When the Public and Commercial Union of South Africa was launched on December 16, 2021, during Dr Vuyo Dyanti’s acceptance speech, one of the first issues he impressed upon to members of the union and civil society present was that the banking industry has a race sickness, and the time to stone the modern-day Goliath is upon us.
South Africa has a well-recognised banking oligopoly. We also have a banking ombudsman who represents the consumer and a self-regulated body, the Banking Association South Africa (Basa), which exists to advance “the interests of the industry with its regulators, legislators and stakeholders, to make banking sustainable, profitable and better able contribute to the social and economic development and transformation of the country.”
I’m particularly curious about Basa’s stance on advancing “industry” interests at this juncture. With 90% or more of the banking sector controlled by just six banks, just whose interests are being advanced here?
It certainly doesn’t look like it’s helping out the banking little guys from getting a much bigger stake of the country’s banking pie, and from where I’m sitting, it is clear that the sector is still largely untransformed, while majority of clientele is beyond doubt black, which is the core of the industries existence – at a business and individual level.
Banks don’t do anything without there being some form of financial upside for their own gain. So, with it being a very much a topical issue, I find myself asking, what do they hope to gain by shutting down the bank accounts of the Independent Media and Sekunjalo Group of companies?
In what appears to have been a sustained trial by opposition media, Independent Media has been found guilty in the court of public opinion – but guilty of what? Climbing on the guilty until proven innocent bandwagon, several South Africa’s banks have chosen to follow the rabbit hole of media hyperbole into the realm of acting first and apologising later (or never).
Given the nature of the oligopoly that governs the banking landscape, it’s no real surprise that South Africa’s banking elite have all followed similar patterns in choosing “Reputational Risk” to disassociate themselves from Independent Media and companies within the Sekunjalo Group.
I recently came across a broadcast interview by someone named Van Rensburg, who went to great lengths to explain the definition of reputational risk when it comes to the banking sector. In short, a bank’s standing in the global community is determined by the company it keeps.
Following that theory, then the likes of the international companies Steinhoff, EOH, Investec and even the banks themselves (Rand fixing and Nedbank and Standard Bank’s fingering in the Zondo Commission) should have had the banking community running for the hills. Not to mention foreign direct investors, although on that score, South Africa is doing its own damage, underpinned by scores of skilled South Africans departing our shores (and their banks).
So, is it a question of the collective establishment simply not liking the good Doctor, then? Likeability should not, and cannot ever be, a basis for terminating a banking facility. Given that neither Dr Iqbal Survè nor any of the companies in the group are on trial here and de facto still innocent, why are they targets?
The banks say they are concerned about how the international banking community will perceive dealing with them and the country, if they continue to bank the Sekunjalo Group of companies. For punctuation, I repeat, they have not been tried and are still innocent of any wrongdoing until proven otherwise.
But surely, it is far more damaging for the banks and the country, for the international community to believe that South Africa is a place that subverts the rule of law and finds people and entire companies, guilty before being tried? Merely on the basis of some mudslinging by well-placed individuals in the media.
What trust can any investor have in this country that if they do not fit the bill of what a bank wants at that time, it will find itself in the same predicament? In fact, any of us can find ourselves facing the wrath of the banks and discovering that we are suddenly persona non grata. Even as the author of this piece, I could face their ire and find myself excommunicated from my own banking facility.
That’s the might these banks wield daily. They are above the law. They are seemingly accountable to no-one, certainly not the government.
Calling the shots
The basis for banks to continue banking companies and individuals who have been found guilty of serious financial crimes, is apparently, they have said, because some form of remedial action has occurred. Yet, not all guilty companies have had to perform this bidding. For some, the status quo is unchanged.
For others, it’s an entirely different beast.
The principle here is clear. Some people and companies cannot be touched by banks, even when found guilty. And some people can be discarded even when they have never been found guilty.
History has shown that despite so-called regulations and oversight, the banks are a law unto themselves, and whether you are a fan of the Sekunjalo group of Companies or not, Standard Bank’s notice to the Sekunjalo Group has triggered a long overdue discussion that stresses the need for deep change in South Africa’s banking landscape. Today it is Sekunjalo. The question then is: who is next?
Tahir Maepa is the Secretary General of Public and Commercial Union of South Africa.
* The views of the column are independent of Business Report and Independent Media.