State okays new postal savings bank By Zhao Renfeng (China Daily) Updated: 2005-07-29 06:16
Challenges & obstacles
However, due to a lack of experience in managing funds and hedging risks in
capital markets, the postal savings service faced a number of challenges.
"With the rapid development of postal savings business, the current operating
system which mingles together postal savings with other postal business has
created many problems," read the CBRC statement.
As they are part of the postal system, postal savings lack sound corporate
governance and an internal control system. Also, since the sector is not a real
financial entity, it's difficult to open up investment channels.
Another important obstacle in the path of reform is that staff in postal
savings can move to other departments without too much trouble and vice versa.
Therefore, some staff in the business lack the necessary skills.
Some experts have suggested turning the postal savings sector into a
commercial bank with a limited business scope in low-risk wholesale banking
services and negotiable loans.
The bureau should also make full use of its vast branch network to promote
remittance and intermediary services, the experts said.
According to the regulator's statement, it has taken a
series of steps to transform the postal savings sector into a genuine commercial
bank, while striving to improve its risk-control and compliance capabilities.
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