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SUPPORTED: Standard Bank group deputy chief executive Sim Tshabalala Photo: Russell Roberts

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Standard Bank group deputy chief executive Sim Tshabalala proposed that public-private partnerships should be formed in which commercial banks would use Post Bank's 1,600 branches to distribute their products and services.

Tshabalala's view, which he aired at the Banking Association SA Indaba on financial inclusion last week, was backed by the banking association chief executive Cas Coovadia.

But the chief financial officer of Post Bank, Nichola Dewar, shot down the idea.

"If we use Post Bank infrastructure to distribute the services and products of commercial banks it would result in the entity going out of business because it would be expensive to do this," Dewar said.

She said the proposed partnership was a defensive strategy being adopted by the commercial banks, threatened by the looming entry of Post Bank into the commercial space.

Tshabalala, also the banking association's chairman, said the commercial banks' lack of infrastructure in rural areas - where 54% are unbanked - was a major challenge to financial inclusion, and commercial banks would need to raise fees if they were to roll-out the infrastructure.

"As Post Bank already has branches and staff across the country it would make financial inclusion of the unbanked cheaper," Tshabalala said.

He said evidence gathered by the World Bank - in its comprehensive 2007 study of 80 countries titled "Finance, Inequality and the Poor" - shows that state-dominated banking systems produce lower levels of financial inclusion than banking sectors that contain well-regulated, vigorously competing private sector banks.

Coovadia said he was baffled by Dewar's reaction.

"I am bit surprised by Dewar's response. I thought she would say 'we will think about Tshabalala's proposal while Post Bank does other things'," he said.

He said the state was not supposed to compete with the commercial banking sector and Post Bank should not be assessed on profitability.

"The State should focus on making the financial sector leverage on the Post Bank infrastructure, built with taxpayers money, to get people banked," he said.

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Sat May 25 10:53:35 SAST 2013 ::

Sep 25, 2012

MorenaWaPolelo

What is a group deputy chief executive Sim Tshabalala?? Is it an excuse not to have a black CEO?? Anyway Post Office banking I support you move you must not allow a bank advised by Saki or any other bank to talk about the bile of PPP to confuse you!!!MOOOR a head with your strategy iit is only now that these bank want to go rural because you have set up infrastructure!!!
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Sep 25, 2012

9janavy

Big ups to post bank,you were the first bank to allow non South Africans to open bank accounts hassle free.Hurry up and start trading as commercial bank and offer a wide range of banking options.Also offer lower banking fees and upgrade your ATMs.We all want to move all out out liquid assets from all these other sharks who call themselves banks and rip us off with ridiculous charges.Also offer paperless international transfers as that will give us less hassle when transferring payments in and out of the country for business or personal use. :)
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Sep 27, 2012

manyatshe

the formal banking sector should have engaged Post Bank behind the scenes before public pronouncement.
Post Bank is well advised to scrutinize the offers from the big four, they should not allow unprofitable services dumped on them whilst they take the cream off the top!
Post Bank has the potential to be a good competitor with the banks by joining hands with the shareholder - the big banks fear the moment the post office and government get their act together. the advice from them must be taken with a pinch of salt by any executive in the post bank.

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