The MK party insists banking laws must be amended to prevent the "weaponisation of reputational risk" by banks in South Africa.
Image: File
The uMkhonto weSizwe party led by former president Jacob Zuma wants banking laws in South Africa have to be amended, in line with the recommendation of the Zondo Commission.
Earlier this week, News24 reported that Finance Minister Enoch Godongwana is not convinced changes to South Africa's banking laws are needed to prevent the "weaponisation of reputational risk" – the defence often given by banking institutions in taking action, including closing of bank accounts.
According to the report, Godongwana expressed his sentiments in response to a question from MK party Member of Parliament and veteran politician Des van Rooyen.
On Saturday, IOL spoke to MK party spokesperson, Nhlamulo Ndhlela, who insisted that the purported risk has been weaponised against individuals including Zuma.
“We are saying the Prudential Authority must be independent of the South African Reserve Bank, so that the banks do not have the power to just close your bank account, without the Prudential Authority independently looking into that.
“You are giving the banks too much power. We need to talk about economic inclusion. The banks can use, like they have done to president Zuma, their power of a banking platform to close your bank account, so that you do not participate economically. That is economic exclusion,” Ndlela told IOL.
“The banks actually weaponise the economic platforms.”
uMkhonto weSizwe party leader Jacob Zuma.
Image: Timothy Bernard Independent Newspapers
In March last year, IOL reported that the uMkhonto weSizwe party had hit back at FNB after the bank closed the accounts of Zuma. FNB earlier said the decision to close his accounts was based on an order of the High Court in KwaZulu-Natal.
On Saturday, Ndlela said Godongwana is surprisingly turning a blind eye to the reality of people being economically excluded unfairly by the banks.
“For the minister of finance to see that as okay, when government is the issuer of licences to the banks … The banks exist because of government. Why is it that the banks can act outside of the prescripts of government framework? Why should banks have the power to close your bank account when government’s mandate is to ensure economic inclusion?
“Where does the minister get this thinking, unless he is being paid by the banks. Is he benefitting from the banks in such a way that he is comfortable to say such things, as a so-called revolutionary of the liberation movement? What does he mean it’s not necessary, for the banks to go and do whatever they want when they get licences from government.
Ndlela argued that apart from the Zuma case, many South Africans have had their bank accounts arbitrarily closed by the banks.
“Even when one has not been found guilty, the banks can close your accounts, saying you are a reputational risk to them. How does that work? It does not make sense.
Ndlela pointed to Godongwana’s 2011 resignation from the post of deputy minister of economic development, amid allegations that the then deputy minister his wife Thandiwe had been linked to a company that disappeared with R100 million from the SA Clothing and Textile Workers' Union pension fund.
“Where his bank accounts closed? He was implicated. Does he think that his bank accounts should have been closed? Is that what he is telling us now?” said Ndlela.
In June last year, IOL reported that the National Treasury said when it comes to banks closing bank accounts on the basis of reputational risk, it was up to individual banks to manage their individual risks.
The National Treasury made the remarks in response to questions put to it by Business Report (BR) as there has been a public outcry over the lack of standards and measurements applied to the metrics of reputational risk when closing bank accounts.
jonisayi.maromo@iol.co.za
IOL
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