South Africa’s minister of finance, Tito Mboweni, has announced his intention to introduce the Financial Matters Amendment Bill in the National Assembly in January 2019.<\/p>\n
In an explanatory summary published on Wednesday (16 January), Mboweni indicated that the bill plans to amend a number of current pieces of legislation – including the Insolvency Act, the Military Pensions Act, and the Auditing Profession Act.<\/p>\n
Arguably the biggest change, however, is an amendment to the Banks Act (1990) to allow for certain state-owned companies to be considered as public companies for purposes of the application of the Banks Act.<\/p>\n
The amendment also determines prerequisites for these companies and their holding companies to qualify to apply for establishment as a bank, and provides for inconsistencies between the Banks Act and certain other legislation with respect to state-owned companies.<\/p>\n
What it means for banking<\/strong><\/p>\n Chantel van Zyl, an associate at Baker Mckenzie, said that the introduction of a state-owned bank would mean that – for the first time – a state-owned entity would be able to participate fully in the retail and commercial banking sector in competition with the private sector in South Africa.<\/p>\n Currently, the Banks Act only allows public companies to register as a bank or bank controlling company.<\/p>\n She added that the\u00a0amendments would allow Postbank and the Land Bank to register and operate as fully operational banks.<\/p>\n \u201cPostbank, which currently operates under various exemptions to the Banks Act, which were required for the bank to accept deposits, does not have a banking licence and is unable to operate as a fully-fledged bank,\u201d she said.<\/p>\n \u201cThis may change, however, should the amendments to the Banks Act be promulgated.<\/p>\n \u201cIf Postbank is awarded a banking licence, it would be entitled to operate as a fully-fledged bank.\u201d<\/p>\n In November 2018, Postbank indicated that it had double the amount of capital it needed to operate as a bank.<\/p>\n \u201cPostbank also noted that, once it has obtained a banking licence, it intended to pursue opportunities to provide government-to-citizen services as well as lending activities with a focus on offering loans to small start-up businesses, Small, Medium and Micro-sized Enterprises (SMMEs), small-scale agricultural operations and the like,” said\u00a0van Zyl.<\/p>\n The note can be read here<\/a><\/strong>.<\/p>\n
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