- Minister Stella Ndabeni-Abrahams told Members of Parliament that her department still had a banking licence for Postbank on its radar.
Minister of Communications and Digital Technologies Stella Ndabeni-Abrahams told Parliament on Wednesday afternoon that plans to unbundle Postbank from the SA Post Office had sparked excitement among South Africans and companies in the banking sector alike, who were keen to see the change a licensed state bank with bring to the market.
Plans to convert Postbank into a fully-fledged bank with its own banking licence emerged in earnest in 2017 when the Postbank sent an application for a banking licence to the South African Reserve Bank that year.
However, the application process has seen several delays since, with the Department of Communications having to remind South Africans last year that it would continue to press on with plans to get the licence.
Last year, the bank recorded account growth of just 0.5% and – due to not having a full banking licence – it has been unable to offer credit services. The Covid-19 pandemic, meanwhile, cost it approximately 18% of its revenue, Business Insider reported.
It subsequently opened millions of accounts to serve customers receiving social relief of distress grants.
Replying to questions orally in a virtual plenary of the National Council of Provinces, Ndabeni-Abrahams said her department was aware of the challenges Postbank faced in terms of the unbundling but said both it and National Treasury had to be thorough in the process.
"We asked National Treasury [for] support in ensuring there is a clear plan for the Post Office as well as the Postbank. We need a bank that is capable, with financial status and resources and that is why we have the unbundling to repurpose aspects of the Postbank," said Ndabeni-Abrahams.
Ndabeni-Abrahams said, in light of the financial challenges that the South African Post Office has faced in recent years, it was critical that government invest time in ensuring the Postbank had the means to service South Africans in finance.
"A bank's controlling company must be financially stable such that it does not have a negative impact on the bank. The licensing requires us to look at the entire ecosystem. The Postbank is a bank that is closest to the poor and could do a lot of good for them. We are pursuing that license because it needs to function like a fully-fledged bank," Ndabeni-Abrahams said.
When asked by MPs whether Postbank could be viable on its own as a bank, Ndabeni-Abrahams said ordinary South African people and businesses in the banking sector alike were waiting with anticipation for the Postbank to be established as a fully-fledged bank.
"I would encourage members to utilise the bank and see that there are services the bank can offer. Whether R350 grants or not, when we report on the balance sheet the bank has been doing well because there have been more deposits and transits," she said.
Members including Democratic Alliance MP Tim Brauteseth from KwaZulu Natal and Freedom Front Plus MP Armand Cloete from the Free State asked how government hoped to prevent Postbank from falling prey to corruption, to which Ndabeni-Abrahams simply urged MPs to "have faith".
"The ANC government is doing everything in its power to fight corruption. We will be in a good place to ensure this bank services the people. Everyone in the process has agreed to look into the detail and policy from all angles," she said.
Ndabeni-Abrahams told MPs that she was aware of delays and backlogs at Post Office branches in the delivery of services, especially to low income communities where it relates to grant relief provisions, saying the Post Office was working with local authorities to address the problem.