The SA Post Office has moved a step closer to getting a banking licence with the announcement last week that the cabinet had resolved to amend the Banks Act to allow "qualifying state-owned companies to apply for banking licences, subject to executive approval".
A critical element of CEO Mark Barnes’s plan to save the loss-making Post Office entails that it be licensed as a fully fledged bank able not only to take deposits, as it does now, but also to lend.
Barnes, who took over the Post Office two-and-a-half years ago saying he would turn it around, wants to use its infrastructure to provide low-cost banking services as well as other government services. The Post Office has 1,503 branches and 696 agencies, four times as many as SA’s largest bank.
Deputy SA Reserve Bank governor Kuben Naidoo said that before the Post Office’s licence application can be considered, it is necessary to amend the law.
"We have a contradiction where the Banks Act says a bank must be a public company and the Companies Act says that a state-owned enterprise is explicitly not a public company. We decided it was better to amend the Banks Act. It doesn’t mean the Post Office’s licence to be a bank will be granted, just that it can apply and we will process it," Naidoo said on Friday.
Barnes said the amendment to the law is one of two hurdles to jump before the licence can be considered.
"The second issue is to reach final agreement with the SA Reserve Bank on the structure of the Post Bank controlling company," he said.
At issue is who the owner of the Post Bank will be: the Post Office, the Treasury, or a third company of which the minister of telecommunication & postal services is the shareholder.