South Africa

SA must create a state bank to protect the people says Mauritian minister

Durban — Mauritian finance, economic planning and development minister, Dr Renganaden Padayachy, says South Africa needs to establish a state bank so that it can provide poor people with access to finance at a lower rate, and protect citizens from abuse by private banks.

Padayachy was speaking during his visit to this country last week, where he met various stakeholders, including 250 business people at Durban’s Radisson Blu hotel.

The Mauritian minister who is also the current chair of the Trade Development Bank, said the promotion of access to banking was one of the effective ways to fight inequality.

“It is important to have a state bank to ensure that private capital does not abuse its unlimited power and abuse those who need access to banking services. What we want as African countries is a certainty that no one will influence us on policy direction. We need to protect the interests of the people and not abuse them.

“If we don’t protect our people from the potential abuses from private institutions then we will not be doing our jobs as leaders of the continent. We have heard stories about banks in South Africa closing banking facilities of black-owned businesses, and we think it is wrong. My advice is that the country ensure that there is always an alternative,” said Padayachy.

He encouraged African countries to work together to advance African businesses and protect those whose businesses were being suppressed through the closure of bank accounts.

“Part of the reason for my visit is to encourage South Africans to look at Mauritius as their home and know that we are one. We should never be divided in developing and empowering our people. Small businesses must come and explore opportunities because we are open for business. Before we can look elsewhere, we must start here at home and invite our own to enhance this continent’s economy,” he said.

Earlier this month, South African banks were slammed by the Competition Tribunal for closing the accounts of the Sekunjalo Group. This after 36 applicants linked to Sekunjalo sought interim relief to have their banking facilities restored, and prevent their other accounts from being closed. Access Bank, Nedbank, Investec Bank, Sasfin Bank, Absa Bank, First National Bank, Mercantile Bank, and Bidvest were the respondents in the matter.

The banks based their justification for the closure of the accounts on “reputational risk” derived from media publications which happen to be competitors of the group through Independent Media, one of the biggest black-owned media entities in the country.

In its ruling prohibiting the banks from closing Sekunjalo’s accounts, the Tribunal said the banks had failed to prove the veracity of the offences allegedly committed by Sekunjalo which resulted in the closure of their bank accounts based on perceived reputational risk.

As a result, the Tribunal granted interim relief to Sekunjalo last week preventing three major banks from closing bank accounts belonging to the Group. It also ordered the banks that had closed the accounts to reopen them.

The SA Federation of Trade Unions (Saftu), Injenje YabeNguni, the National Freedom Party (NFP) and the African People’s Convention (APC), welcomed the Competition Tribunal’s ruling, and called on the government to protect black businesses. The tribunal’s interim relief will last for six months pending the conclusion of an investigation by the Competition Commission into a complaint regarding restrictive practices filed by the Sekunjalo Group against the banks.

Daily News

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