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China to turn postal savings system into nation's fifth-largest bank
Beijing (AFP) May 24, 2006 China has given the go-ahead to transform the postal savings system into a bank that, once established, will become the nation's fifth-largest lender, state media said Wednesday. The Cabinet's decision to form the China Postal Savings Bank is not uncontroversial as some question whether the postal employees have the training to survive in today's fast-paced banking business. "The postal savings bank will focus on retail banking and intermediary services," Cai Esheng, vice chairman of the China Banking Regulatory Commission (CBRC), told a financial forum in Beijing, according to the China Daily. No time table was given, but an earlier report in the national newspaper China Business News said the China Postal Savings Bank would start business at the end of June if everything moved ahead smoothly. The bank will oversee 1.22 trillion yuan (150 billion dollars) of savings deposits, comprising 9.25 percent of China's banking market. However, it suffers from a lack of experience in managing funds and hedging risk in capital markets, and also has no sound corporate governance and internal control system in place, the paper said. On top of that, the bank will, initially at least, see its activities curtailed as it will not be considered a "real" financial entity, and therefore will have difficulty opening up new investment channels, it said. The CBRC approved the bank last year, but since then disputes have raged over what form it should take. Some have argued the postal savings bank should be separated from the State Postal Bureau and be put under the control of the CBRC. Others say the separation will deprive the new bank of its most valuable asset, China Post's vast network, and increase the bank's operating costs. According to statistics from the CBRC, the postal savings service has more than 36,000 outlets nationwide, with two thirds of them in counties and rural areas. Community Email This Article Comment On This Article Related Links Nuclear Space Technology at Space-Travel.com
Asian ministers discuss closer economic ties in Doha
Doha (AFP) May 24, 2006 Asian foreign ministers met in Doha Wednesday to discuss closer economic cooperation as powerhouses China and Japan tried to work out their differences over the legacy of World War II. |
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