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Cape Town - The South African Reserve Bank Amendment Bill is not a precursor to the nationalisation of the central bank, Econometrix economist
Azar Jammine said on Monday.
The proposed legislation, unveiled by Finance Minister
Pravin Gordhan on Monday, will among other things limit the number of shares the bank's private shareholder may hold. Gordhan said it was to "ensure the bank's independence is not tampered with...and that [private shareholders] interests do not undermine public interest and that Sarb's independence is not interfered with".
Jammine agreed, saying the bill will buttress the bank's independence.
Gordhan said that one of the objectives of the bill was to stop backers from circumventing the law's current limitations of a maximum of 10 000 shares per shareholder.
The bill also enables the president to reappoint the bank's governor and deputy governors for periods of less than five years, while it also establishes a panel that will vet appointments to the board.
Gordhan also announced that a more comprehensive review of the overall legislative framework within which Sarb operates, will be done in the next six months.
The laws currently governing the bank are over 20 years old.
Dismissing speculation about the bill being a forerunner to eventual nationalisation of Sarb, Jammine said: "This [view] is a storm in a tea cup. Essentially the bill is a reaction to the nuisance value that has been posed by private shareholders. It is essentially government formalising its relationship with the Sarb and making this more explicit."
Standard Bank economist Johan Botha concurred, saying Gordhan's move was one that would secure independence for the bank and should, therefore, be welcomed.
Gordhan and Sarb Governor
Gill Marcus have been critical about the manner in which certain private shareholders have been conducting themselves. For example, shareholder Michael Duerr had a stand-up argument with former Governor
Tito Mboweni last year in which he demanded (barefoot and in full traditional Bavarian regalia) to discuss the bank's annual financial statements.
The same meeting saw shareholder Mario Pretorius accuse Mboweni of racism. These shareholders have been agitating for the bank to increase its fixed dividend payout of 10 cents a share.
- Fin24.com