https://www.polity.org.za
Deepening Democracy through Access to Information
Home / News / South African News RSS ← Back
Close

Email this article

separate emails by commas, maximum limit of 4 addresses

Sponsored by

Close

Article Enquiry

Post Office to become fully-fledged bank – CEO

Close

Embed Video

2

Post Office to become fully-fledged bank – CEO

Post Office to become fully-fledged bank – CEO
Photo by Duane Daws

26th April 2017

By: African News Agency

SAVE THIS ARTICLE      EMAIL THIS ARTICLE

Font size: -+

Plans are under way to remodel the South African Post Office (SAPO) into a fully-fledged bank, CE Mark Barnes said on Wednesday.

“Let me tell you about where you are and what the future is. We believe that the Post Office will prove to be a critical element in financial inclusion, for a number of reasons. You would be well aware that we are well advanced towards getting a fully-fledged banking licence,” Barnes addressed the National Press Club in Pretoria.

Advertisement

“The Post Bank operates as a bank under an exception which is that we are allowed to take deposits, which is usually the primary reason for getting a banking licence. We are moving from that to become a fully-fledged bank.

“The reason for that is we believe, as an organ of State, at an appropriate cost of capital and given an appropriate financial inclusive mandate, we can start at looking at financing what are traditionally known as unbankable or unsecured lending opportunities, as a start.”

Advertisement

Barnes said there are several ways government can capacitate the SAPO to become a commercially viable entity – for the the sake of general South Africans, especially the poor and those based in far-flung areas.

“The poorest people in South Africa pay the highest unit costs of consumption. We believe that as an organ of State, the Post Office can play a role in bridging that financial services offering, because we have a socio-economic mandate,” said Barnes.

“That is not to say we do not want to be commercially viable. There are a lot of ways that the that the State can use the Post Office to become a commercially viable entity.

“I don’t believe that privatisation is the panacea for a transforming economy. In fact, quite the contrary. I believe that privatisation in areas like healthcare, education, personal security and all these things have, if anything, contributed towards a divided society.

“I think the biggest challenge in South Africa is to address inequality, across all metrics. I think that’s a role we can play in financial services.”

He said SAPO already has the infrastructure to operate. Barnes said SAPO is best position to distribute to social grants to millions of South Africans who rely on the payouts monthly.

“That is a government service, not a private sector feast. That is an obligation that government has to service its people. The drivers of that business should be cost effectiveness and certainty of delivery. That’s it. Not profitability,” said Barnes.

“It is up to Treasury to decide where to allocate the economics of such a thing. If the Treasury chooses the Post Office to do this [distribute the social grants], they could also tell us at what price they want us to do it. We are not out there trying to make money, but to provide a service – at a competitive price.

“Whenever you got a situation where you are taking a government service and outsourcing it to the private sector, that is a flow of capital and income outside the fiscus.

“If it is at all possible to retain it inside the fiscus, it lowers the burden on the fiscus. To me this is self evident. Even where there are organisations that are not yet competitive, they must be capacitated to be competitive with the outside world. That is our point of departure.”

Barnes said currently, the Post Bank was doing very well.

“We have a very competent bank which is a fully-fledged member of the payment system. We have got 5-million, 7-million clients. We have excess capital, way more than you need even under the most stringent Reserve Bank requirements for capital adequacy. We have systems that all work,” said Barnes.

“We do something like 14-million transactions per month. We are a fully operational bank approved by MasterCard and Visa. We are part of the ATM system. Why aren’t we being used for the payment system relating to all forms of payment?”

He, however, conceded that there is currently a total breakdown of confidence in the services of SAPO.

“The Post Office brand and its capacity to deliver anything gets measured by its worst delivery point – which is the letter that you didn’t get that your friend sent you on Valentine’s Day, but you only got it in May. That doesn’t help the relationship.

“That basic operational stuff we are repairing. Unfortunately it takes time to attitudes and the understanding that we will not be given these big opportunities I have referred to unless we can demonstrate our capacity to get the basics right,” said Barnes.

EMAIL THIS ARTICLE      SAVE THIS ARTICLE

To subscribe email subscriptions@creamermedia.co.za or click here
To advertise email advertising@creamermedia.co.za or click here

Comment Guidelines

About

Polity.org.za is a product of Creamer Media.
www.creamermedia.co.za

Other Creamer Media Products include:
Engineering News
Mining Weekly
Research Channel Africa

Read more

Subscriptions

We offer a variety of subscriptions to our Magazine, Website, PDF Reports and our photo library.

Subscriptions are available via the Creamer Media Store.

View store

Advertise

Advertising on Polity.org.za is an effective way to build and consolidate a company's profile among clients and prospective clients. Email advertising@creamermedia.co.za

View options
Free daily email newsletter Register Now