Post Offices to Become Banks
19/11/2008
The Post Office is discussing with the Bank of Ireland the possibility of offering consumers a current account with an unlimited guarantee on deposits.
The UK government is under pressure to use the Post Office to create a "people's bank" that will build on the financial services it already provides to 1.8 million customers. However, because the UK only offers a £50,000 savings guarantee, Royal Mail (which owns the Post Office) is looking to Ireland to form the partnership.
The Bank of Ireland already runs several of the Post Office's existing products and services, which include savings accounts, credit cards and foreign currency exchange.
UK Ministers want to extend the scope of the Post Office to prevent branches from being closed down, especially during a recession when consumers will need to use their local Post Office. The Post Office Savings Account is one of the few UK savings accounts that offers (Irish) government protection on savings to any amount, not just the £50,000 capped by the UK government.
Peter Luff, the Tory chairman of the Business Select Committee, said of the banking partnership: "This is very significant and very welcome indeed. It is exactly the kind of thing the management of Post Office Limited can do now the Government has ended the uncertainty over the Post Office Card Account.
"By developing a proper banking service Post Office Limited can both build a truly sustainable business and maintain vital services to remote and deprived communities."
The UK government is under pressure to use the Post Office to create a "people's bank" that will build on the financial services it already provides to 1.8 million customers. However, because the UK only offers a £50,000 savings guarantee, Royal Mail (which owns the Post Office) is looking to Ireland to form the partnership.
The Bank of Ireland already runs several of the Post Office's existing products and services, which include savings accounts, credit cards and foreign currency exchange.
UK Ministers want to extend the scope of the Post Office to prevent branches from being closed down, especially during a recession when consumers will need to use their local Post Office. The Post Office Savings Account is one of the few UK savings accounts that offers (Irish) government protection on savings to any amount, not just the £50,000 capped by the UK government.
Peter Luff, the Tory chairman of the Business Select Committee, said of the banking partnership: "This is very significant and very welcome indeed. It is exactly the kind of thing the management of Post Office Limited can do now the Government has ended the uncertainty over the Post Office Card Account.
"By developing a proper banking service Post Office Limited can both build a truly sustainable business and maintain vital services to remote and deprived communities."
