AN ECONOMIC ANALYSIS OF THE POST OFFICE SAVINGS BANK OF SINGAPORE

Abstract

POSB was establish! In 1877 as a department of the Postal Service. It became a statutory board in 1972 with the primary aim of encouraging thrift and to mobilise domestic savings for national development. Since becoming a statutory board, POSB has progressed over the years to become a dominant force in both the savings deposit and the housing loan markets. Its progress has brought both desirable and undesirable effects on the other financial institutions as well as on the economy. This academic exercise sets out to evaluate the operations of the POSB. In doing so, it hopes to shed light on the future direction that PQSB should take in order to play a more useful role in the economy. In total, this exercise consists of five chapters. Chapter I Presents the objective and scope of the exercise. It also deals briefly on the history of POSB as well as the type of services offered by POSB. Chapter II reviews the performance of POSB in terms of its sources and uses of funds. The issue of how POSB deploys its funds within the constraints of its status as a statutory board will also be examined. Chapter Ill presents a comparative study of POSB and the other financial institutions in terms of the savings deposits, the housing loans and the net earnings. Chapter IV, which forms the core of this exercise, sets out to analyse the effects of POSB on the other financial institutions, the public as well as the economy as a whole. It will also highlight the problems that POSB faces. The final chapter attempts to analyse the various paths that are opened to POSB in the future. It will also determine the likely route that POSB should take in the light of the present economic situation.