The South African Post office is about finalising moves to make its financial services unit, Postbank, serve as banks by the middle of the year 2017.
A document handed out in parliament showed that the SA post office group has submitted an application to register its financial services unit, Postbank, as a bank by July 3.
The group started its move to obtain the banking licence last year with South African Reserve Bank (Sarb) approving its office’s first level application.
The reserve bank further noted that it would submit an application to register its financial services unit, Postbank which has 1.4 billion rand ($104 million) in excess capital, enough to meet regulatory minimum requirements for a bank
Subsequent steps in the process involve the approval of the board nominees for the new bank, followed by its registration as a company and the transfer of business from Sapo to the new company.
Officials expect the next and final level for the licence to be completed within 12 months.
Apparently, the awarding of the licence would mean that the Postbank will be offering more than just savings accounts as it will be able to offer banking cards and other services.
Minister of telecommunications Siyabonga Cwele who spoke on the bank licence matter last year, pointed out that the new bank would not compete with other commercial banks in South Africa but will instead focus on pushing government’s development programmes.
As a bank, the Postbank is expected to tap from post office retail outlets across the country, turning them into branches. The bank will also become a subsidiary of Sapo but with its own governing structure.
Postbank has served primarily as a deposit bank (savings bank), but legislation passed in 2010 allowed for the bank to offer transactional facilities. It has R1.4 billion rand in excess capital, which is enough to meet regulatory minimum requirements for a bank, Reuters reported.
Meanwhile, Sarbs kept its main repo rate unchanged at 7%, after saying it now expects the economy to grow at a slightly lower rate this year, while inflation will remain above target.
The SA economy is however expected to expand by 1.1% this year, down from a previous forecast of 1.2% growth. It said while the gross domestic product expansion is above the 0.4% estimated for 2016, it lags behind the annual population growth of 1.7% meaning that the average South African is getting poorer.
At the same time, consumer prices continue to rise at a faster-than-desired pace. The bank now expects inflation to remain above its 3% to 6% target range until the fourth quarter, rather than declining below 6% in the second quarter. For all of 2017, inflation is expected to be 6.2%, compared with a previous forecast of a 5.8% price increase. Inflation in 2016 averaged 6.4%.
The faster-than-expected pace of inflation is mostly due to higher international oil prices, which have driven up the price of fuel in South Africa, as well as persistently high food prices, the bank said.
Sarb Governor Lesetja Kganyago said that the longer-term outlook is more or less unchanged. In 2018, the bank still expects prices to rise by 5.5%.