House Chairperson, hon Ministers present here today, Members of Parliament, the need for the establishment of a Postbank that will cater for the needs of the majority of the people who are underbanked and unbanked has been identified as a central pillar in our efforts to integrate our people into the mainstream economy.
On World Post Day, Monday, 19 October 2009, the Minister of Communications, Gen Siphiwe Nyanda, stated that, I quote:
The Post Office has begun the process of corporatising the Postbank, with the chief objective of providing underserviced communities access to vital financial and related services and thereby contributing to economic and social development.
Indeed, the proposed legislation seeks to uplift the socioeconomic conditions of our people, in particular the rural poor who have been previously disadvantaged - a better life for all!
We have interrogated the merits of creating a South African Postbank Limited that will cater for the majority of the people whom the commercial banking sector classifies as a risk and unprofitable. We have given the adoption of this Bill the thumbs up.
Now that we are at the stage of registering the Postbank it is, of course, important to realise that the Postbank is envisaged to be an independent state entity under the oversight of Parliament, and that this is the final stage of an evolutionary process that was occasioned by the White Paper on Postal Policy of 1998. We therefore support the initiative to complete the process, since we have not found any contrary reason to deviate from the cause of creating an independent bank of the people.
However, it is our humble hope that the Postbank has developed full institutional capacity to be transformed into a fully fledged bank, able to provide all banking services, including the provision of credit, and that all proper management controls are in place to ensure that it does not collapse like the other small banks that have gone that route before. This is because the commercial banking sector, with which they will be competing, is highly competitive and this bank shall be made to operate within the parameters of the banking laws of the country.
As stated in the Bill, the newly corporatised SA Postbank Limited will use the staff of the Postbank. It is our humble hope that these staff members will be adequately trained for the administration of the added responsibility that comes with a new mandate.
In the area of providing financial services, there is no room for error. We therefore wish to pose a challenge to the two departments that are tasked to oversee the process of registering the bank, namely the Departments of Communications and Finance, to ensure that this matter is not left unattended. It is also important to note that in Eastern Europe some postbanks were established with good intentions, but collapsed owing to, among other things, premature privatisation strategies.
During the South African Postbank Bill hearings, Cosatu also expressed the view that corporatising the Postbank would pave the way for its privatisation. In this regard, a very crucial issue that emerged during the deliberations was the need to protect the currently marginalised groups from being excluded from exercising financial services once the SA Postbank becomes a fully fledged bank.
Subsequently, the committee included the following provisions in clause 2, which culminated in the objects of the Bill, with the aim of, among other things: "expanding the range of banking services and developing into a bank of first choice, in particular to the rural and lower income markets as well as communities that have little or no access to commercial banking services or facilities".
Sustainable financial service systems for the poor are crucial because they attract a large section of people who have been excluded from the banking system. Any institution that is able to develop ways of serving the poor at minimal risk has the potential for a profitable market. There are too many people out there who require the services of the banking sector but who otherwise do not qualify to hold bank accounts owing to their status as low- income earners. This is a market on its own.
The lack of access to banking services has disadvantaged many people, as some have to have their wages paid in cash over the counter, as opposed to direct credits into accounts. Even when they are paid through bank transfers, most of them are forced to withdraw all their earnings because of the distance between their areas of residence and the banks.
In conclusion, we support the route of using the option of the state actually rendering the service itself, rather than finding ways to incentivise the private sector to invest in rural areas.
A new era of hope for the poor has dawned and ushers in their active participation in financial markets. Our responsibility as hon members of this House is to be honourable enough to go out there, to inform, educate and popularise this newborn South African child.
There can be no justification to oppose such a progressive move that will benefit the rural masses of the population. The ANC supports this Bill. [Applause.]