South African Postbank Limited Bill [B14B-2009]: deliberations

NCOP Public Enterprises and Communication

12 October 2010
Chairperson: Ms M Themba (ANC, Mpumalanga)
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Meeting Summary

The Committee conducted the final deliberations on the South African Postbank Limited Bill [B14-2009].  The Director: Legal Services and the Director: Postal Policy, ICT Development of the Department of Communications responded to questions from the Members.

The Members asked if the concerns and recommendations of the Eastern Cape Youth Development Board had been addressed in the Bill.  The Department advised that most of the concerns related to service delivery issues, which was not directly related to the contents of the Bill.  The Committee queried the reference to the Companies Act of 1973 and was informed that the new Companies Act had not yet commenced, hence the reference to the 1973 Act that was still applicable.  Members asked for clarity on the ownership of assets and interests by the members of the Postbank Board and their family.

The Bill was approved by the Committee, with no amendments.

Meeting report

Deliberations on the South African Postbank Limited Bill
The Chairperson welcomed the attendees and acknowledged the previous presentation and interaction with the Department of Communications (DOC).  She advised that the Committee would hold the final deliberations on the South African Postbank Limited Bill.

Mr Willie Vukela, Director: Postal Policy, ICT Development, DOC, invited questions from the Committee, to which he would respond.

The Chairperson asked Mr Vukela to refresh the Committee member's minds on the Eastern Cape Youth Development Board, in particular the issues concerning the long-term shortage of staff, insufficient security, the early closing time of the Postbank and the distances people had to travel to the Postbank.

Mr Alf Wiltz, Director: Legal Services, ICT Development, DOC, replied that the Department had seen the submission from the Eastern Cape Youth Development Board approximately six or seven months earlier.  He was unable to exactly recall each and every statement that had been made.  He did recall that most of the issues raised were not directly related to the content of the Bill and most problems actually revolved around service delivery issues.   The major focus of the Bill was to separate the Postbank from the South African Post Office. As a separate entity, the Postbank would have its own designated personnel and would be a fully fledged bank in its own right.  He expected that certain service delivery issues would remain by the time the new bank was up and running.  Currently, nobody was really focusing on how good the service was at the Postbank. In effect, the Postbank provided a banking service and the Independent Communications Authority of South Africa (ICASA) played a very small watchdog role.  ICASA was mainly concerned with Information and Communications Technology (ICT) matters and focused on telecommunications and broadcasting matters rather than banking.  ICASA was not in a position to be concerned on how a banking client could get the best possible service.   As the Bill progressed, a new link was being established and an entirely new regulatory environment came into force.  The Postbank would be subject to regulation by the South African Reserve Bank (SARB), the National Treasury and the other role players in the banking industry.  The Postbank would suddenly find itself part of the banking fraternity and environment and would be subject to the same stringent requirements applicable to the rest of the banking sector.  He expected that the demand for service delivery on the Postbank would change.  As a dedicated bank, the staff would become more specialised and would receive training to allow them to operate in a banking environment, as opposed to the traditional Post Office environment.  He expected that the implementation of the Bill would address the concerns raised by the youth development group.

Mr Vukela noted that the crux of the submission made by the Board was the issues of access, quality, security and infrastructure.  The Congress of South African Trade Unions (COSATU) had subsequently presented a vision that the Postbank hoped to achieve. The objective of the Bill embraced the submissions made by COSATU and the DOC had amended the Bill submitted to Parliament accordingly.  The Registrar of Banks was currently considering the issues of access, security and quality.  Government needed to develop regulations on how the Postbank would operate.  The DOC had joined forces with the South African Reserve Bank (SARB) and the National Treasury in that regard.  Concerning the issue of access, further judiciary requirements would be necessary.  The role of the DOC was mandated by the Ministers of Finance and Communications and the Department had to ensure that legislation was put in place that made provision for the future operation of the Postbank.  The Bill contained three critical provisions concerning policy making, namely how the Postbank would borrow money, how the bank would invest money and how the bank would lend money.   The Department continued to be engaged with the National Treasury, the SARB and the Post Office on the matter of service delivery.  This aspect was essential to ensure that the Postbank would be able to provide a good service to consumers as soon as the Bill was passed.

The Chairperson asked for clarity on the provisions concerning the Companies Act.  The Bill referred to the Companies Act of 1973 and it was not clear how subsequent amendments to the Act were dealt with.

Mr Wiltz explained that the new Companies Act had been promulgated but had not yet commenced.  Therefore the reference to the Companies Act of 1973 was correct as that Act was still in force.  The issue had been extensively discussed with the Office of the State Law Adviser.  The Department of Trade and Industry (DTI) had advised that the new Act would commence during the first quarter of 2010, but that had not yet transpired.  If the new Companies Act commenced prior to the commencement of the Postbank Bill, there would be a problem.  In any event, provision was made for a period of transition in any legislation and the Companies Act did include transitional provisions.  There was no risk in referring to the existing Act and the Bill could not contain a reference to legislation that had not yet commenced.
 
The Chairperson sought clarity on the functions of the Board of the Postbank.

Mr O De Beer (COPE, Western Cape) asked for clarity on the interests and assets controlled by members of the Board.

Mr Wiltz explained that Board members controlled the assets owned by them, regardless of whether or not the members conducted business with the company.  He pointed out that the interest of family members of Board members had to be taken into account as well.  A definition of a family member had been included in the Bill for this reason.

Mr Vukela pointed out that the Board was responsible for providing guidance to the executive managing director (MD) of the Postbank.  The Board would assist the MD in achieving the mandate of the Postbank.

The Chairperson asked the State Law Advisor for comment.

Ms N Mnyikiso, State Law Adviser, had nothing further to add.

The Chairperson led the Committee in the clause-by-clause approval of the Bill.

The Committee unanimously agreed with all the clauses of the Bill, without amendments.  Mr O De Beer moved for the adoption of the Bill. His motion was seconded by Ms L Mabija (ANC, Limpopo Province).The Bill was formally approved by the Committee.

The meeting was adjourned.


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