By Lehlohonolo Lehana.
President Cyril Ramaphosa has proclaimed the commencement of the new South African Postbank Amendment Act – which will become active law on 19 February 2024.
Ramaphosa signed a law that will enable the government-owned Postbank to become a fully fledged state-owned commercial lender.
The legislation brings the ruling African National Congress a step closer to fulfilling an election-campaign pledge to use a state-owned bank to reduce inequality by increasing access to credit and banking services.
With the Postbank Amendment Act in effect, the group, now independent of the Post Office, can move forward as a state-owned entity, apply for a new banking licence from the South African Reserve Bank, and launch full banking operations.
The bank previously noted that when the new Act comes into law, it will start resubmitting and finalising its section 16 application to become a registered state-owned bank. It said it hopes to finalise the licensing for operations in the 2024/25 financial year.
Postbank’s primary objective will be to offer affordable financial services to communities not catered for by traditional retail banking, SMEs and the public sector.
Last year, Finance Minister Enoch Godongwana said, that unions asked him to replicate the Government Employees Medical Scheme (GEMS) in creating a housing bank.
“We need a similar arrangement with public sector employees to create a housing bank to create loans for them.”
The government housing bank will also provide loans to the gap market – people who earn too much to get RDP houses and too little to get mortgages from banks.
Godongwana added that a fully-fledged state bank via the South African Post Office is also under development.