JOHANNESBURG, March 30 – The South African Reserve Bank (SARB) has been described as “misleading” the reports that its deputy governor and registrar of banks, Kuben Naidoo, defended the dominance of South Africa’s biggest banks on the market.
This comes after media reports quoted Naidoo as having “defended the lack of transformation in the banking sector” when the bank made a submission to Parliament’s standing committee on finance last week during public hearings on transformation in the financial services sector.
Parliament’s standing committee on finance was also probing how the dominance of the biggest banks – Absa, Nedbank, FirstRand, Standard Bank, Capitec and Investec posed competition risks such as anti-competitive behaviour.
In a statement, the Reserve Bank said the reports were misleading.
“This is misleading. In fact, the deputy governor’s comments in Parliament were that the financial sector is highly concentrated, which has both positive and negative effects,” Sarb said in a statement.
“While a highly concentrated financial sector offers more stability, it also has its disadvantages. The SARB manages this conflict between stability and market concentration through effective and robust regulation of this sector, and relies on the relevant oversight of competition authorities.”
The Reserve Bank said it did not condone collusive behaviour of any sort, and did not bow to any pressure, whether it is political or from the private sector, in pursuing its mandate.
The bank reiterated that it was not driven by a profit motive and functioned in the broader interests of the country.
“In regulating the banking sector, the SARB has many objectives which include: financial stability, financial inclusion, competition and transformation. In 2016 the SARB issued three new provisional banking licenses to Post Bank, Discovery and TYME,” said the Reserve Bank.
“Regarding the SARB shareholding structure, we would like to clarify that Sarb shareholders have no say on any policy decisions that the executive management of the Sarb takes in implementing the Sarb’s constitutional mandate.”
The Reserve Bank is scheduled to announce the decision of the Monetary Policy Committee whether the repo rate, the interest rate at which it lends money to commercial banks, on Thursday afternoon.
The benchmark repo rate was left unchanged at seven percent in January for a fifth time in a row as food price inflation was expected to decline following good rainfall in parts of the country.
– African News Agency (ANA)