File Ref : 36396
hearing on Co-operative Banks Bill
Submission
1.
The Banking Association South Africa thanks the Portfolio
Committee on Finance for inviting us to make a submission on this matter, and
we welcome the opportunity to support this Bill. We will talk to this
submission during the slot we have requested for an oral submission.
2.
We have made several submissions to National Treasury, responding
to various drafts of the Bill, before it being considered by the committee today.
3.
The Financial Sector Charter states, inter alia, that
“The regulatory environment and architecture of the sector
must promote the empowerment objectives of this charter, lower the barriers to
entry and facilitate competition”
“The financial sector’s support for the development of
second and third tier financial institutions may take, but shall not be limited
to taking, the form of measures set out in paragraphs 7.11 and 7.2” (These
paragraphs refer to skills transfer, staff secondments, infrastructure support,
technical and administrative support and referral of business.)
4.
The Banking Association South Africa is a signatory to the
Financial Sector Charter, and its members are committed to the intent and
deliverables agreed in the Charter.
5.
The Banking Association South Africa has thus supported the
development of the Co-operative Banks Bill and we commit ourselves to ongoing engagement
with National Treasury and your committee to refine the Bill, where necessary,
on its path to promulgation as an Act.
6.
We remain convinced that co-operative banks can play an important
role in delivering financial services to particular sectors of the broad
market. We believe these institutions, if appropriately governed and regulated,
can fulfil their role in partnership with registered banks.
7.
We have raised with National Treasury that potential co-operative
banks will have to be compliant, in internationally-accepted form, with FICA
regulations targeting money laundering and the financing of terrorism. This
aspect is not dealt with in the Bill. However, we have been assured the
intention is that co-operative banks will be FICA compliant, and that this will
be addressed through regulations or any necessary statutory amendment. We believe
it is critical for this matter to be addressed because FICA compliance will be
an important factor in promoting partnerships between co-operative banks and
banks registered under the Banks Act.
8.
In conclusion, we reiterate that this Bill is an important
step in the diversification of the financial sector and should make a
contribution to the broadening of access to financial services to markets that
don’t have access currently. Successful co-operative banks will also add value
to some sectors of the market that have access to some degree of services at
the moment.
9.
We support this Bill.