A whooly black-owned bank could be what is needed to jumpstart total economic transformation in South Africa.
At
the very least, such an initiative could go a long way in ending
banking apartheid that still characterises the fiancial services sector
of the country 22 years after freedom.
Well then, what is the hallabollu all about?
It has emerged that the
South African Reserve Bank (SARB) has made a recommendation to the
Treasury that Vardospan’s bid to create South Africa’s first 100%
black-owned bank. This was reported by Bloomberg News.
Vardospan(Pty)
Ltd is the acquisition vehicle that has been established for the
acquisition of Habib Bank SA. It is led by businessman Hamza Farooqui.
According
to Hamza Farooqui, "If Vardospan were to be successful in its bid to
acquire Habib Overseas Bank, it would be a significant first step in
ending the banking apartheid that plagues South Africa, almost a quarter
of century after liberation.
Financial research reveals that South Africa’s financial services sector is still dominated by its Big Four banks and entry to this sector is controlled by SARB.
The financial services sector desperately lacks competition which is why so many South Africans – most of them black - cannot source capital to be entrepreneurial and escape grinding poverty."
Farooqui further notes, My dream is that a black entrepreneur can walk into a black-owned bank, and borrow capital from a black bank manager at a normal interest rate. The fact that is still a dream in 2017 is a national tragedy. Money and trade are forces that don’t discriminate by colour.
On 24 January, this country’s biggest business newspaper (Business Day), wrote:
“The public is aggrieved over the tight hold the banks and other large corporations have over an economy it believes should be more transformed.”
Farooqui states, The newspaper is correct."
"There is absolutely no reason why Vardospan’s bid should be rejected other than the privileged financial elite manoeuvring to protect its monopoly hold on banking services.
We will never end the economic apartheid in this country without ending banking apartheid first.
"There is absolutely no reason why Vardospan’s bid should be rejected other than the privileged financial elite manoeuvring to protect its monopoly hold on banking services.
We will never end the economic apartheid in this country without ending banking apartheid first.
Vardospan
remains committed to the creation of a robust, black-owned challenger
bank. It is what our rainbow nation desperately needs,"concludes
Farooqui.
Meanwhile, it was reported earlier in January that the purchase was approved by the Competition Commission without any conditions .
However,
as the company is attempting to purchase a significant stake, the
purchase has to be approved by the country’s finance minister,"the
report added.
