SARB denies 'defending banking sector' | Fin24
 
  • New Notes

    Long queues have formed in Harare after Zimbabwe released new bank notes and coins.

  • Open Book

    Former President Jacob Zuma says the public protector can access his tax records.

  • Electricity

    Sowetans should pay rate of R150/month to foster a payment culture, says an ANC councillor.

Loading...

SARB denies 'defending banking sector'

Mar 29 2017 10:34
Liesl Peyper

Cape Town - The South African Reserve Bank (SARB) denied media reports quoting its deputy governor Kuben Naidoo as “defending the lack of transformation in the banking sector”.

“It is misleading,” the SARB said in a statement on Wednesday. “In fact, the Deputy Governor’s comments in Parliament were that the financial sector is highly concentrated, which has both positive and negative effects. 

READ: Why fewer large banks are good (and bad) for SA - SARB

“While a highly concentrated financial sector offers more stability, it also has its disadvantages. The SARB manages this conflict between stability and market concentration through effective and robust regulation of this sector, and relies on the relevant oversight of competition authorities. The SARB does not condone collusive behaviour of any sort. In pursuing its mandate, the SARB does not bow to any pressure, whether it is political or from the private sector.”

The SARB was one of the stakeholders which made a submission to Parliament’s standing committee on finance on Wednesday March 22 during public hearings on transformation in the financial services sector.

In the SARB’s submission, Naidoo acknowledged that the dominance of the biggest banks – Absa, Nedbank, FirstRand, Standard Bank, Capitec and Investec – pose “competition risks”, such as anti-competitive behaviour.

He added that concentration also creates a situation where the banks are “too big to fail”, which poses a risk of contagion. “If they do then fail, governments can’t bail them out,” Naidoo said.

SARB in its statement said in regulating the banking sector, the bank has many objectives which include financial stability, financial inclusion, competition and transformation. In 2016 the SARB issued three new provisional banking licenses to Post Bank, Discovery and TYME. 

“Regarding the SARB shareholding structure, we would like to clarify that SARB shareholders have no say on any policy decisions that the executive management of the SARB takes in implementing the SARB’s constitutional mandate.

READ: Why the SARB should be nationalised - analyst 

“The SARB is not driven by a profit motive and functions in the broader interests of the country,” it concluded. 

Read Fin24's top stories trending on Twitter:

NEXT ON FIN24X

 
 
 
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What do you think about private healthcare in SA?

Previous results · Suggest a vote

Loading...