY1999, the Postal Savings Bu- 6. The World Savings Banks port the conclusion of agreement be- reau accepted postal administration Institute (WSBI) Postal tween WSBI and the Universal officials and some other persons Savings Banks Forum Postal Union (UPU). from such countries as Thailand, Sri Note: WSBI has 108 member institutions in Lanka, Vietnam and nations of East There are many savings institu- 87 countries as of July 2000. Africa to help these countries intro- tions including postal savings for in- duce a postal savings system, or to dividuals worldwide. The World

Photo IV-6 The World Savings Banks Institute (WSBI) Postal Savings Banks Forum

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