BMF growls over "useless" Financial Sector Charter

Cape Town - The Financial Sector Charter that stipulates good practice and black economic empowerment requirements for the industry “are useless” and must be amended to meet or exceed the minimum requirements set by the BBBEE generic codes, said the Black Management Forum (BMF) on Wednesday.

The BMF was one of a number of stakeholders making submissions to Parliament during public hearings on transformation in the financial services sector.

BMF deputy president Dumisani Mpafa made a number of recommendations to Parliament, suggesting it should work closer with the Department of Trade and Industry to outlaw the once empowered, always empowered principle be explicitly outlawed in the amended Broad-based Black Economic Empowerment Act.

In addition, the BMF expressed its grievances over “market concentration and collusion” in the financial services industry, recommending a “hybrid model” in which the state becomes a bigger player in the sector.

The BMF also alleged that there is “anecdotal evidence” that there are racist practices in terms of credit terms, the design of financial products and the rates of these products. “This committee (standing committee on finance) must look into this.”

According to the BMF black banks need to be created so as to “dismantle” overconcentration in the market. “We made a mistake by allowing African Bank to fall upon the wayside. We didn’t protect the bank,” the forum said.

During discussion time, Floyd Shivambu from the Economic Freedom Fighters (EFF) asked the BMF what exactly the stakeholders who had made submissions wants Parliament to do.

“We oversee and make legislation. You can’t go to a dermatologist and complain about sore feet etc. Do you want us to enforce existing legislation, or change it? You’re confusing our role with government. You must understand the rules of Parliament. We’re not government,” Shivambu said.