Finance committee gives go-ahead for state-owned banks nationally

On Thursday, parliament's finance committee approved an amendment to the Banks Act, which will allow state-owned entities to establish a bank but only at national level.

The amendment to the Banks Act to allow for state-owned banks is contained in the Financial Matters Amendment Bill proposed by the Treasury. It is necessary because at present, state-owned companies are not classified as public companies under the Companies Act, and the Banks Act only allows for public companies to establish a bank.

Shivambu was strongly critical of this decision and “instructed” the committee in a last minute letter to finance committee chair Yunus Carrim not to reject his bill but rather to roll it over to the next parliament. Shivambu had no right to “instruct” the committee, Carrim said, adding that there was nothing wrong with Shivambu submitting his bill to the next parliament as long as it was substantively different and raised new issues not covered by the bill adopted by the committee. There was no provision in parliamentary rules for a bill to be rolled over, Carrim explained.

The committee decided that the Treasury bill was substantially better than Shivambu’s bill because it was more comprehensive and had more qualifications and checks and balances restricting the circumstances under which a state-owned entity could apply for a banking licence. Treasury director-general Ismail Momoniat stressed that all banks, including state-owned banks, will have to comply with the banking legislation applicable to all banks and would have to apply for a banking licence.

Banks. Plural. Good luck with that, taxpayers 🙄

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