Sechaba ka’Nkosi
THE POST Office bank would be opened as soon as its registration with the Reserve Bank was finalised and the government would consider awarding the distribution of social grants to it to deal with the never-ending disputes over the lucrative tender.
In an exclusive interview with Business Report this week, Deputy Telecommunication and Postal Services Minister Hlengiwe Mkhize revealed that studies on the viability of the bank had been concluded and that there was a budget in place to fund it.
She declined to comment on the viability study as well as what budget was being considered. Mkhize said that the matter was now left with the registrar of the Reserve Bank to finalise the registration.
Hlengani Mathebula, the Reserve Bank spokesperson, was not able to comment.
“The Post Office had a financial service of some kind in the past, but it was not a fully fledged bank, so we decided to push for the registration of the bank with the same conditions as other banks and board members,” said Mkhize.
Grants
“If you look at the grants, they amount to billions, and if the Post Office bank was viable, there is no reason why the grant system should even be put to tender and be given to those who have contracts instead of just making sure that it benefits the developmental needs of those people instead of privatising such an essential service.”
In terms of the SA Reserve Bank Act, registered banks are supervised by the registrar to ensure deposits taken from the public are not used improperly and that consumers were protected from losing their money in cases where they ran into financial difficulties.
Mkhize said the Post Office bank would be able to operate like established banks and be able to lend money to consumers and also keep large deposits in its vaults.
Mkhize insisted the bank would also look into exploring new areas of growth and would form part of the Post Office’s overall turnaround strategy.
“Things like grants, like salaries of municipal workers, there is no reason why those should not be handled by the Post Office bank,” said Mkhize.
Social grants have become a hotly contested issue between the Department of Social Development, which handles the grants on behalf of the government, and companies who distribute them.
In March the Constitutional Court ordered the SA Social Security Agency to make changes to the Request for Proposal by April 17 following its ruling that the tender be awarded by October.
The court found that the original R10 billion contract awarded to JSE-listed Net1’s Cash Paymaster Services (CPS) for five years was constitutionally invalid.
CPS won its contract early in 2012 but was immediately taken to the high court by the losing bidder AllPay.
But after a meeting by counsel behind closed doors at the Constitutional Court, the parties agreed to address CPS’ concerns and said until the tender was awarded, CPS should continue to administer the payments of the grants.
Yesterday, CPS could not comment on the story.