Effectively, this amendment bill will allow for the separation of the Postbank from the South African Post Office and the conversion of the Postbank into a fully-fledged bank with its own banking licence, making it a new state-owned bank in South Africa, together with the proposed intention to allow the Postbank to offer more financial services to the public.
The government has been cited as stating that the need for the creation of such a bank was necessary, but the reasons given are extremely vague, chief amongst those, as stated by the president, being that many other developing countries have these institutions.
Currently, it is not an unknown reality that there is no state-owned enterprise which functions efficiently in this country. Most are bedevilled by maladministration and corruption. Further to this, there has been concern on whether the bank’s systems are reliable in grant payments as it has been reported that the Postbank had experienced growth during the county’s lockdown, primarily as a result of accounts opened for beneficiaries of the Covid-19 unemployment relief fund which, as known, was riddled with controversy of maladministration.
Over 6.3-million unemployment grant disbursements and credit transactions were apparently processed by the Postbank to the value of R3.2bn. If hundreds of billions of state rands, currently administered mostly by private banks, could be channelled for administration by a state-owned bank, heaven knows how much of it would go ‘missing’ under the current government’s administration. It is evidenced, by the VBS saga, what havoc the willy-nilly handing out of a banking licence or creation of this entity could wreak.
Little reason has been given for the creation of such a bank, save as to be a ‘potential positive disruptor to our financial system’, according to the minister of finance. This proposed bill may be construed as the government’s attempt to transfer monies, currently administered by the private and commercial banks, into a state-owned financial institution. The risks associated with such an undertaking are unimaginable. Accordingly, by National Treasury’s own admission, the establishment of such an institution could be a massive liability that the country can ill-afford. Every company within the private sector, ought to be informed and aware of this move by the state. One wonders what the true motive for the creation of this bank is.
