Ramaphosa: Post Bank fails to meet banking licence requirements

President Cyril Ramaphosa said on Tuesday that the Post Bank has not yet fully met the conditions for a banking licence, particularly around its card key management processes and compliance with the prudential standards that are required.

Ramaphosa said the immediate challenge was to strengthen the Post Bank’s governance to ensure compliance with prudential standards and to stabilise its own finances.

He was responding to oral questions by ANC Chief Whip Mdumiseni Nuli, who asked whether the government has established the need to capitalise the Post Bank to ensure its commercial viability after he emphasised in his State of the Nation Address earlier this year that the creation of a state bank entailed the licensing of the Post Bank.

“Capitalisation of the bank will be considered once the Post Bank is granted authorisation to operate as a bank, after which it has 12 months to raise the funding to become a registered bank.

“This will be determined by its business case, for which the Post Bank board is responsible, and submitting the business case to the government via the Minister of Communications and Digital Technologies,” he said.

Ramaphosa also said Minister of Communications and Digital Technologies Solly Malatsi, as the representative shareholder and executive authority of the Post Bank, was tasked with ensuring that the Post Bank received the necessary support to obtain the banking licence.

“I am sure and certain that these requirements should be met and will be met, and all that we need to focus on is the timeframe through which the bank itself will be able to meet all these requirements.”

Asked by ANC Deputy Chief Whip Doris Dlakude about risks in termination of the Master Service Agreement with South African Social Security Agency (Sassa) for the payment of social relief of distress grants, Ramaphosa said the agreement no longer served any purpose due to the termination of cash pay points and other over-the-counter services at the Post Office.

“The department is, however, in discussions, and this has involved multi-departmental type of discussion to try and forestall the fallout.”

EFF Chief Whip Nontando Nolutshungu asked whether he would support her party’s proposal for the state to use the asset base of the African Bank.

In his response, Ramaphosa said there was a general agreement that there should be a state bank.

“The whole question is, really, how do we then move forward to put it together, and how do we put all the key elements, whether they reside in the Post Bank, could be part of them.”

He was confident that they have moved quite considerably closer to what could finally emerge as a state bank.

“Of course, the key question is going to be capitalisation, and if current assets that reside elsewhere can be put together, and with whatever input the government can make to set up a state bank. I do believe that the state bank is no longer a question of whether it will be set up or not. It is really the mechanics of how we go about setting up.”

Responding to DA MP Alexandra Abrahams, whether the Post Bank won't become yet another VBS Mutual Bank as it was looted R100 million after the Reserve Bank repeatedly warned of security vulnerabilities, Ramaphosa assured that state-owned financial services will operate with a greater sensitivity to serve the interests of South Africans.

“What we are seeking to do now is to forestall, to make sure that what happened, for instance, in VBS, does not happen... When the Post Bank finally gets that licence, it will join that league of well-regulated bodies and well-managed bodies to ensure that things like fraud and the disappearance of money do not happen willy-nilly.”

mayibongwe.maqhina@inl.co.za