Provisional Translation

Q.

A proposal has been floated to eliminate the cap on ordinary deposits at the Japan Post Bank, but the banking industry has voiced objections to eliminating this upper limit, given the absence of a clear roadmap toward complete privatization. Please give us your views on this.

A.

With regard to the maximum limit of ordinary deposit at the Japan Post Bank (currently 13 million yen), I am aware that there has been talk of raising or abolishing it. I think that the Japan Post Bank has a difficult time in its fund management under conditions where the interest rates are low. Quite some time ago, the Japan Post Bank saw its profits being squeezed as deposits built up, but it has been trying to manage this through internationally diversified investments. In addition to this, I think that, to promote a shift from savings to investment, it has also been promoting “Dollar-Cost Averaging NISA,” and it is currently working with regional financial institutions to make progress in this regard. If deposits do expand, I frankly do not know how they will manage it under the current low interest rates. I expect that the Postal Privatization Committee is examining this matter from various viewpoints.