The government is pushing ahead with plans to launch a new state bank

The Treasury says it will move forward with plans to introduce a new state-owned bank in South Africa.

Treasury Secretary Dondo Mogajane, who submitted to Congress on Tuesday (May 4), said the new bank is part of the structural reforms announced by President Cyril Ramaphosa as the country focuses on post-covid recovery. Said to form.

It is expected to help provide financial assistance to the most deprived South Africans. However, committee members accused the Treasury of stalling the issue and promised that ANC would introduce a new state-owned bank for over a decade.

Mogajane said much of the new bank’s technical work had been completed and a memorandum of understanding had been prepared for the cabinet outlining some possible forms that the bank could take.

He said some proposals included the dissolution of the current postbank and the establishment of a new state bank, or the creation of a completely new state-backed financial institution from scratch.

In another proposal, you can see some of the countries’ development finance institutions (DFIs): Itara, Dissolved in a single entity.

President Cyril Ramaphosa and Finance Minister Tito Muboweni have expressed their support for state-owned banks in recent months as a way to provide loans, especially to poor South Africans.

At a roundtable in February, Ramaphosa said the country’s banking sector is controlled by just a few banks and South Africans need more options for access to loans.

“I fully support the establishment of state banks at the organizational and state levels. There is space for state banks. Land Bank is a state bank. IDC (Industrial Development Corporation) is available as needed. It is a state-owned bank. Many developing countries have many state banks. “

“With such an entity, even the 200 billion rants we asked banks to manage could be directed to it, and the truth is, our banking sector is risk averse.

“They are operating in the middle sector and are currently taking risks with exponentially high debt levels. I think we need a state bank. We want them to operate according to the highest governance principles. I insist. “

Treasury Minister Tito Mboweni also expressed support for the introduction of such banks.

In a series of posts posted on social media, the Minister of Finance said, “The cry to state-owned banks is loud, clear and urgent.”

“State-owned banks can disrupt our financial system. I support its establishment. Finance capital is the basis of our economic transformation. The discussion about it is No, “he said.

read: South Africa’s new debit ordering system goes into full force in May

The government is pushing ahead with plans to launch a new state bank

Source link The government is pushing ahead with plans to launch a new state bank

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