Govt doesn't want to collapse banking system - Cwele

Cape Town – The ANC-led government does not want to collapse South Africa’s banking system, but rather reform it to provide access to previously disadvantaged South Africans, said Siyabonga Cwele, Minister of Telecommunications and Postal Services on Wednesday.

Speaking in a debate on President Jacob Zuma’s State of the Nation Address delivered on Thursday last week, Cwele said the ANC has repeatedly called for the fundamental transformation of the financial sector.

“Our efforts are not to collapse the banking system but the focus is on changing their monopolistic behaviour. There is a need to review the Financial Sector Charter as it relates to access to finance for small and informal businesses, financial inclusion, affordability and bank charges.”

To this end, the ANC has been calling for opening of space for a variety of sector specific banks or second tier banks such as a construction bank, stokvels bank, cooperative bank, and a variety of state banks in order to improve access and affordability to support inclusive growth, Cwele said.

“It is under this backdrop I would like to respond to the urgent need to corporatise the Postbank as directed by the developmental needs of the underserviced and the unbanked. It is a state bank, which seeks to promote the universal access to banking while at the same time providing a platform for the disbursement of various state transactions such as social grants.”

Cwele said he was excited about the fact that his Department got permission to establish a banking company and the final hurdle is now to get a banking license.

The Postbank company registration is being finalised and six names have been approved and are available to be appointed as board members of the Postbank board after undergoing the “fit and proper assessment” by the South African Reserve Bank (SARB), Cwele said.

The “final and difficult” hurdle his department is now facing is the challenge around the “Postbank Controlling Company”.

“The challenge is around the interpretation of the Banking Act which may need amendment. We are currently sharing legal opinions, which suggest this may not be necessary.”

Cwele said government will work “flat-out” to meet the 3 July deadline to submit the application requirements to the Reserve Bank.