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New Sarb bill 'not about nationalisation'

Cape Town - Debate around the Reserve Bank Amendment Bill must not get bogged down by discussions on whether the bank should be nationalised or what its mandate should be, the chairperson of parliament's finance portfolio committee, Thaba Mudamadi, said on Tuesday.

Mufamadi also mistrusts the real motives of private shareholders opposed to the bill, which is aimed at limiting the powers of these shareholders and giving the governor of the South African reserve Bank (Sarb) more say on how its board is constituted.

Following recent public hearings into the matter, Mufamadi said although introduction of the bill to parliament coincided with calls from the ANC's alliance partners for Sarb to be nationalised, it was not an opportunity to redraft legislation governing the way the bank operates, or a chance to debate the merits of inflation targeting. It was a "limited intervention".

Commenting on presentations to the committee from shareholders and corporate governance experts - who painted the bank as a secretive, arrogant and autocratic organisation that ran the risk of becoming a "law unto itself" - Mufamadi conceded that parliament should play a bigger oversight role when it came to Sarb.

But he cautioned: "As South Africans we sometimes go overboard with things that are normal practice in other democracies. The appointment of the governor, for example, is such a serious matter that it is a presidential appointment. Then people turn around and ask 'how do we democratise this appointment'?

"It's critical not to undermine the authority of this position or the predictability and certainty the bank has to uphold. The governor position is not a permanent appointment and it is the governor - not the board - that takes ultimate responsibility for running the bank and implementing government's monetary policy."

Mufamadi did not buy private shareholders' arguments that they oppose the bill in the country's best interest.

Referring to the way in which shareholders like Michael Duerr and his family have over time amassed up to 100 000 shares, Mufamadi said: "Although the principal act limits individuals to owning 10 000 shares, humans always want more and they look around to see how they can do this.

"The question is, why do you want to own more than 10 000? Anyone who is concerned with legislation that aims to prevent individuals voting by family proxy has other motives."

Mufamadi said Sarb isn't a normal business and could not be subjected to the kind of good governance and transparency measures that rating agencies applied to other private businesses.

 - Fin24.com

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