Cape Town - Cosatu has called for Postbank to be reoriented into a state bank following the approval last week by the Cabinet of the submission of the South African Postbank Amendment Bill of 2021 to Parliament.
Calls for the establishment of a state bank to give South Africans an option other than commercial banks have also come from the Black Business Chamber, political parties and analysts.
Cabinet spokesperson Phumla Williams said the Amendment Bill, which provides for the establishment of the South African Postbank Holding Company in terms of the Banks Act of 1990, has gone through public consultation to strengthen it.
Once adopted into law, Postbank will be able to operate as a separate entity with its regulatory framework outside of the SA Post Office (Sapo), said Williams.
Cosatu spokesperson Sizwe Pamla said: “We need a state bank; our position is that it is long overdue.”
He said Cosatu hoped that turning Postbank into a state bank was the end goal of the Amendment Bill, but worried that no evidence of such a move had been seen so far.
Pamla said Cosatu was nevertheless supportive of any efforts to reorient Postbank into an institution that is going to be critical to delivering services as it does with social grants.
“The commercial banks we have are all focussed on consumption lending because that’s where they make most of their profits by charging higher interest, which is also where the bonuses of the executives come from,” said Pamla.
He said banks are happy to give people R500 000 to buy a car at a moment’s notice, but that the same people could spend a year trying to get approval of the same amount to start a productive entity.
Black Business Chamber secretary-general Mntuwekhaya Cishe said that while the idea of Postbank being a state-owned company might sound like a good idea, the public would be naive to believe it could now address the plight of grassroots businesses.
He said there were already state-owned financial institutions meant to assist grassroots businesses, and yet they did not do so.
“Our view is that what is needed in South Africa is a fundamental shift in terms of the policies that entrench bureaucracy and that are unfavourable towards a developmental trajectory.”
Meanwhile, Parliament’s Portfolio Committee on Communications on Tuesday was briefed in camera by the Department of Communications and Digital Technologies on the unbundling of Postbank from SA Post Office.
Committee chairperson Boyce Maneli said the session was held in camera as they were dealing with “matters of commercial sensitivity on Postbank’s turnaround strategy”.
Among the matters discussed were Postbank’s proposed future as a standalone entity, including its financial sustainability, as well as the services it provides to the public vis-à-vis other commercial banks.
Legal expert Mpumelelo Zikalala, of Durban-based Zikalala Attorneys, said he doubts that conventional banks can ever be transformed to accommodate members of the previously disadvantaged black communities, and urged the speedy establishment of state-owned or black-owned banks.
Zikalala said the existing commercial banks were abusing their absolute power to the detriment of black people and black-owned companies. He accused the major banks and the Banking Association of SA (Basa) of denying emerging banks membership if they do not toe the line.
“If you don’t toe their line, forget seeing the light of the day in terms of the proper fully-fledged commercial bank. You will always be at the bottom of the food chain, treated as a high-level stokvel institution,” he said.
SACP spokesperson Alex Mashilo urged the government to step in without delay and establish its own financial institutions to counter attack the existing monopoly, for the benefit of the people.
“In China, they have industrial and commercial banks of China; they also have major state banks for each major state sector that they want to build,” said Mashilo.
During a roundtable in February 2021, President Cyril Ramaphosa and then Finance Minister Tito Mboweni both expressed their support for a state bank, specifically as a way of providing loans to poorer South Africans.
Ramaphosa said that the country’s banking sector was controlled by just a few banks and South Africans need more options in terms of accessing loans.