Finance Minister Shaukat Tarin has backed a plan of starting banking services by Pakistan Post Office Department (PPOD) and suggested that it should enter into joint ventures with established banks, says Tribune.
Tarin told the cabinet that he would discuss the matter with the minister for communications to finalise modalities in this regard.
During discussion in a recent meeting, a cabinet member highlighted the need to delve on the larger question as to whether the government should be involved in running commercial ventures.
Tarin pointed out that PPOD had an expanded national outreach with 14,000 branches across the country.
Since scheduled banks catered to only 33% of the population, the national savings rate was considerably low even when compared with regional countries. With its nationwide outreach, Tarin said, the start of banking services by PPOD could help raise the national savings rate.
While recommending approval of proposed amendments to the Rules of Business, the finance minister suggested that PPOD should enter into joint ventures with established banks, the modalities of which he would discuss with the minister for communications.
The Communications Division told the cabinet that Pakistan Post was an attached department of the Ministry of Communications and owing to its national outreach the federal and provincial governments had been assigning various tasks to Pakistan Post as their agent.
Some of these functions, as per the Rules of Business, include Savings Bank and Postal Life Insurance. Its role also included agency functions on behalf of other divisions such as military pensions, etc.
Pakistan Post performed these functions under Schedule-II Entry 6 and 7 of the Rules of Business 1973. The Mutual Evaluation Report (MER) of the Financial Action Task Force (FATF) in October 2019 highlighted that out of 40 recommendations, 13 pertained to Pakistan Post.
