South Africa, Business

Cabinet to seek judicial inquiry into banks’ moves against the Guptas

By BDlive 2 September 2016

The Cabinet has resolved to ask President Jacob Zuma to establish a judicial inquiry into the banks and their actions against the Guptas, as well as to review the legislation that governs the banking system, Mineral Resources Minister Mosebenzi Zwane says. By Carol Paton for BDLIVE.

First published by BDLive.

The announcement comes as investor confidence in SA is in free-fall, as a slew of decisions emerging from the Zuma administration creates growing uncertainty in the rules regulating the economy.

Zwane issued the statement on Thursday evening, following a marathon Cabinet meeting held on Wednesday.

Zuma was not at the meeting.

Among other decisions that were taken was one to replace the South African Airways (SAA) board, leaving Zuma’s close friend Dudu Myeni at the helm.

Zwane, who headed an interministerial committee established by the Cabinet after the big four banks withdrew banking services to the Gupta family, drew up the Cabinet memo on the banks, which he says in his statement has now been adopted by the Cabinet.

It proposes that the judicial commission of inquiry will consider:

  • the current mandates of the Banking Tribunal and the Banking Ombudsman as they had failed to protect the rights of the Guptas;
  • the current Financial Intelligence Centre Act and the Prevention of Combating of Corrupt Activities Act, and whether, in taking action against the Guptas, the Reserve Bank and the Treasury had complied with these and other pieces of legislation. The inquiry should consider recommending legal action against the Treasury and the Reserve Bank in this regard;
  • SA’s clearing bank provisions to allow for new banking licences to be issued. The committee said there was evidence that in SA banking was controlled by a handful of clearing banks, which meant other banks had to go through these banks to be part of the payment system. This implies changing the provisions and probably authority for licensing banks; and
  • the establishment of a State Bank of SA, with the possible corporatisation of the Post Bank being considered as an option.

Photo:  Mineral Resources Minister and then  Acting Minister of Communications Mosebenzi Zwane speaks at Ga-Seleka Village Community Hall during the Imbizo focus week launch in Lephalele, 4 April 2016. (Photo: GCIS)

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