Post Office to expand banking services
Business Secretary Lord Mandelson is understood to be in full support of extending financial services at the UK’s 12,000 Post Offices.
The Department for Business Enterprise and Regulatory Reform (BERR), led by Lord Mandelson, is in favour of creating a ‘People’s Bank’, which will see Post Office outlets as the backbone of a new national bank.
Many believe the move will help to boost lending. Commercial banks have been the subject of heavy criticism of late since cash injections from the Government have failed to boost lending.
It is also hoped that the move will prevent further post office closures and see an end to plans of part-privatisation of Royal Mail, the parent company of Post Office Ltd.
The Post Office currently offers a range of banking services and bill payments. Back in 2004, it embarked on a joint venture with the Bank of Ireland which then allowed it to provide mortgages, loans and credit cards.
In 2008, it gained control again of the contract to run the card account that distributes benefits and pensions to over 4 million claimants.
Over 2,000 Post Offices have closed since the start of the millennium with a further 200 closing by March.