Chaos for South Africa’s new state-owned bank
South Africa’s soon-to-be state-owned bank, Postbank, has been left with a massive leadership hole after board members either quit or were fired by the Minister of Communications and Digital Technologies, Mondli Gungubele, this week.
On September 6, Postbank said that it was experiencing intermittent technical issues, which affected the ability of SASSA grant beneficiaries to withdraw their funds from ATMs and retailers. The glitch left over half a million beneficiaries without any income, with many still struggling to access their grants.
According to the latest General Household Survey by Stats SA, grants are the main source of income for 23.5% of all households in South Africa. Any disruption to the process can thus affect the livelihoods of millions.
As reported by the Daily Maverick, amidst the chaos, the majority of the Postbank board, except for one member, resigned with immediate effect, which they claimed was due to a breakdown in their relationship with the minister.
However, during a media briefing, Gugubele said that the board members had “preemptively” resigned, knowing that they were likely to be fired from their positions, with the minister removing the last remaining board member and placing the company under administration.
He said that one of the reasons that the board were fired from their roles was the continuation of an allegedly illegal software contract worth R140 million.
“Postbank has had a disclaimer for no less than two years. No serious-minded nation can allow a financial institution to tolerate that. Normally, financial institutions are held in the highest regard as compared to any other institution,” the minister said.
“A serious-minded leadership would not allow this to continue like this, and somebody had to accept the responsibility. In our view, the board had to accept that responsibility.”
Despite the chaos at the Postbank, the minister said that all SASSA grant beneficiaries will still be paid their September money in full.
Ramaphosa is soon to sign off
The chaos comes as the government tries to evolve the Postbank’s mandate, with the Postbank Amendment Bill only needing President Cyril Ramaphosa’s signature to become law.
The Bill will transfer the shareholding of the Postbank from the South Africa Post Office (SAPO) to the government, which will allow it to create a Bank Controlling Company (BCC) –the holding company of a bank.
The new Bill will thus allow the Postbank to operate as a fully-fledged, state-owned bank. The Postbank Amendment Bill can be found below:
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