{"id":827428,"date":"2025-06-11T07:00:00","date_gmt":"2025-06-11T05:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=827428"},"modified":"2025-06-11T12:21:24","modified_gmt":"2025-06-11T10:21:24","slug":"south-africas-new-state-owned-bank-is-in-trouble","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/827428\/south-africas-new-state-owned-bank-is-in-trouble\/","title":{"rendered":"South Africa’s new state-owned bank is in trouble"},"content":{"rendered":"\n

South Africa’s new government-owned bank, the Postbank, has yet to apply for a banking licence from regulators, but is taking on critical payouts for the state.<\/p>\n\n\n\n

The upgraded Postbank aims to broaden access to banking services across South Africa, focusing on prioritising rural and lower-income communities.<\/p>\n\n\n\n

Under the South African Post Office, the Postbank offered some banking services, but it was strictly a savings subsidiary.<\/p>\n\n\n\n

Things changed for the group after President Cyril Ramaphosa signed the Postbank Amendment Bill into law in September 2023. <\/p>\n\n\n\n

This formally transferred Postbank\u2019s shareholding from the embattled South African Post Office to the government.<\/p>\n\n\n\n

The shift allowed for the creation of a bank-controlling company, Postbank SoC Limited, which allowed Postbank to become a fully-fledged bank in South Africa.<\/p>\n\n\n\n

Despite keeping the Postbank name, the new laws allow it to become a separate banking entity, opening the path for it to offer transactional accounts, credit, and other banking services.<\/p>\n\n\n\n

However, according to GroundUp<\/a>, the South African Reserve Bank (SARB) has confirmed that the Postbank has still not applied for a full banking licence, putting these plans on ice.<\/p>\n\n\n\n

This comes amid a nationwide push to get social grant beneficiaries to switch to the new Postbank Black Cards.<\/p>\n\n\n\n

The SARB said that the Postbank needs to apply in terms of section 16 of the Banks Act for registration as a bank. The Prudential Authority has not received an application in this regard.<\/p>\n\n\n\n

GroundUp noted that the Postbank operates as a Designated Clearing System Participant per the Payment System Act.<\/p>\n\n\n\n

This allows it to issue payment instruments like the SASSA Gold and Postbank Black Cards without a full banking licence.<\/p>\n\n\n\n

Postbank, however, stressed that becoming a fully-fledged licensed bank is part of its broader mandate, and that it intends to apply for a banking licence and is on track to do so.<\/p>\n\n\n\n

New team and question marks<\/h2>\n\n\n
\n
\"\"<\/a>
Minister of Communications Solly Malatsi and President Cyril Ramaphosa<\/figcaption><\/figure><\/div>\n\n\n

In addition to a banking licence, several other developments have occurred at the state-owned bank, with Minister of Communications Solly Malatsi opening applications for Postbank board members.<\/p>\n\n\n\n

Applications closed in February, and the new board was set to oversee the strategic direction and governance of the Postbank in terms of the Banks Act.<\/p>\n\n\n\n

Candidates are required to have diverse skills, knowledge, and experience in overseeing a state-owned or private financial institution.<\/p>\n\n\n\n

Candidates will also need at least five years of board experience and at least eight years in an executive or senior management role in the banking or finance sector.<\/p>\n\n\n\n

The department said it was looking for candidates with knowledge, experience and skills in the following areas:<\/p>\n\n\n\n

    \n
  • Transformation for diversity and equity<\/strong>: promoting financial inclusion.<\/li>\n\n\n\n
  • Banking and Financial Services<\/strong>: transactional, lending, borrowing, investment operations and banking information technology at senior management level.<\/li>\n\n\n\n
  • Finance and Economics<\/strong>: financial management, accounting, auditing and economics.<\/li>\n\n\n\n
  • Risk Management<\/strong>: credit, market, liquidity, interest rate and operational risk.<\/li>\n\n\n\n
  • Corporate Governance<\/strong>: Experience in providing oversight based on best practice corporate governance frameworks for South Africa.<\/li>\n\n\n\n
  • Compliance<\/strong>: legislative and regulatory compliance and compliance risk management.<\/li>\n\n\n\n
  • Legal<\/strong>: corporate or commercial law relevant to financial institutions.<\/li>\n\n\n\n
  • Project Management:<\/strong> management of projects within financial sectors.<\/li>\n<\/ul>\n\n\n\n

    Despite the developments, there have been serious questions over the Postbank and whether the state needs to create a new bank, given the broader troubles facing South Africa’s state-owned companies.<\/p>\n\n\n\n

    Questions have also been raised about the need for another bank, given the large number already in operation and the various operating models covered.<\/p>\n\n\n\n

    Over and above this, the state’s poor track record with handling banks has also thrown up red flags.<\/p>\n\n\n\n

    The recent court and government battles involving the KZN-based Ithala SOC Limited have highlighted these risks.<\/p>\n\n\n\n

    The Prudential Authority applied to the Pietermaritzburg High Court for the provisional liquidation of Ithala, whose shareholder is the KZN provincial government.<\/p>\n\n\n\n

    This comes amidst a series of regulatory and financial challenges faced by Ithala. Following the provisional liquidation, National Treasury approved a R2.2 billion guarantee to protect depositors.<\/p>\n\n\n\n

    These concerns have not been abated by the bank\u2019s latest financial report, which showed that the bank is technically insolvent. <\/p>\n\n\n\n

    This means it cannot settle all its liabilities by liquidating its assets. The bank\u2019s declining capital adequacy ratio also jeopardises its chances of getting a banking license. 
    <\/p>\n","protected":false},"excerpt":{"rendered":"

    Despite the transfer of the Postbank to the South African government, it still hasn’t applied to get a banking licence with the Prudential Authority. <\/p>\n","protected":false},"author":95,"featured_media":686009,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[1799,3784],"class_list":["post-827428","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-nedbank","tag-postbank"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/827428","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=827428"}],"version-history":[{"count":8,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/827428\/revisions"}],"predecessor-version":[{"id":827765,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/827428\/revisions\/827765"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/686009"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=827428"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=827428"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=827428"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}