South African Post Bank is still awaiting a full banking licence after nearly eight years

The South African Post Bank finds itself in a prolonged state of uncertainty as it has yet to submit a fresh application for a full banking licence, nearly eight years after its initial application was filed with the South African Reserve Bank (SARB). This delay poses serious questions about the institution's future and its ability to operate effectively within South Africa's dynamic banking landscape.

The pressing issue was brought to light during a recent parliamentary exchange, where DA MP Tsolofelo Bodlani sought clarity on the status of the Post Bank’s licence application. In a response that has sparked further discussion, Communications and Digital Technologies Minister Solly Malatsi confirmed that no new application has been made to SARB for the banking licence.

Malatsi said an application was last lodged with the central bank in June 2017.

“Due to the lapse of time, most of the information in the application is outdated,” he said.

However, Malatsi said the Post Bank has started a process to review the application file for the necessary updates to resubmit the banking licence application.

President Cyril Ramaphosa had told Parliament earlier this month that the immediate challenge was to strengthen the Post Bank’s governance to ensure compliance with prudential standards and to stabilise its own finances.

He also said Malatsi, as the representative shareholder and executive authority of the Post Bank, was tasked with ensuring that it received the necessary support to obtain the banking licence.

“I am sure and certain that these requirements should be met and will be met, and all that we need to focus on is the timeframe through which the bank itself will be able to meet all these requirements,” Ramaphosa said.

Malatsi explained that the banking licence application process was governed by the Banks Act and supporting regulations.

“There are various steps to be followed in obtaining the licence. Post Bank has managed to fulfil most of them, with the Section 16 (application of a banking licence) being the last step to be implemented.”

Malatsi stated that the Post Bank was granted a Section 13 authorisation, which is the permission to establish a bank subject to certain conditions to be met in July 2016.

The bank was given a year to meet the conditions and submitted its application to the South African Reserve Bank in June 2017.

The South African Postbank SOC Limited Company was incorporated and registered on April 19, 2017.

The bank was registered as the Postbank in March 2017, and the process to transfer its assets and liabilities to a new company was initiated in September 2018.

Malatsi said some of the key changes enacted in the Postbank Amendment Act proclaimed by Ramaphosa in February 2024, were the creation of a Postbank Bank Controlling Company (BCC) and the replacement of South African Post Office as the owner of the bank with the government being the main shareholder of the BCC.

“The department is in the process of registering the BCC,” he said.

Malatsi also said the Postbank board members were approved for appointment by Cabinet in February 2025.

The recently proclaimed Postbank Amendment Act requires that 50% of the board members of the BCC be the same board members as Postbank SOC.

He said the department issued an advert calling for the nomination of the Postbank BCC board members in the last quarter of the 2024/25 financial year.

“The department is in the process of shortlisting the applicants.”

Malatsi said the Postbank was permitted through the applicable regulatory requirements and the Banks Act, to take deposits from customers and to provide card products and related services as a designated participant within the National Payment System.

“In the event that the Postbank obtains a full banking licence, Postbank intends to expand on the range of services currently offered to increase the financial inclusion of the unbanked and under banked individuals.”

Ramaphosa told Parliament earlier this month that the Post Bank has not yet fully met the conditions for a banking licence, particularly around its card key management processes and the compliance with the prudential standards that are required.

mayibongwe.maqhina@inl.co.za