Johannesburg - The maintenance of financial stability is part of the mandate of the SA Reserve Bank (Sarb), an adviser to the governor and chief economist said on Friday.
This was confirmed in a recent open letter from Finance Minister Pravin Gordhan to Sarb governor Gill Marcus, adviser Monde Mnyande said in a speech prepared for delivery at the leadership forum of the Airports Company South Africa.
"The events of the past three years have, once again, highlighted the importance of financial stability," he said.
"The letter reaffirmed the role of the bank in overseeing and maintaining financial stability and, in the aftermath of the global financial crisis, has now also made this financial stability role an explicit part of the bank's mandate."
On shareholding in the Sarb, Mnyande noted that there had been "much discussion" in the media about the bank's private shareholders.
"There still appears to be a lot of uncertainty, notwithstanding a press release by the bank on January 25 2010 to clarify the matter."
Mnyande said the central banks of, among others, Italy, Japan, Pakistan and South Africa, were institutions with shareholders other than their respective governments.
"The bank is an institution created by statute, with the status of an independent legal person, which may not be liquidated other than by an act of parliament.
"Its independence is entrenched in the constitution and it is not owned by anyone but by South Africans."
Mnyande said that in this sense, it belonged to the country as a whole.
Control of Sarb was exercised between its shareholders and government in such a way that the government, in normal circumstances, might exercise ultimate control over the bank.
"Furthermore, the Sarb Act does not grant shareholders any authority to remove directors," he said.
As the bank was a statutory institution, shareholders were also unable, by means of a resolution or otherwise, to amend or change its constitution.
"The Sarb Act determines that the bank shall be managed by the board and that the governors and deputy governors must devote the whole of their time to the business of the Bank," Mnyande said.
"The board consists of a governor, three deputy governors and three other directors, all appointed by the president of the Republic (after consultation with the minister of finance and the board), and seven other directors, appointed by the shareholders."
He said individual shareholders were prevented from exercising undue influence over the control of Sarb by virtue of the prescription that no shareholder may hold more than 10 000 shares in the bank.
"They also receive a fixed dividend at a rate of 10 cents per annum on the value of their shares held, provided that profits are realised."
He said voting was restricted to one vote for every 200 shares held, with a maximum of 50 votes per individual shareholder, and that these could be exercised at meetings of shareholders of the bank.
"The concept of shareholding in the bank is based exclusively on principles of shared community representation and participation in the oversight of the bank, for purposes of increased independence, transparency and accountability, in the ultimate interest of the general public of the RSA."
Mnyande said Sarb shareholders should therefore at all times exercise their powers in accordance with these principles and avoid any actions that could be construed as an attempt by them to abuse their undue powers "for purposes of self-interest and own enrichment".
- Sapa