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Postal Banking

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Should the post office do more than handle the mail? Since the 19th century, governments around the world have used the unparalleled reach of postal networks to pursue a social goal: encouraging people, particularly the poor, to save money. But this venerable institution is in flux. Japan and China have begun to sell off chunks of their vast systems, while India is looking to expand its postal finance offerings. In the U.S., some Democrats want to revive the tradition to help the millions of Americans who lack access to reliable, reasonably priced financial services. Is postal banking an idea whose time has come or gone?

China’s postal savings bank has filed a listing application with the Hong Kong stock exchange for an $8 billion initial public offering that could be the world's largest this year. It had earlier sold 17 percent of its shares to investors for $7 billion. The lender, which has 500 million customers and more than 40,000 outlets nationwide, wants the shareholders to help it offer investment banking and wealth management services and to expand and modernize its micro-finance lending, which is aimed at the country’s rural poor. India Post, the world’s largest mail delivery network, in January 2016 won permission to offer banking services, insurance products and delivery of government payments. And in November 2015, Japan sold an 11 percent stake in its postal service, which houses the country’s biggest bank by deposits and its largest insurer. The sprawling operations had become a symbol of government inefficiency and cronyism. It’s still required to deliver universal postal service, which is widely interpreted to mean it must maintain branches in rural areas. In the U.S., prominent liberal politicians are pushing postal banking. They see it as a way to serve the unbanked while providing revenue to support the U.S. postal service’s network of more than 30,000 offices as mail delivery declines.