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Government warned banks could shut its accounts

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ANC leader cautions the government that stopping private ownership of the central bank could lead to commercial banks closing accounts

ANC national executive committee member and former Cabinet minister Ngoako Ramatlhodi has warned that implementing the resolution to nationalise SA Reserve Bank could lead to banks terminating their relationship with the government. Picture: Dimpho Maja / African News Agency (ANA)

A SENIOR ANC leader says the government should be careful of commercial banks as they could close their accounts should it implement the ANC resolution to stop private ownership of the SA Reserve Bank (SARB).

ANC national executive committee member and former Cabinet minister Ngoako Ramatlhodi believes the government’s bank accounts could be shut by invoking the principle of reputational risk should the state decide to implement the 2017 ANC national conference’s resolution to nationalise the SARB.

The ANC decided that there was a historical anomaly that there were private shareholders of the SARB and resolved that the central bank should be 100% owned by the government at the conference.

The governing party said the state should develop a proposal to ensure full public ownership in a manner that does not benefit private shareholder speculators.

In an article published in the governing party’s weekly newsletter, ANC Today, Ramatlhodi said the last ANC national conference passed a resolution that the SARB should be 100% owned by the state given the strategic role that it plays in the economy but indicated that this is one of the most important resolutions which remain unimplemented and that it cries out for implementation.

The former minister of mineral resources also called for the development of an alternative banking system by investing money of the fiscus in an alternative bank combined with others, like the Land Bank along with the implementation of the resolution on the SARB.

“This would open competition in the market and, most importantly, protect the state against possible collusion of the established banks, as and when they do not like what the state is doing at any given time,” he said.

According to Ramatlhodi, recent behaviour by established banks points to the possibility of these banks shutting down government accounts should they so decide.

“They could invoke the principle of reputational risk as the government decides to nationalise the SARB or implement affirmative action, for instance,” he wrote.

Sekunjalo Investment Holdings and its associated companies have accused Nedbank, Standard Bank, First Rand, Absa, Mercantile Bank, Sasfin Bank, Investec Bank, Bidvest Bank and Access Bank of collusive practices for terminating their banking relationship with them.

The Saturday Star

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