Stringent controls in Postbank bill

Parliament’s communications committee has introduced stringent controls into the Postbank Amendment Bill to ensure the government’s first venture into individual retail banking does not suffer the corporate governance lapses that have characterised several other state-owned entities.

Committee chairman Ismail Vadi said the committee is aware of the potential for disaster within the bank if things go wrong.

The committee has finalised its deliberations on the bill, which proposes to establish the Postbank as a wholly owned subsidiary of the South African Post Office, with powers to raise funds for its new lending activities.


As it will be a financial institution over which the Treasury normally exercises control, the committee has introduced amendments to ensure Communications Minister Siphiwe Nyanda consults Finance Minister Pravin Gordhan on key issues.

The Cabinet will have to determine the broad borrowing, lending and investing policy framework within which all of the bank’s decisions will have to be made. The policy framework will also have to be tabled in Parliament.

Mr Vadi said the objectives of the bank, as outlined in the bill, have been amended so that it is not just an ordinary commercial bank but one directed towards the poor and low-income earners.

The amendments also strengthen the conflict of interest provisions in a way which prohibits the appointment of board members with conflicts of interest until they have divested themselves of these interests . The committee found the mere declaration of conflicts of interest to be an insufficient precaution. The personal liability of board members has also been tightened .

Congress of the People MP Juli Killian said that Postbank cannot be managed as another entity falling under the Department of Communications. “The money of investors has to be made secure by closing any loopholes allowing fraud and corruption,” she said.

Source: Business Day