Financial Services Ithala has announced that it is ready to be named the state bank of South Africa. The bank said it had been operating as a state bank for decades and all that was required was official recognition.
This comes after the National Treasury said it would move forward with its plans to introduce a new state bank.
On Tuesday, Treasury director-general Dondo Mogajane said the new bank would form part of structural reforms that were announced by President Cyril Ramaphosa.
The state bank is expected to help provide financial assistance to South Africans who are most in need.
Ithala SOC Limited chief executive Thulani Vilakazi said Ithala had been operating for decades as a state bank, it needed recognition.
“There is no need to invent the wheel, there was no need to look beyond Ithala to appoint a state bank that is ’tried and tested’ to serve the people,” he said.
He added that Ithala would empower historically disadvantaged communities and accelerate radical economic transformation.
“Ithala SOC Limited – a 100% owned subsidiary of Ithala Development Finance Corporation, KwaZulu-Natal’s provincial development agency – has received overwhelming government support to achieve state bank status.
“The Premier of KZN, Sihle Zikalala, has long championed for Ithala to become a state bank in keeping with the governing party’s drive for radical economic transformation,” he said.
According to Vilakazi, with a six-decade legacy of development, Ithala believes it is well-positioned to ensure better use of public funds towards priority areas, including job creation and economic development in financially distressed rural communities.
“As an organisation which puts people before profit, Ithala would operate differently to commercial banks which invest millions of the province’s taxpayer funds outside the province, as opposed to investing in sustainable development locally first.
“Against the backdrop of the triple challenges of poverty, inequality and unemployment, a state bank could earn additional revenue for the state that could help spur economic development and release vulnerable members of society from the debt trap that so many people find themselves in,” Vilakazi said.
Vilakazi said the establishment of a state-owned bank would transform the financial sector.
“For far too long, ordinary South Africans have been left out of the transformation agenda, with historically disadvantaged people, especially in rural areas, bearing the brunt of exclusion from financial services.
“The establishment of a state-owned bank with a developmental mandate will help end the economic apartheid that defines South Africa,” Vilakazi said.
Meanwhile, Finance minister Tito Mboweni has also expressed his support for the introduction of such a bank. On social media, the finance minister said that the ‘cry for a state bank is loud, clear, and urgent.
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