Postbank licence application ready in two months
• Application to be submitted to get Reserve Bank nod within two months
Postbank is to submit its section 16 licence application to get final Reserve Bank approval to establish a bank in two months, says acting MD Shaheen Adam. This would enable Postbank — already a deposit-taking institution — to lend money, South African Post Office CEO Mark Barnes told Business Day.
Postbank expects to submit its section 16 licence application to get final Reserve Bank approval to establish a bank in two months, says acting MD Shaheen Adam.
This would enable Postbank — which is already a deposittaking institution in terms of the Postal Services Act and a participant in the payments system — to lend money, South African Post Office CEO Mark Barnes says.
“Postbank is a fully fledged bank, but it hasn’t as yet got authority to lend money,” Barnes said on Friday.
It could start lending money within three months, if it were granted a bank licence at the end of June, he said.
“Our deadline [for the section 16 licence application] is the end of June, but we hope to submit sooner. We’re pulling out all the stops to make sure we get it submitted,” Adam said.
The Postbank was in the process of establishing a board that would then appoint a CEO, the acting MD said.
The Reserve Bank had approved the proposed appointment of five nonexecutive directors, two directors and five executives at Postbank, Kuben Naidoo, the registrar of banks, confirmed to Business Day.
These individuals were deemed to be fit and proper in terms of the Banks Act, he said.
The Treasury and Cabinet now needed to sign off on their appointments, said Adam, who would put himself forward for the position of Postbank CEO.
Postbank had R4.9bn in deposits and 6-million bank accounts, mostly among lowincome consumers, Adam said.
It had R2.7bn in reserve capital and had been “consistently profitable”, he said.
Postbank could facilitate the payment of social grants, the distribution of which the Post Office could be ready to do in the next nine months, Barnes said.
The Constitutional Court on Friday gave the South African Social Security Agency (Sassa) and the Department of Social Development 12 months to institute a new plan to pay social grants, when the reinstated Cash Paymaster Services contract expires.
The social grants contract, worth billions of rand, would solve the South African Post Office’s profitability and revenue concerns, said Barnes. “Even if this money is paid to the Post Office, it remains within the fiscus, as the Post Office is an organ of state. We can deliver at a competitive rate [and] if we were instructed to do it at cost, we would,” Barnes said.
“Payment of grants is a government service, not a private sector venture.”
The Post Office was backed by a R4.2bn Treasury guarantee and had private borrowings of about R3.7bn, he said.
Adam has previously said the Postbank hopes to win more state business, such as the Sassa contract and paying salaries for provincial governments.
“We can utilise the distribution services of the Post Office to expand our range of services to government,” he said.