OPINION PIECE: South African Postbank Limited Amendment Bill: Another SOE disaster creeping forward.

Dear NEASA subscriber

On 12 May 2021, NEASA published an article on the proposed new state-owned bank, titled ‘The proposed new state-owned bank – another bloodsucking SOE leech?’, in which it asserted its disapproval and scepticism for the creation of yet another leeching State-Owned Entity (SOE), assuredly also doomed for failure, grand looting and larceny.
 
Through this Bill, the ownership of the Postbank will be removed entirely from the South African Post Office (SAPO), making the Minister of Communications and Digital Technologies the sole owner and shareholder of Postbank and its Bank Controlling Company (BCC). This will entail the conversion of the Postbank into a fully-fledged bank with its own banking license, making it a new state-owned bank, together with the proposed intention to allow the Postbank to offer more financial services to the public. 
 
4 October 2022 marked the date of closure for the period for interested parties to submit comments on said Bill. Curiously, the commentary period was extended for two weeks earlier in September 2022, when the Portfolio Committee on Communications and Digital Technologies decided to extend comment on the Bill as a result of only three written submissions being received during the initial consultation process.
 
After the closure of commentary, the Bill should naturally undergo public hearings and it is of great public interest to allow interested parties to submit oral representations upon invitation. The members of the relevant Portfolio Committee will thereafter be tasked with considering and debating the Bill in the National Assembly. NEASA will keep an eye on its progression. This Bill should be rejected.
 
By the National Treasury’s own admission, in 2019, the establishment of such an institution could be a massive liability that the country can ill afford, and little clarity has emerged as to why it is being created. Recent banking failures including the failure of VBS Mutual Bank are evidence that a banking licence should not be handed out lightly.
 
We will keep subscribers abreast on the Bill’s progress in the legislative process.