If EFF leader Julius Malema has his way, a 'Banks Ownership Act' would be passed, ensuring the State nationalise banks without compensation. Picture: Boxer Ngwenya

Parliament - If Economic Freedom Fighters (EFF) leader Julius Malema has his way, a "Banks Ownership Act" would be passed by Parliament, ensuring the State nationalise commercial banks in South Africa without compensation.

Introducing a debate on the issue in the National Assembly on Tuesday, Malema said: "There are no banks in South Africa that have meaningful ownership by black people".

Malema said his party's manifesto appreciates other forms of ownership are not excluded -- including ownership by private individuals, the State and pension funds. 

No single investor will own more than ten percent, he said.

"Our view is that the State ownership should be prioritised but should not completely close out other forms of ownership," the fiery EFF leader said.

"This model of combined ownership, anchored by the State, makes sure banks are democratised..." 

The ruling African National Congress (ANC) rejected Malema's proposal.

ANC Member of Parliament (MP) Adrian Williams said banks would not just surrender their money.

"They are going to force this government to pay back the money," Williams said.

"South Africa does not exist in a vacuum. When it comes to international finance we are just a cog in the capitalist wheel."

He cited various examples where the State took over the ownership of banks and failed.

Williams said government would also assume the liabilities and debt, which would have an impact on the fiscus, and would result in poor South Africans and not the rich suffering.

The Banking Association of South Africa (BASA) also responded, saying the National Assembly entertaining the debate was "alarming".

"Any nationalisation of banks will have a direct impact on stability, and will seriously undermine what fragile levels of confidence remain in our economy and society," BASA said in a statement.

"We cannot allow ourselves to be in a position where we are further undermining the competitive positions that remain because of political expedience."

BASA called on Treasury to provide certainty about its policy position regarding banks.