Tito Mboweni. Picture: THE HERALD
Tito Mboweni. Picture: THE HERALD

The government is forging ahead with plans to establish a state-owned bank.

Finance minister Tito Mboweni said  during the budget vote debate on the national treasury that his deputy, David Masondo, had been tasked with leading the drive to establish a state-owned bank.

"It's about addressing the discriminatory nature of established banks,"said Mboweni, as he concluded the debate. 

In 2017, parliament  shot down the EFF’s motion to nationalise commercial banks.

Other parties, including the ANC, suggested that such a move would not benefit the poor, but "it is the poor who will ultimately pay for it".

The country would not only gain control of the banks but would be burdened with their liabilities, which the taxpayer would have to pay for, the ANC argued at the time.

The EFF’s has argued that the financial services sector is one of the biggest sectors in the economy, contributing about 20% to GDP, yet it remains the least transformed.

The party said that there was not a single bank in SA with  meaningful black ownership,  and banks had done little to improve the socioeconomic status of the majority of the population. 

The EFF proposed that parliament legislate 51% state ownership of all banks. The rest, the party stated, would be owned by pension fund institutions, co-operatives and private individuals.

The party also suggested that the state should create a state-owned bank, which would be used, among other functions, to distribute social grants, pay all government employees and provide finance for business, housing and vehicles for ordinary South Africans.

phakathib@businesslive.co.za