Speech by Ishmail Vadi, Chairperson on the PC on Communications during the debate on the South Africa Postbank Limited Bill
14 September 2010
It is a privilege to speak in support of the South African Postbank Limited Bill. Once passed, the Bill will corporatize the Postbank into a fully-fledged public bank. It is envisaged that the Postbank will become the bank of first choice for lower income groups in society.
The local Post office in one`s town or village currently provides standard postal services; allows for a personal savings facility and sells stationery and newspapers. It also serves as a monthly pension/grant pay-point for the elderly and the disabled respectively. Once the new Postbank is registered and launched, it will not only act as a savings bank, but will lend and borrow money, particularly to the poor, to rural dwellers and to youth and students. In this sense, this Bill is one of the most important pro-poor measures introduced by the ANC government in the current term. The new Postbank will bring to reality the vision of the White Paper on Postal Policy. It will serve as a powerful support structure for rural-urban financial linkages, allowing for easier financial access to migrant workers and promoting economic growth in rural areas. It will strengthen the prospect for savings and generate investment capital among rural communities. In the short-term, the Postbank can become a critical poverty combating instrument in poor communities. In the foreseeable future, it has the potential to develop into a powerful state bank comparable to similar financial institutions in Germany and Japan.
The Postbank will be an autonomous company wholly-owned by the Post Office. It will be owned indirectly by government. It will be managed by an independent Board of Directors, composed of 10 persons, including the bank manager. The Board will be accountable to the Post Office, the Minister of Communications and to parliament. The public, together with the Post Office, will be invited to nominate suitable persons for Board membership. These will be screened by a nominations committee, which will make final recommendations to the Ministers of Communications and Finance. In the end, Board membership is dependent on nominees passing the fit and proper test set by the Registrar of Banks.
Structurally, and in terms of policy formulation, the bank is located midway between the Minister of Communications and the Minister of Finance. For this reason the Committee has ensured that all major policy and operational decisions enjoy the concurrent support of both Ministers. The Committee has also insisted that the responsible Ministers must develop appropriate investment, lending and borrowing policies for the bank. These policies must be approved by Cabinet and must be tabled before Parliament, so as to ensure that there is no repeat of the debacle that we had seen at the Land Bank. Furthermore, any decision of the Postbank that is inconsistent with the policy framework determined by government will be of no force or effect.
The Committee has also introduced stringent criteria for appointment to the Board of the Postbank. A person with any material conflict of interest will not be eligible to serve on the Board and his/her business enterprise will not be able to enter into any business transaction with the bank. The Committee has introduced provisions that criminalise a failure to declare a conflict of interests. The insertion of such onerous provisions is there to ensure that there is no possibility for any abuse by either the Board or any member of the Board.
Speaker, I would now like to address the Leader of the Opposition with your kind permission. Honourable Trollip, I am disappointed that the Democratic Alliance has decided to vote against this Bill. This Bill is complex, but it is not politically contentious. The process by which we reached this stage has taken long time. You will recall that the Bill was referred to the Committee in November last year. The Committee held public hearings on the Bill on the 23 March this year. In April, the Committee agreed to a sensible proposal from the Honourable Killian to include the National Treasury in all its deliberations. In total, the Committee spent 10 weeks examining the provisions of the Bill and on amending it.
In all this time, the DA had not once indicated that the Bill is undesirable or that it should be processed through the Finance Committee. If it had made that suggestion, the Committee would earlier on have made arrangements for conferring with the Finance Committee. So, it came as a total surprise to us last week when the DA expressed its intention to vote against the Bill. I do believe that this is a vote against the poor and downtrodden in our society.
It is my hope that the Postbank becomes as successful as the Grameen Bank in Bangladesh, which uses micro-loans without collateral to help eradicate poverty in developing countries. It has now opened a branch in the US called, Grameen America. It offers loans from $500 to $3000 to vendors who borrow money daily to rent carts to sell their wares or to a hair salon owner who needs cash to buy shampoo. One of the first persons to whom it disbursed a loan is Socorro Diaz, a borrower who sells women`s lingerie and jewellery. "I`m trying to change my life, bit by bit," she said.
Finally, this House must understand that poverty is a threat to social stability and peace. Micro-credit can contribute to the reduction of poverty in society. Unlike the kind of loans dished out by greedy and exploitative loan sharks, the Postbank can make an enormous contribution to reducing poverty, particularly in far-flung rural areas. It can turn economic helplessness into hope. It can transform the indignity of not being gainfully employed into dignified labour and productivity. It can help the poor to become rich in society. Therefore, I commend the Bill for adoption to the House.
I thank you!