Legislative proposal to allow SOEs to establish a bank
The draft Financial Matters Amendment Bill may amend the Banks Act to allow financially sound state-owned entities to establish a bank
Amendments have been proposed by the Treasury to the Banks Act to allow financially sound state-owned companies to apply for a banking licence. The Treasury’s director of legislation Ailwei Mulaudzi briefed parliament’s standing committee on finance on Tuesday on the draft Financial Matters Amendment Bill, which contains the proposal. While the EFF has proposed an amendment to the Banks Act to allow for the establishment of a state-owned bank, the ANC has also adopted a resolution supporting the establishment of a state-owned bank. Mulaudzi noted in his presentation that under the Companies Act, state-owned entities (SOEs) are not classified as public companies, whereas the Banks Act only allows public companies to establish a bank. This prevented SOEs from establishing a bank, even when they meet the prudential and other requirements of the act. Mulaudzi explained that the bill would only allow qualifying SOEs that were financially sound to apply for authorisation to establish a ba...
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