President Cyril Ramaphosa has assured Parliament that the Postbank will not become another VBS Mutual Bank once it is granted a license to operate as a full state-owned bank.
The president was answering questions in the National Assembly on Tuesday about the need to fund the Postbank and establish a government-owned financial institution. He stated that the Postbank must still meet stringent compliance requirements and receive approval from the South African Reserve Bank’s Prudential Authority before it can function as a commercial bank.
Ramaphosa explained that the regulatory environment for commercial banks is governed by multiple laws designed to ensure compliance and prevent failures. He contrasted this with VBS, which was not a registered commercial bank before its collapse due to looting.
The president emphasized that the government is taking steps to prevent a repeat of the VBS scandal. He noted that the Postbank still requires capital and must clear several regulatory hurdles, which are in place to ensure the bank is operated correctly and sustainably.