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Any government policy interfering with the South African Reserve Bank’s (SARB) constitutional mandate will not be implemented, Reserve Bank Governor Lesetja Kganyago assured members of Parliament.
Kganyago on Wednesday briefed Parliament’s Standing Committee on Finance (SCOF) on the central bank’s annual report as well as other issues such as the nationalisation of the bank.
The ruling party resolved that the bank should be nationalised at the ANC’s 54th national conference in December 2017.
Kganyago on Wednesday explained that the bank will only implement resolutions of the ruling party once they are translated into government policy. Even then, the bank will only implement policy if it does not interfere with its mandate.
“I have read the resolutions. I hope there isn’t something that talks about interfering with our mandate. If there is one, unfortunately I can’t implement them (the resolutions). You will be asking me to act unconstitutionally and we are a constitutionally created institution. We cannot act unconstitutionally,” Kganyago said.
The Constitution sets out the mandate for the Reserve Bank and provides for its independence, he told Parliament.
Kganyago also previously said that nationalising the bank could involve expensive legal processes, Bloomberg reported.
The Reserve Bank is one of six central banks in the world which still has private shareholders. “Since 1996, there have been several legislative changes to clarify the role of shareholders, reduce the influence of shareholders, limit the rights of foreign shareholders and reduce concentration through limiting the number of shares that related parties can hold,” he told the committee.
The SARB’s board ensures good governance, but does not have a say in policy or regulatory decisions of the bank. Government appoints eight members of the board, which include four executives. The shareholders elect seven members.
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