Katlego Sekhu
During a state bank workshop, ANC Secretary-General Fikile Mbalula revealed that while on his visit to China, he learnt that the party should continue with its transformative development resolutions, such as the establishment of the state bank, despite changes in its leadership.
Independent Political Analyst, Khaya Sithole, joined 959 Breakfast to discuss whether this is a good idea or not.
Kaya Sithole notes that there are no merits to having a state bank that all the other banks are inadequate to provide.
“The reason the answer is none is that South Africa’s regulatory regime says that the Reserve Bank will be the one that assesses the application of every single prospective bank and will be the one that sets the rules on how the bank ought to operate,” he explained.
“So if the reserve bank already has an existing template on what banks ought to do and they are expected to do it, The government will not be spared from those rules and that guidance simply because of the name of the new bank.”
In a nutshell, a state bank is not going to be a bank that will do things differently until there’s a regulatory departure that the institution must do things differently.
Sithole does, however, highlight that the only difference in the current model might be that “all the other banks have primary obligations, which are to make as many profits as they can.”
So in that particular orientation, the state bank might take the view that perhaps their pursuit of profit is not their primary mandate.
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