Cosatu: Postbank needs cash injection
Postbank requires a state capital injection for it to have sufficient funds to compete with existing commercial banks and lend to customers, says Cosatu.
“Currently the Postbank is owed about R4.5bn by the Post Office. If it does not get some liquidity, then it will be stillborn,” said Cosatu acting spokesperson Matthew Parks.
“Many workers, the poor, the elderly, persons living with disabilities, those living in informal and rural areas, and other vulnerable persons have long been redlined by mainstream commercial banks, leaving them unable or struggling to access banking and financial services.
“Our banking and financial sectors are rife with anticompetitive and monopolistic behaviour, a tendency to milk consumers with excessive bank charges, exploit banking workers with slave wages, and an ambivalence towards supporting job creation and local investments and procurement.”
President Cyril Ramaphosa proclaimed the commencement on Monday of the new SA Postbank Amendment Act. The legislation provides for the transfer in shareholding in Postbank from the SA Post Office to government and the creation of a bank controlling company in terms of the Banks Act.
Postbank cannot provide a full range of services, including credit facilities, until it is granted a full banking licence. It is used by millions of social grant beneficiaries to withdraw their funds from ATMs and retailers.
Postbank’s governance is in disarray, with no permanent board after the mass resignation of directors in September last year. They accused communications & digital technologies minister Mondli Gungubele of being hostile and oppressive, which he has denied.
The bone of contention between the previous board and Gungubele relates to a payment dispute with switching provider FFS and later a firm called Electronic Connect. These firms provided switching services software, a payment technology that enabled the Post Office and later Postbank to disburse more than 6-million grants.
Gungubele appointed Khaya Ngema as Postbank’s administrator while he continues the search for new board members.
COMPETITION
Parks said: “If it is to meet its developmental objectives, government needs to provide the necessary support, including recapitalisation, and the appointment of competent management for the Postbank and Post Office to grow and thrive. Equally, government institutions need to support the Postbank as the institution of choice for government banking needs.
“This will inject competition. It will help workers and the marginalised access banking and financial services.”
Postbank said in its annual performance plan for 2023 that it aimed to finalise its banking licence application to the Reserve Bank in 2023/24, with a full banking licence within the next year.