The plan to create a new government-controlled bank in South Africa

The government is pressing ahead with its plan to establish Postbank as a newly registered state-controlled banking institution.

Following engagements with the Prudential Authority (PA), Postbank has been advised to submit a new application for authorisation under section 12 of the Banks Act.

This was revealed by the Minister of Communications and Digital Technologies, Solly Malatsi, in response to a parliamentary question from National Assembly Member Mzoleli Mrara.

Mrara had asked the Minister to disclose the current status of Postbank’s application for registration as a bank, the date the application was submitted, and any outstanding conditions.

He also asked the Minister what steps he had taken to capacitate and capitalise Postbank following an alleged termination of the Master Services Agreement (MSA) with SASSA.

Finally, he requested the total number of social grant beneficiaries holding Postbank accounts and the financial loss incurred by Postbank from the loss of the MSA.

The Minister said Postbank was currently undertaking the required prep work, including engagements with the PA and addressing the outstanding requirements.

He said the application had not yet been submitted, and said no definitive submission date could be provided at present.

“The principal outstanding requirements include the recapitalisation of Postbank and modernisation of its banking systems,” Malatsi said.

“They also include establishment of the Bank Controlling Company and its Board, and compliance with the applicable prudential and regulatory requirements.”

Malatsi also revealed that the MSA with SASSA remained in effect in accordance with the Constitutional Court’s directions.

He also said his Department had submitted a request to National Treasury for the recapitalisation of Postbank, which is currently under consideration.

“The process of establishing the Postbank Bank Controlling Company and appointing its Board is underway, subject to the necessary governance and approval processes,” Malatsi said.

“Postbank has a permanent CEO and a full complement of executive management, with the exception of the Chief Financial Officer position, for which the appointment process is underway.”

Malatsi revealed that as of September 2026, Postbank had facilitated social grant payments to approximately 1.9 million beneficiaries.

Years of delays

Plans to transform Postbank into a fully-fledged state-owned bank have existed since 2010, when the government passed the South African Postbank Limited Act.

The act sought to transfer ownership of Postbank from the South African Post Office (SAPO) into a standalone public entity directly under the South African government.

The Prudential Authority granted Postbank authorisation to establish a bank under the Banks Act in 2016, but legislative and regulatory changes since then have made this authorisation invalid today.

In March 2019, the Department of Telecommunications and Postal Services gazetted a notice transferring Postbank from SAPO to the newly incorporated South African Postbank Company.

This company was established in April 2017 specifically to serve as Postbank’s Bank Controlling Company, as part of its transition to becoming a traditionally registered retail bank.

The date of the transfer was set for 1 April 2019, seen as a crucial step in transforming Postbank into a standalone banking operation.

The Financial Matters Amendment Bill, then recently adopted by Parliament, had paved the way for the group to obtain a banking licence from the South African Reserve Bank.

Prior to this, Postbank had existed solely as a deposit-taking institution that offered only transactional savings accounts and was thus exempt from the provisions of the Banks Act.

In Postbank’s annual performance plan for 2023/24, it said it would aim to submit an application for a banking licence before the end of December 2023.

It was anticipated that this would be granted sometime during the 2024/25 financial year, allowing it to finally begin operating as a retail bank.

The bank, however, never submitted this application and is now required to submit a new application for authorisation to the PA.

Earlier this year, Postbank was registered as a licensed financial services provider by the Financial Sector Conduct Authority.