FILE PHOTO: MEC of EDTEA, Mr Siboniso Duma opening Ithala bank account in Durban. PICTURE: Supplied
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0 JOHANNESBURG: Once signed into law, the Bill will enable the Department of Communications and Digital Technologies to position the Postbank as the state bank.
The state bank discussion continues to dominate discourse in the country with many African National Congress (ANC) leaders coming out strongly in support of the idea. For decades, the South African Communist Party (SACP) has been calling on its alliance partner, the ANC, to establish a state-owned bank.
The ANC, which has been in power since 1994, only heeded its clarion call at its 53rd National Conference, held in December 2012, under the banner of socio-radical economic transformation.
However, similar to the call itself, it has taken far too long to establish the bank, whose primary aim is to provide financial services to the poor in particular. The fifth ANC national policy conference, gave the government six months to establish it.
To date, there is still no state-owned bank. The main problem has been a how-to-go-about-it, namely whether to start the bank from scratch or turn both the Postbank and Ithala SOC Limited, into one.
There are increasing calls to have with Ithala SOC Limited Chief Executive Officer (CEO) Dr Thulani Vilakazi, saying there is no need to reinvent the wheel as Ithala has been operating as a de facto state-owned bank. For Dr Vilakazi, Ithala should be recognised as such.
Dr Vilakazi went further to indicate that Ithala, which prides itself in playing a state interventionist role in the financial sector,’ has “all the right ingredients” to assume the role of the state bank, including its infrastructural and financial capitals as well as a track record of good governance.
However, the government overlooks it in favour of the PostBank, a subsidiary of the South African Post Office (SAPO), the move that has drawn the ire of the CEO of Ithala Development Finance Corporation (IDFC), Ms Pearl Bhengu, albeit hers (Ithala SOC Limited) has the backing of the ANC KwaZulu-Natal, which pioneers the state-owned bank’s establishment.
She wants to know why Ithala, founded in the early 2000s, has been excluded from the South African Postbank Limited Amendment Bill, passed by the National Council of Provinces (NCOP) on 20 June 2023. Once signed into law, the Bill will enable the Department of Communications and Digital Technologies to position the Postbank as the state bank.
“We know, we have made a comparison between the Post Office and Ithala and we have seen (that) Ithala is stronger than the Post Office,” said Bhengu, speaking at the ANC KwaZulu-Natal’s two-day workshop on state-owned bank.
With the backing of the ANC in KwaZulu-Natal, there is still some hope for Ithala to become a state bank or a subsidiary of the state-owned bank.
“Our comment as a province says don’t talk about just PostBank, talk about Postbank and regional banks and everyone would be covered and we should put that in writing,” says ANC deputy provincial chairperson Nomagugu Simelane-Zulu.
ANC provincial chairperson Mr Siboniso Duma came out strongly during the workshop and said the move was in line with the governing party’s 2017 resolution to establish a bank. Mr Duma said Ithala Bank in KZN, which is the only province that operates a state-owned bank, should not be sacrificed and instead be a subsidiary of a national government-operated banking system.
SACP national spokesperson Alex Mashilo agreed with Mr Duma, stressing about the delay the country has taken in establishing the state bank by 30 years at the expense of “workers and the poor and subjected them to financial exploitation by private banks”.
Dr Mashilo said Ithala Bank was a provincial bank and should remain as part of a national banking system.
“A national public banking system will have different banks, from provincial banks to municipal banks that are publicly owned,” he said.
The ball is thus in the ANC KwaZulu-Natal’s court to push for Ithala to become the state-owned bank.
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