Category Archives: Banking Assoc SA

Banking Association South Africa urges ANC to consider impact of policy decisions on banks

Cas Coovadia – Managing Director, Banking Association South Africa

With five days to go before what is likely to be a landmark 53rd national elective conference of the governing African National Congress (16 – 20 December 2012 in the city of Mangaung in South Africa’s Free State Province), ETHICORE client – the Banking Association South Africa has once more publicly pronounced itself on the implications of the possible policy resolutions adopted at the conference on the South African banking sector and the economy more broadly.

This follows the publication of the article entitled “Business gets serious about lobbying at Mangaung” which appeared in the December 6, 2012 edition of the Business Day newspaper, by writer and author Carol Paton who in it examined the lobbying phenomenon ahead of the conference. In it, the Banking Association South Africa is acknowledged as having trailblazed advocacy, lobbying and engagement with the ANC on its economic policy proposals. The article is also available here on the ETHICORE website: “Banking Association South Africa trail blazes lobbying for Mangaung”

In this follow-up piece by Business Day financial services correspondent Phakamisa Ndzamela, the Banking Association South Africa’s Managing Director, Mr. Cas Coovadia urges the ANC to serious consider the implications of the party’s policy resolutions on the banking and financial services sector and therefore the economy more broadly. In it, Mr. Coovadia calls on the ANC to consider the written submissions and proposals made by the Banking Association earlier this year to the ANC, on its economic policy proposals. This includes amongst others, the nationalisation of mines, expropriation of land without compensation and the role of the state in the economy. Critically, Mr. Coovadia calls on the ANC to adopt the National Development Plan under the custodianship of Minister in the Presidency for the National Planning Commission, Trevor Manuel, as the vision and blueprint for the country.

ETHICORE is proud to have assisted, supported and advised the Banking Association in its research, analysis and formulation of submissions to the ANC on the banking sector’s response to the ANC’s economic policy proposals.

Source article:

Click on the internet link or copy into your web browser: http://www.bdlive.co.za/business/financial/2012/12/11/banks-join-business-in-warning-on-mangaung

Click here for the PDF download:  Banks join business in warning on Mangaung_11Dec2012

Banking Association South Africa trail blazes lobbying for Mangaung

In just under fortnight, the governing African National Congress gathers in the city of Mangaung in South Africa’s Free State Province, for its 53rd elective conference. The conference will see the party adopt policy resolutions that will inform its manifesto for the 2014 general election and its present-day running of government until then. The party will also see the conference elect the next president of the party (currently being contested by the incumbent, ANC President Jacob Zuma) as well as the election of the party’s next national executive committee.

The outcomes of the conference is therefore a reliable indicator of who the party’s presidential candidate will be for the contesting the 2014 general elections and the election manifesto upon which the party and its presidential nominee will campaign.

In the build-up to the conference, not only has there been intense lobbying and robust internal contestation in contesting positions at the elective conference, the party has also become the target of advocacy and lobbying efforts by key interest groups. In particular, this has included the certain quarters and sections of the South African business sector against the backdrop of ensuring certainty and efficacy in future economic and development policy.

In this articled entitled “Business gets serious about lobbying at Mangaung” which appeared in the December 6, 2012 edition of the Business Day newspaper, writer and author Carol Paton examines this lobbying phenomenon.

Source article:

Click on the internet link or copy into your web browser: http://www.bdlive.co.za/opinion/2012/12/06/business-gets-serious-over-lobbying-at-mangaung

Click here for the PDF download:  “Business gets serious over lobbying at Mangaung” (Carol Paton in Business Day, 6 December 2012)

The article points to the first ever emergence of business lobbies to influence the policy considerations of the party ahead of its June 2012 policy conference and the December 2012 elective conference. It acknowledges the Banking Association South Africa as having trail blazed the phenomenon through its response paper to the ANC’s draft policy document on economic policy and development finance.

The Banking Association South Africa is a valued and long-standing ETHICORE client. As the mandate representative of the banking sector it is responsible for addressing industry issues through advocacy; lobbying; policy influence; guiding transformation in the banking sector; constructive and sustainable change in the sector; and engaging with critical stakeholders.

The broad role of The Banking Association is to “establish and maintain the best possible platform on which banks can do responsible, competitive and profitable banking“. A critical role of The Banking Association is to work with its members to enable this role within the context of the transformation challenges the country is addressing.

The SA banking industry is currently made up of 17 registered banks, 2 mutual banks, 12 local branches of foreign banks, and 41 foreign banks with approved local representative offices.

According the South African Banking Sector Overview, the World Economic Forum Competitive Survey 2012/13 are South African banks 2nd out 144 countries in terms of soundness and the country was rated 3rd in terms of financial sector development.

ETHICORE is proud to have assisted, supported and advised the Banking Association in its research, analysis and formulation of submissions to the ANC on the banking sector’s response to the ANC’s economic policy proposals.

Banking Association & National Treasury reach agreement on responsible lending

ETHICORE client, the Banking Association South Africa has together with its member retail banks reached a historic and landmark agreement with the National Treasury, to improve responsible lending and prevent households from being caught in a debt spiral.

The agreement comes against the backdrop of continued media coverage and reporting by the National Credit Regulator expressing concerns about the rate of unsecured credit being granted by banks and the level of indebtedness in the country. Whilst these do not present any financial stability at present as confirmed by the most recent September 2012 Financial Stability Review of the South African Reserve Bank, the Banking Association and National Treasury have agreed on the need to ensure that current lending trends do no create future prudential risks.

The agreement calls for several other measures to be taken, including a review of loan affordability assessments, appropriate relief measures for distressed borrowers, reviewing the use of debt orders and limiting the use of garnishee orders.

The agreement is the result of recent meetings between the Banking Association and National Treasury, including a meeting with the Minister of Finance on 27 August 2012.

Download the agreement here: Joint NT BASA Statement_Responsible Lending_02Nov2012

Financial Services Laws General Amendment Bill tabled in Parliament

The Financial Services Laws General Amendment Bill (Bill 29 of 2012), was tabled in Parliament on 25 September 2012.

Cabinet approval and public consultation
Cabinet approved the Bill for tabling in Parliament towards the end of February 2012. The Bill was released for public comment in March 2012 and the commentary period was extended to 2 May 2012. A range of financial services stakeholders, interested and affected parties were consulted by Government during information session held as part of the consultative process on the Bill. These include, the ETHICORE client The Banking Association South Africa, the Association of Savings and Investments South Africa, the South African Insurance Association, the Institute of Retirement Funds and the Congress of South African Trade Unions.

Objectives of the Bill
According to a statement released by the National Treasury on 27 September 2012 upon tabling of the Bill in Parliament, the Bill address the urgency of issues contained in eleven financial sector laws, including legislative gaps highlighted after the 2008 financial crisis and to align these laws with the new Companies Act (2008) and other legislation.

The Bill seeks to:

  • Close gaps identified by the Financial Sector Assessment Program conducted by the IMF and World Bank regarding South Africa’s adherence to international standards for financial regulation;
  • Align financial sector legislation with the new Companies Act, 2008;
  • Eliminate overlaps caused by the Consumer Protection Act, 2008; Companies Act, 2008; and Competition Commission Act, 2009; and
  • Make the Financial Services Board (“FSB”) the lead regulator where there is concurrent jurisdiction.

Changes to the original Bill
National Treasury has also pointed out in its statement that the Bill contains new amendments that were not present in the original version of the Bill. According to National Treasury, these changes are reflective comments received during the consultation process and the 33 written submissions received and include:

New amendments to the Financial Services Board (FSB) Act:-

  • Limitation of liability of the regulator if it exercises the powers conferred upon it in terms of statute provided those powers were exercised in good faith (‘bona fide’).
  • Empowers the Minister to prescribe a code of engagement, consultation and communication for the FSB.
  • Appropriately clarifies the interaction between financial and non-financial legislation.
  • Defers some of the emergency powers to legislation next year that will lay the basis for implementing the “Twin Peaks” regulatory reform.
  • Provides for exemptions and directives to be tabled by the FSB.
  • Ensures that information received by the FSB is treated confidentially.

New amendments to the Pension Funds Act:

  • Provides for whistle-blowing protection for board members, valuators, principal/deputy officers, and employees who disclose material information to the Registrar.
  • Requires a fund board member to attain skills and training as prescribed by the Registrar, within a certain period.
  • Extends personal liability to employers in respect of non-payment of pension contributions to a fund.
  • Provides protection for board members from joint and several liabilities if they act independently and honestly in exercising their fiduciary obligations.
  • Requires pension funds to notify the Registrar of their intention to submit an application to register prior to commencing the business of a pension fund.

Forthcoming Parliamentary
The Bill has now been referred to Parliament’s National Assembly Standing Committee on Finance as a proposed Section 75 Bill in terms of the Constitution. This meaning that it does not affect the Provinces, but must be referred to the National Council of Provinces. ETHICORE will publish further information on the forthcoming Parliamentary process on the Bill. Should you have any enquiries and/or regarding the content of this post or the forthcoming Parliamentary process, kindly do not hesitate to contact us.

Document downloads
The following documents on the Bill released by Parliament and the National Treasury are available for below:

Financial Services Laws General Amendment Bill (B29-2012)

National Treasury Explanatory Memo (27 Sept 2012) to Financial Services Laws General Amendment Bill

National Treasury Response to comments on Financial Services Laws General Amendment Bill (27 Sept 2012)

National Treasury statement (27 Sept 2012) on Financial Services Laws General Amendment Bill

Retained by Banking Association SA

We are pleased to announce that our consulting and strategic services have been retained by the Banking Association South Africa for a further period in 2011. This effectively ensures continuity of our mandate to provide the Banking Association with an exclusive and customised parliamentary and legislative consulting, research, monitoring, advocacy and facilitation service, under the auspices of our Governance and Regulatory Affairs Division and our its flagship Customised Parliamentary Service, for which exploratory work and a pilot project commenced in September 2010.

We would like to take this opportunity to express our sincere appreciation and gratitude to the leadership and management of the Banking Association South Africa for the confidence they have shown in our capabilities and expertise within this niche. We look forward to building an enduring and collaborative partnership with the Banking Association South Africa during the year ahead. www.banking.org.za

Sincerely and thanks,

Abdul Waheed Patel

Founder and Managing Director