IN AN apparent climb-down, the Banking Association of SA (Basa) said yesterday it wanted to reopen negotiations with the government and industry players such as labour and community groups on how to keep some of the successful empowerment elements of the financial services charter.
The chairman of Basa and CE of , Tom Boardman, told Business Day yesterday that the association’s position that it would no longer engage with the community and labour members of the Financial Charter Council was “overstated”.
Boardman said he had a discussion with Finance Minister Pravin Gordhan on Friday, and looked forward to continuing discussions with all the parties.
“The way forward is that the banks are very happy to continue engaging,” he said.
Yesterday, the South African Communist Party (SACP) took umbrage at Basa MD Cas Coovadia, who made the announcement last week, saying that he did not have a mandate to make “this unilateral and clumsy announcement”.
Boardman said that while Coovadia’s comments were not “unauthorised”, the way they were reported had “overstated” the association’s position.
“It’s been a really long set of negotiations, and the banks feel frustrated in our efforts to keep the financial sector charter alive.
“We believe there are valuable pieces such as access for the underbanked and funding for affordable housing which (are) not contained in the (Department of Trade and Industry) equity codes,” he said.
After years of delays, Coovadia said last week that Basa was drawing a “line in the sand”, and the banks would this year be reporting according to the Department of Trade and Industry empowerment codes.
This meant that the industry now wanted to negotiate directly with the government on issues such as the introduction of some of the successes of the charter into the department’s sector codes.
The charter has provisions — such as funding for low-cost housing, empowerment in agriculture and small business development — that the department’s empowerment codes do not contain.
Results of the banking industry transformation performance showed the sector was mostly ahead of the charter’s targets.
In human resources, the number of black junior managers grew to 53,57% from a target of 40%.
With black middle and senior managers, growth was slower at 39,6% and 25,79%, but this was still ahead of the charter targets of 30% and 20% respectively.
Black skills development spending increased to R537m, while procurement from black companies increased to 55,29%, which exceeded the sector target of 50%.
About R7,9bn had been spent on transformational infrastructure.
This is infrastructure that serves to improve the lives of black people.
The SACP said Basa continued to claim that blockage in the Financial Charter Council centred on disagreement about whether direct black ownership of financial institutions should be pegged at 10% or at 15%.
Speaking to reporters at a media briefing after his party’s last central committee meeting of the year in Johannesburg yesterday, SACP general secretary Blade Nzimande said that Basa was trying to “wiggle” out of the process.
“This explains why Basa MD Cas Coovadia’s arrogant and unilateral attempt to choose whom to discuss with. The labour and community formations would not be provoked into walking out of the council, and we have every reason to believe that the government is equally committed to ensuring that the process continues, and Basa is not allowed to try and resist transformation by excluding labour and communities,” he said.
Boardman said the banks would have to find some “voluntary mechanism” to ensure transformation, but that such mechanisms were “never as good as a formalised agreement”.