Finance Minister Pravin Gordhan has contradicted his Cabinet colleague, Mineral Resources Minister Mosebenzi Zwane, who is calling for a judicial commission of inquiry into banks.
Gordhan said if there was anything wrong with South Africa’s banks, there were strong regulatory bodies that could deal with such problems and that our regulations were among the best in the world.
He reminded MPs that this country had a banking ombudsman among others, who had powers, and if there were people with complaints about the banks, those powers could be reviewed.
Zwane came under fire in Parliament yesterday but still refused to expand on or explain why he issued a press statement last week in which he announced “a Cabinet resolution” for a judicial inquiry into South Africa’s banking system following the decision by the banks to terminate their relationships with Oakbay Investments, a company owned by the politically-connected Gupta family.
The Presidency distanced itself from Zwane’s statement, saying he had issued it in his personal capacity and that the contents of the statement were not the government’s position.
DA MP David Maynier asked Zwane whether he would resign from the Cabinet and when he would do so.
Zwane would not answer the question directly.
He said in terms of the principle of separation of powers, the matter belonged to Cabinet and not to Parliament, adding that Maynier had no jurisdiction to ask him whether he would resign.
“As I stated during my interview with the SABC … I stated that the matter of inquiry which Maynier seems to be problematising can only be decided by the president once he has sufficiently applied his mind to the matter.
“We have been on record on this matter. It is indeed unprecedented that banks could unilaterally close accounts. This matter can therefore not be left hanging,” said Zwane.
He said many other people had come forward indicating that they have suffered at the hands of banks.
“It is important therefore to understand the importance of this matter as Parliament,” he added.
Zwane said the people of South Africa were crying over these issues and the opposition should allow the due processes to unfold.
“… And during these processes we can prove once and for all that the people of South Africa have issues with banks,” he said.
Maynier said Zwane had allowed himself to become a hired gun for the Guptas, but he misfired when he issued the statement and the damage was already done by the time the Presidency rejected his statement.
A number of DA MPs followed up, pushing for Zwane to answer the question as to why he issued the statement. But with the “protection” of National Assembly Speaker Baleka Mbete, he got away without answering the question.
Things got heated with DA MPs accusing Mbete of undermining the Constitution in protecting Zwane – DA chief whip John Steenhuisen told her “she was worse than the minister [Zwane]”.
“You are trampling on the Constitution. You are a disgrace as a Speaker. You are an embarrassment to this House and you are a bigger embarrassment than the minister,” he said.
When Gordhan was asked by the EFF’s Floyd Shivambu whether he supported the inquiry into the banks, he pointed out that banking regulation was part of the brief that his ministry has.
“As far as we are concerned, we are compliant as South Africa and amongst the most compliant. We have international requirements which emerged from the crisis and financial stability bodies and other bodies. Our standards of regulation are best as they can be.
“We also have the banking ombud which has certain powers that perhaps can be reviewed if there are customers that have problems with the banks,” said Gordhan to loud applause from the opposition benches and blank stares from his ANC comrades.
He said as far as financial institutions were concerned, there was a difficult balancing act between ensuring that there is stability in the sector, that it is well-regulated and that it doesn’t constitute a risk to the country’s economy and fiscus as learnt from 2008/09 financial crisis.
“On the other hand, we need to be equally aware that the banking sector can run away with itself. Its charges might be excessive, its service might be poor, its market conduct might be questionable as far as that is concerned. Let’s have a debate whether the powers need to be tightened,” said Gordhan.