SARB: EFF amendment bill does not challenge mandate, independence

SARB governor Lesetja Kganyago. (Photo: File, Gallo Images)
SARB governor Lesetja Kganyago. (Photo: File, Gallo Images)

The independence and mandate of the South African Reserve Bank (SARB) is not being challenged by the EFF’s proposed amendment bill, the bank says.

The EFF on Thursday tabled an amendment bill to nationalise the Reserve Bank. Apart from proposing that ownership be transferred to the State, the bill also proposes that the finance minister appoints certain members of the board of directors, as opposed to this power resting with shareholders.

It also proposes that the finance minister appoint auditors, among other things.

"The bank has noted that the proposed Amendment Bill does not in any way alter either its primary mandate of price stability, neither its independence (sic)," the Reserve Bank said in an emailed response to Fin24.

The Reserve Bank also said that it would engage with the parliamentary processes regarding the bill at the appropriate time.

Earlier this week, Reserve Bank Governor Lesetja Kganyago briefed the Standing Committee on Finance (SCOF) on the central bank’s annual report. He also responded to questions from MPs regarding the ANC’s resolution to nationalise the bank. The resolution was adopted at the ANC’s 54th elective conference.

Of this, he said the Reserve Bank would wait for resolutions of the ruling party to be translated into government policy. Only policy which does not interfere with the bank’s mandate will be implemented, he said.

"I have read the resolutions. I hope there isn’t something that talks about interfering with our mandate.

"If there is one, unfortunately I can’t implement them (the resolutions). You will be asking me to act unconstitutionally and we are a constitutionally created institution. We cannot act unconstitutionally," he said.

The Reserve Bank is one of six central banks in the world which still has private shareholders. Shareholders are limited to holding 10 000 shares, of the 2 000 000 shares issued. Shareholders receive a dividend of 10c per share each year.

Shareholders, however, have no influence on policy decisions of the SARB. They can elect seven non-executive members of the board, appoint auditors and determine their remuneration.

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