Japan’s government Postal Privatization Committee on Oct. 30 heard opinions from six financial industry groups, including the Japanese Bankers Association, on Japan Post Bank’s request to scrap the deposit ceiling. Private-sector financial institutions took a cautious stance on deregulation while the government holds more than one-third of Japan Post Holdings shares, and the debate is proving difficult.
At issue is the ¥13 million (approximately $83,000) deposit ceiling set for Japan Post Bank’s ordinary savings accounts. Combined with the ¥13 million cap on time deposits, a cabinet order sets a total ceiling of ¥26 million (approximately $170,000). Deposits above the limit are still accepted, but no interest is paid on the excess; about 1.06 million users were affected as of April this year.
Japan Post Bank first requested the removal of the ordinary savings ceiling at the committee’s Oct. 9 meeting. It argued that the current cap is insufficient as a receptacle for retirement payouts and inherited assets, citing the year-on-year rise in customers exceeding the limit as grounds.
In response, the Japanese Bankers Association said at the Oct. 30 hearing that the matter “should be considered with the utmost caution so as not to trigger an intensification of competition to attract deposits.” The National Association of Shinkin Banks and others also voiced concern about the impact of deposit outflows on regional economies.
What the financial industry is wary of is a distortion of competitive conditions with Japan Post Bank, in which the government remains involved. The government holds more than one-third of Japan Post Holdings shares, and its subsidiary Japan Post Bank is said to enjoy a de facto government guarantee. For this reason, the extra deposit ceiling has been in place to prevent the playing field with private financial institutions from being distorted.
ItemDetailsOrdinary savings ceiling¥13 millionTime deposit ceiling¥13 millionCombined deposit ceiling¥26 millionTreatment of amounts above the ceilingDeposits accepted but no interest paidNumber of affected users (as of April 2026)About 1.06 million
Note: The ceilings are set by cabinet order, and any change requires an amendment to that order.
The committee plans to compile its views by around March next year. The government will then consider whether to revise the regulations based on those views. With Japan Post Bank’s argument and the private financial institutions’ opposition at a standstill, the conclusion will be left to the government’s judgment.
If the ceiling were scrapped, Japan Post Bank would raise its profile as a receptacle for retirement payouts and inherited funds, while private banks and shinkin banks could face stronger pressure from outflows of individual deposits. For regional financial institutions, the deposit base underpins their lending operations, so the impact would reach their business foundations. Debate within and outside the financial industry is expected to continue as the committee works toward its conclusions.
AloJapan.com