Fresh from a landmark victory on the land-reform campaign, the Economic Freedom Fighters (EFF) party has set its sight on stealing the thunder from the ANC again, this time launching a move to fast-track the conversion of Postbank into the first retail bank wholly owned by the state.
EFF deputy president Floyd Shivambu said on Thursday that the party had started preparations to table a private members’ bill before the end of June that would seek to amend the SA Post Office (Sapo) Act so that Postbank could get a licence as a fully fledged stand-alone bank.
Shivambu said the EFF had started the process of consultation, including writing to Sapo chief Mark Barnes, requesting him to contribute towards drafting the proposed amendment bill.
He said the EFF intended tabling the bill before the end of Parliament’s second quarter in June. The proposal will include the separation of Postbank from Sapo “because the law does not allow a company applying for a banking licence to be a subsidiary of another company”.
“The Postbank in its current form cannot operate as a bank and a company needs to come out of that. The Sapo Act will have to be amended.”
Shivambu expected that three months was enough to conclude the whole process. The next step would be to appoint people in the necessary positions and Postbank, which already has branches countrywide, “will hit the ground running”.
Shivambu described Barnes as one of the few people “who has been one of the most enthusiastic about the conversion of Postbank into a fully fledged bank”. In January 2017 Barnes declared that his main priority was to get a banking licence for Postbank.
Barnes said Postbank applied for a banking licence “months ago” and “it is common cause that the only two hurdles outstanding for the processing of the Postbank application were the need to reconcile differences between the Banks Act and the Companies Act”.
The Banks Act prescribes that a bank has to be a public company, while the Post Office as a state-owned company was, by definition, not a public company.
Second, said Barnes, “a bank needs to have a bank-controlling company and we still need to agree on the capital structure of that company within the context of the Sapo group”.
Transformation of the country’s banking and financial sector came under the spotlight this week when the SA Reserve Bank on Sunday placed the only black-owned bank, VBS Mutual Bank, under curatorship because it unlawfully accepted short-term investments from municipalities – which is not allowed for mutual banks.
The big four retail banks, FNB, Absa, Nedbank and Standard Bank, make a significant profit out of handling government funds, including workers’ salaries and social grants, and a state bank is likely to change the game.
The EFF recently lobbied Parliament to adopt the policy of land expropriation without compensation – with the support of the governing ANC. Subsequently, the main opposition DA described the EFF as the ANC’s “policy head”.
Shivambu said that a state bank was yet to be launched, despite the ANC adopting the policy more than a decade ago, “because of incompetence in the party’s leadership and extreme incompetence in its back office in Parliament”.
Last year the ANC said Sapo could be granted a full state-banking licence before it begins distributing social grants by the beginning of next month.
Shivambu said the EFF’s envisioned Postbank entity “should not be owned by a single ministry as is the case with many state-owned companies”.
“The state bank can be owned jointly by Treasury, Telecommunications and Postal Services, PIC [Private Investment Corporation] and IDC [Industrial Development Corporation] to provide proper oversight mechanism,” he said.
“It should be a fully efficient bank, insulated from narrow political manipulations,” he said.
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