The Banking Association of South Africa (BASA) has published its transformation in banking report, detailing the progress made by banks in transforming the industry and increasing economic inclusiveness and empowerment.
The report shows that the banking industry continues to transform in almost all areas, and that for the first time there are more black African than white middle managers.
However, the association called out government and labour unions for failing to take a ‘rational approach’ to many of the problems that still exist.
“The frustration that often mars the debate about transformation in South Africa is a result of some of the unmet expectations of our post-apartheid dispensation and the increasingly high levels of poverty, unemployment and inequality that continue to divide the country by race,” said Bongiwe Kunene managing director of the Banking Association South Africa.
She said that blame and finger-pointing for not meeting the reasonable expectations of black South Africans is all around.
“Government claims business does not willingly embrace transformation. Business claims the government is stalling the necessary economic reforms – while labour makes unaffordable and unsustainable demands that increasingly serve only the interests of union members.
“The environment has become such that having a rational discussion about transformation has become almost impossible, resulting in a stalemate on critical issues.”
Kunene said that the legislative framework governing transformation has been subject to numerous attacks in and out of courts.
Some of the court actions have been a result of different interpretation of the laws, while there have also been instances of authorities making demands on regulated entities that go beyond what the law requires, she said.
“The spirit of co-creation and problem-solving in the interests of all has given way to a hardening of attitudes and a loss of trust all around – such is the nature of the politics of transformation and empowerment in our country.
“Patience among the majority of South Africans, meanwhile, is running out and the legitimacy of those who sit around negotiating tables is fast being eroded.”
How to fix it
To address these issues, Kunene said that government, business and labour can take the following actions:
- Stop pursuing unsustainable vanity projects under the guise of transformation, such as bailing out constantly failing state-owned enterprises, as this will ruin public finances and cause more harm than good.
- Implement urgent structural reforms, as set out in President Cyril Ramaphosa’s South African Economic Reconstruction and Recovery Plan.
- Create an environment that encourages different parties to deploy their capacities to the maximum extent possible, which will in turn benefit the rest of society.
“Banks have a unique role in the economy: they hold the savings and earnings of South African workers, professionals and companies, which they then use to finance the investment necessary for social and economic development,” Kunene said.
She added that banks are intensively regulated to ensure they do not place depositors’ funds at undue risk and are able to repay their customer’s on-demand, with agreed interest.
“Banks are well aware of the perception that, given the resources they can marshal, they should do more to boost transformation and empowerment.
“While some criticism of banks may be valid, this report shows – in hard numbers – that banks are committed to the recovery and reconstruction of the economy and the transformation of their industry.