JAKARTA (TheInsiderStories) – Indonesia government will establish postal savings and postal insurance this year as a move to generate funds for public spending from the nation’s unbanked citizens, said one official on Tuesday. The two entities will be managed by state-own postal firm PT Pos Indonesia.
“The funds collected by Pos Indonesia will be used to buy government bonds or help finance fiscal deficit,” Executive Head Supervisor for Non-Banking Financial Institutions of the Financial Services Authority (OJK) Firdaus Djaelani said.
He added, the postal firm runs 4,000 offices and 30,000 agents in the district and village offices. Through OJK’s branchless banking program, called Laku Pandai, the government will empower the postman approaching the community to encourage people to save their money in the postal office.
Firdaus gives an example Japan’s postal savings which now has market share of 20%, while Postal Saving Bank in China has become the biggest lender and sixth largest commercial bank in terms of assets. It has more than 400 million retail customers and nearly 40,000 branches, many of them in rural areas where until recently the only alternative was putting money under the mattress.
He added, OJK is working closely with the Coordinating Minister for the Economy, Finance Ministry, Communications and Information Technology and State Own Enterprises Ministry to formulate the regulation to establish the bank and the insurance firm.
Firdaus said a Government Regulation (PP) will be issued to regulate the scope of business of Pos Indonesia. OJK will also issue rules on the technical aspects of the establishment of the two entities.
He said OJK’s decision to establish the two institutions is also aimed at improving level of financial inclusion in the country. Financial inclusion refers to the delivery of financial services at affordable costs to low-income segments of the society.
The postal saving entity will start operate on the island of Java. The post offices managed by PT Pos Indonesia will prepare special counter at post offices.
Pos Indonesia currently has joint business with postal firm from Japan, China and Hong Kong. Pos Indonesia director Febriyanto said, the company will get help from Japan Post and Deutsche Post, through a government-to-government aid scheme to develop the business plan and carry out a feasibility study for the new entity.
He continued that the government would have to revise a regulation to allow the company to provide such services. Pos Indonesia is set to launch its new service this year at 50 locations throughout the country.
Deputy Coordinating Minister for Economic Affairs Edy Putra Irawadi said, the establishment of postal bank and insurance is part of the government policies package announced this week announces this week.
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Source: The Insiderstories
Indonesia to establish postal savings and postal insurance in 2016