Reserve Bank bill process challenged

The Reserve Bank was pushing through amendments to its founding act with “unseemly haste”, Charl Kocks, head of African governance ratings agency Afrika Ratings, told MPs yesterday.

His criticism adds to the chorus of complaints by disgruntled Bank shareholders who object to the proposed amendments, intended to limit their power to elect representatives to the Bank’s board.

Countering this opposition during public hearings on the South African Reserve Bank Amendment Bill held by Parliament’s two finance committees were the National Economic Development and Labour Council (Nedlac) social partners.


Kocks assured the committee that Ratings Afrika had no vested interest in the dispute between the Bank and its shareholders but was opposed in principle to the way the amendments were being introduced. Allowing only 14 days for the submission of comments was “unsound corporate governance”, he said, as it was not enough time to consider the views of all stakeholders. A further month and a half was needed.

There had been a lack of consultation, a lack of negotiation and a lack of due process. The Bank either needed to be structured as a private entity which acted without government impediment or it should fully acknowledge its government role, Kocks said.

“The impression is left that the amendments would serve to improve the soundness of corporate governance. Upon analysis, the overall effect is, however, to limit or remove the rights of shareholders without negotiation and public debate.”

Nedlac CEO Herbert Mkhize said the Bank was a public policy institution with a unique role in the economic policy framework. Unlike private companies, it did not have a mandate to maximise the financial returns to private shareholders.

Source: Business Day