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No new state bank apart from Postbank, says Gigaba

Cape Town – According to Finance Minister Malusi Gigaba, National Treasury has no intention to establish a new state bank in addition to the Postbank and other development finance institutions already in existence.

At its policy conference which ended in the first week of July, the African National Congress instructed Telecommunications and Postal Services Minister Siyabonga Cwele to establish a state bank within six months, a week after the South African Post Office’s Postbank submitted its application for a final licence with the Reserve Bank’s registrar.

In response to a parliamentary question from Anton Alberts of the Freedom Front Plus, Gigaba said there are no plans to establish a state bank. He said there are already a number of state banks, such as the Land Bank, the Development Bank of Southern Africa, Postbank and many other development finance institutions. The province of KwaZulu-Natal also owns Ithala Bank.

"While there is an initiative to review and possibly consolidate some of the development finance institutions, there is no intention to consolidate the different banks into 'one' state bank, as they serve different markets (such as agriculture, land, municipal infrastructure and retail banking)," Gigaba said.

National Treasury has been working with the Department of Telecommunications and Postal Services to establish the Postbank division of the South African Post Office as a stand-alone state bank with its own governance structures separate from the Post Office.

The Registrar of Banks gave authorisation for the Postbank to be established in July 2016, but there has been no finalisation yet on which institutional form it will take.

Fin24 earlier reported that South African Reserve Bank (SARB) deputy governor and registrar of banks Kuben Naidoo confirmed receiving a submission from Postbank for a banking licence. The application is being considered, including the legislative amendments that may need to precede the granting of such a licence.

Naidoo said the SARB is engaging National Treasury on the issue.

Gigaba said decisions relating to the institutional form of the Postbank have not been taken, and will depend on regulatory requirements as required by the Registrar of Banks, which will take into account possible costs for the fiscus.

He emphasised there is no intention to fund any equity holding in any state bank from the Government Employees Pension Fund or any other state pension or provident fund.

“The National Treasury is still engaging with the Department of Telecommunications and Postal Services on the funding of the Postbank,” Gigaba said, adding that the expectation is for the Postbank to be funded or capitalised from its own resources.

“We want to minimise any funding from the fiscus or via the sale of government assets. It is anticipated that all state banks will operate on a commercial basis, and profitably, and will not need to have recourse to the fiscus.”

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