Floyd Shivambu. Picture: MARTIN RHODES
Floyd Shivambu. Picture: MARTIN RHODES

EFF chief whip Floyd Shivambu plans to propose an amendment bill in Parliament to provide the legislative framework for the establishment of a state bank.

Notice of his intention was published in last week’s Government Gazette. It was accompanied by an explanatory summary of the bill, which states its purpose.

The proposed amendment is "to amend the Banks Act to make it possible for state-owned companies to register in terms of that act and to conduct the business of a bank".

The summary notes that the current requirements imposed by the Banks Act on those registering and conducting the business of a bank make it impossible for a state-owned company registered in terms of the Companies Act to conduct the business of a bank.

In terms of the Banks Act, only a public company registered as a bank under the act can operate as a bank. A public company is defined in the Companies Act as a for-profit company that is not a state-owned company, a private company or a personal liability company.

Shivambu said on Tuesday that the current legislation did not allow the Postbank to operate as a fully fledged bank providing the full range of financial services.

The EFF says that a state-owned bank could facilitate greater access to financial services to people who are unbanked and save the state millions in bank charges for its multitude of transactions.

DA MP Gwen Ngwenya, a member of the finance committee, said the party would oppose the EFF move. She said the proposal mirrored that of the ANC.

"With more South Africans dependent on social grants than there are in employment, the EFF’s bill will propose to have a population both indebted and dependent on the government," Ngwenya said.

She said there were already development finance institutions such as the Industrial Development Corporation, the Development Bank of Southern Africa and the Land Bank.