Banking body welcomes new authorities

Johannesburg - The Banking Association South Africa welcomes the confirmation by Minister of Finance Nhlanhla Nene that the so-called  "Twin Peaks" legislative reforms establishing two new regulatory authorities for market conduct and prudential regulation will be tabled in this year.

"South Africa's banking systems remain sound, safe and secure due to continued regulatory enhancements and strengthening, and consistent efforts by the banking sector to ensure responsible lending, inclusive banking, consumer protection and sound market conduct practices," said Cas Coovadia, managing director of the Banking Association South Africa.

"It is for these reasons that our banking system has been consistently ranked as a top performer globally for stability."

He said beyond these effects of effective regulation, the banking sector can only do sustainable business in a conducive and enabling environment for meaningful socio-economic development.

He welcomed what he describes as Nene's commitment and emphasis through the budget framework to support government interventions in respect of a fair tax increase to generate revenue, without discouraging investment and capital flight, small business development and support, the Jobs Fund, education and training and urban development and investment.

WATCH: Assessing Brand SA after budget 2015

Eskom challenge

"Whilst the temporary increase in the electricity tariff is aimed at supporting the country to manage supply and demand during the prevailing energy challenge in the short term, the medium to long-term focus must entail a detailed focus on energy master planning across a diverse range of energy value chains to ensure reliability and security of supply," said Coovadia.

"An essential element of this must be improvements in efficiency within Eskom and a more aggressive approach on its part to enable increasing private sector involvement in the provision of energy."

READ: Nene: Eskom still needs to connect 3 million to the grid

Whilst the budget is an important instrument and tool, Coovadia emphasised that in and of itself it can only achieve so much in the context of the current economic and fiscal climate.

"We must urge government to ensure positive and consistent messaging to attract investment from the private sector, both locally and globally. The plethora of proposed legislation and discussion documents on the security industry, commercial agricultural land and ownership of land by foreigners do not instill confidence in investors and government must follow the minister's lead in ensuring such negative messages are not conveyed," he said.

ALSO READ: Nene's approach to Eskom commended - Mkhize