Cape town: President Cyril Ramaphosa stated that Postbank is not yet ready to receive a licence to operate as a fully-fledged State-owned bank. While addressing the National Assembly, the President emphasized the importance of financial inclusion but noted that Postbank needs to meet several conditions before qualifying for a commercial banking licence.
According to South African Government News Agency, the President highlighted the challenges faced by Postbank, mentioning specifically its card key management processes and compliance with prudential standards. President Ramaphosa pointed out that the bank must strengthen its governance, stabilize its finances, and ensure compliance with these standards to move forward in the licensing process.
The government is committed to supporting Postbank in obtaining its licence, recognizing its potential role in providing affordable banking services to underserved communities, small businesses, and enterprises owned by youth and women. The President noted that enhancing access to banking and credit can stimulate local economies, support job creation, and empower marginalized groups.
President Ramaphosa explained that while South Africa has a developed financial services sector, there is a need to diversify and focus on underserved communities. The Postbank Amendment Act was designed to enhance this diversity by establishing Postbank as a developmental State-owned commercial bank.
The President further mentioned that any decision regarding the capitalisation of Postbank will be made only after it is authorized to establish a bank. Once authorized, Postbank will have twelve months to secure the necessary funding for registration, based on a business case presented to the government.
In addressing further questions, President Ramaphosa did not dismiss the possibility of integrating African Bank with Postbank to form a state bank, emphasizing the importance of leveraging all available assets to serve South Africa's unbanked population. He acknowledged that bringing together different entities, including those with private shareholders, would be crucial for establishing a state bank.