‘Hostile’ minister to blame as most of Postbank board quits, says chair | Business

'Hostile' minister to blame as most of Postbank board quits, says chair | Business

The directors cited ongoing “severe and hostile treatment” and “hostile and oppressive attitude” from the Minister of Communications and Digital Technologies Mondli Gungubele for their decision.

“We cannot, in good conscience, continue to be associated with an institution whose Board continues to be undermined and disrespected,” Wonci and two other board members said in a letter addressed to Gungubele.

“This decision to resign from the organisation for which we have worked so hard to ensure it delivers its mandate was not reached lightly. We understand and accept the implications of this decision,” it continued. 

Wonci confirmed that two other directors have sent separate letters to the Gungunbele to tender their resignations.

Wonci has been Postbank chairperson for less than a year. The term of the board was expected to end in 2025, with some members supposed to end their term in 2027.

The Postbank’s key role is to provide low-cost banking services to poor and rural communities. It provides the payment system for social grants for 6.3 million people, but this has been beset by technical challenges.  The board’s resignation comes as millions of South Africans have not received their social grants due to a system error at Postbank. Many pensioners and disability grant recipients still have not received their grants for more than a week.

READ | South Africans wait days for social grants due to system error 

The Postbank has a limited banking license that allows it to take deposits but not to provide loans. Government’s vision is for it to become a fully-fledged bank, in line with ANC’s vision for a state-owned bank.

But, the SA Reserve Bank turned down its application for a full license last year, saying it did not meet the regulatory requirements. The Auditor-General has also pointed out that Postbank’s weak internal controls meant that it was not ready.

Earlier this year, Parliament passed the Postbank Limited Amendment Act to separate the bank from the SA Post Office (SAPO), in a bid improve the Postbank’s financial position. SAPO is technically insolvent and is being restructured. 

With Carol Paton

Source: https://www.news24.com/fin24/companies/hostile-govt-to-blame-as-most-of-post-bank-board-quits-says-chair-20230914