Pakistan Post to abolish Savings Account, Pension payments

January 14, 2021

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Following one of the conditions set by the Financial Action Task Force (FATF), Pakistan Post has decided to abolish the nationwide savings accounts and phase out the army’s pension system from its system in a phased manner.

The abolition of savings accounts and the pension system will lead to a significant decrease in the Revenue of Pakistan Post. According to one estimate, the annual revenue will fall from Rs. 12 billion to around Rs. 4 billion.

In addition, the closure of accounts will also lead to a rendering of tens of thousands of employees, leading to the layoff of large numbers of Pakistan Post employees in the future.

Billions of rupees are deposited in millions of savings accounts at post offices across the country, and transactions in these accounts serve as the basis of administrative and government revenue.

Consequently, the decision to withdraw two major financial accounts from Pakistan Post will affect millions of users across the country as well as affect government revenues.

The General Post Office (GPO) in Rawalpindi was selected as a pilot project for the above system changes. According to the project, at the initial stage, the closure of savings accounts has been initiated.

Meanwhile, Cash payments to account holders of small post offices were blocked without GPO approval, causing clients to experience severe issues.

To solve the issue, customers must immediately open a bank account and withdraw funds immediately. They have fewer savings centers and are overcrowded, making it difficult to open bank accounts. It is also noted that it is difficult to open a bank account with a small amount of money because there is no profit on it.

In addition, the management is also considering a deadline for customers who have a Pakistan Post urgent deposit account and for transferring their accounts to savings centres. The new policy will significantly affect the rural population of the country.