Kuben Naidoo. Picture: BLOOMBERG
Kuben Naidoo. Picture: BLOOMBERG

SA would strive to allow competition into its banking system in a way that would not threaten the stability of the industry as more and more entrants sought to rival the country’s biggest lenders, said Kuben Naidoo, CEO of the Prudential Authority.

While many new banking licences were expected to be granted, these would be done within "reason" and in a way that did not allow too much of a disruption that would put the system at risk or render it fragile, Naidoo said at a Banking Association of SA summit in Johannesburg on Monday.

While he hoped the industry would become innovative, "safety and soundness is important". More "nontraditional" banks were trying to enter the segment, such as mobile phone operators, which did not need to hold capital.

While banks wanted a level playing field, there were technological developments that could provide better services to customers, said Naidoo, a deputy governor of the Reserve Bank.

The Bank was likely to make changes to regulations on SA’s payments system, which balanced a stable financial industry against the evolving needs of consumers, he said.