The banks have had their time to do the right thing. Now, the nation must act to ensure that transformation is no longer a dream but a reality. The fight is on, and failure is not an option, writes Sipho Tshabalala.
Image: IOL
By Sipho Tshabalala
South Africa’s banking sector stands as one of the last strongholds of apartheid-era economic exclusion.
Despite nearly three decades of democracy, financial institutions remain a fortress designed to serve a privileged few while systematically shutting out black entrepreneurs and businesses.
The banking industry’s refusal to transform is not just an inconvenience; it is an outright betrayal of South Africa’s economic future.
Dr. Mkhacani Joseph Maswanganyi, Chairperson of the Standing Committee on Finance, did not mince his words when addressing the financial sector’s failure to transform.
"The status quo is unacceptable," he declared, making it clear that Parliament will no longer tolerate continued defiance.
His frustration is justified. The facts speak for themselves — black ownership in the financial sector is declining, black professionals hold fewer than 20% of executive roles in major banks, and critical enterprise and supplier development targets are ignored.
To make matters worse, financial institutions have failed to submit a transformation report for the 2017/18 fiscal year, a blatant violation of the BBBEE Act.
These failures are not accidental. They are the result of a deliberate strategy by banks to maintain the economic status quo.
"Banks, in their arrogance, have crafted lending models that deliberately exclude black businesses," Dr. Maswanganyi stated.
"Collateral-based lending mechanisms ensure that access to finance remains a privilege reserved for the historically advantaged, while emerging black entrepreneurs are denied the capital they need to compete."
The banks know exactly what they are doing. They are preserving their wealth, their networks, and their control by ensuring that transformation remains a distant illusion.
For years, Parliament has asked the banking sector a simple question: Why are you resisting transformation? And for years, banks have responded with excuses, tokenism, and corporate jargon designed to pacify rather than address the real issue.
Financial inclusion remains a farce when black-owned businesses cannot access funding, cannot scale, and cannot compete on a level playing field.
Dr. Maswanganyi is not alone in his outrage. The BBBEE Commission, National Treasury, and other oversight bodies have repeatedly exposed the industry’s deep-seated resistance to transformation.
Yet, nothing changes. The Banking Association of South Africa (BASA) and its members continue to treat transformation as an optional exercise rather than a legal and moral obligation.
"How do banks justify their perpetual resistance to transformation?" Dr. Maswanganyi asked.
"Why, despite existing legislative frameworks, do they refuse to comply with financial sector transformation targets?"
These are not rhetorical questions. They are demands for accountability in a sector that has gotten away with exclusionary practices for far too long.
Parliament must act decisively. The National Treasury and the Department of Trade, Industry, and Competition must stop issuing warnings and start enforcing compliance.
The South African Reserve Bank and the Financial Sector Conduct Authority must explain how their regulatory policies align with national transformation goals. If they cannot, then they too must be held accountable.
This is not just about policy — it is about justice. It is about economic redress. And it is about ensuring that the next generation of black entrepreneurs are not strangled by a system built to exclude them.
Banks that refuse to transform should face real consequences. Severe regulatory penalties, licensing repercussions, and the revocation of banking privileges must all be on the table. The financial sector must understand that transformation is not up for negotiation.
South Africa’s future depends on an inclusive economy. A banking sector that continues to shut out the majority is not just unethical; it is unsustainable.
If banks refuse to change voluntarily, then Parliament must make sure they are forced to do so. Transformation is not an option — it is a necessity. The era of empty corporate promises is over.
"The continued exclusion of black entrepreneurs and businesses is an indictment of the banking industry’s priorities and a betrayal of South Africa’s economic future," Dr. Maswanganyi declared.
"The people of South Africa deserve a financial system that serves all, not just a privileged few."
The banks have had their time to do the right thing. Now, the nation must act to ensure that transformation is no longer a dream but a reality. The fight is on, and failure is not an option.
* Sipho Tshabalala is an independent writer, analyst and commentator.
** The views expressed do not necessarily reflect the views of IOL or Independent Media.
Related Topics: