SACP SLAMS BANKING COUNCIL ON LAND BANK BILL

16 May 2002

The South African Communist Party (SACP) condemns the Banking Council of South Africa for its submission on the Land and Agricultural Development

Bill which is currently under discussion by the Land and Agricultural Portfolio Committee in Parliament.

The SACP welcomes the thrust and intention of the Land and Agricultural Development Bill in provision of developmental financial in rural areas and co-operative development.

The Bill correctly provides a wide range of powers in which the Bank may invest. It makes provision for joint ventures and wholly owned subsidiaries. The Bill makes it possible for the Bank to cross-subsidise its developmental activities, which may not be profitable, through systematic linkages with commercial activities. The Bill also allows the Land Bank to take deposits and to be the preferential creditor in advance of all other creditors. These provisions, we believe, will ensure that people in rural areas and those who need access to land will have access to a comprehensive range of financial services. As the Strauss Commission on Rural Financial Services recommended in 1997, this range of services must include access to savings instruments, to housing and trade finance, to agriculturally related finance, as well as consumer credit so that rural people are able to attain a balance in their financial portfolios. The rural financial services system should emphasise the provision of savings facilities, money transmission services, appropriate credit mechanisms and the infrastructure required to support such services. Therefore, the Bill must address this Strauss Commission recommendation.

In its submission, the Banking Council seeks to limit the scope of the Land Bank and the special provisions in order to make the Land Bank to compete on an equal footing with the already dominant private commercial banks. For reason of their dominance, it is important that the Land Bank gets the protection proposed in the Bill. The private commercial banks will not do what the Land Bank will do. Instead, in pursuit of their profit-maximisation, they will perpetuate apartheid patterns of land ownership and use.

The SACP strongly rejects the Banking Council's Submission. The SACP also welcomes the emphasis of the Portfolio Committee on the need to protect and promote the Land Bank.

The submission of the Banking Council reflects its programme to undermine the transformation and diversification of the financial sector in South Africa. Contrary to its public statements, the Banking Council has effectively proved to be opposed to fundamental transformation of the financial sector. In the NEDLAC negotiations on the financial sector, the Banking Council has dragged its feet: little progress has been made and no substantial agreement has been reached on the major issues.

Finally, the SACP believes that the mandate of the Land Bank must relate to NEDLAC discussions on the transformation and diversification of the financial sector which seek to identify ways in which government owned financial institutions, like the DBSA, IDC, Khula, Land Bank and the Postbank can be made more effective in serving the developmental needs of the poor. This includes creating conditions for the more effective provision of financial services orientated to the developmental needs of working people and the poor.

CONTACT
Mazibuko Kanyiso Jara (surname Jara)
Department of Media, Information and Publicity
South African Communist Party
Tel - 011 339 3621
Fax - 011 339 4244
E-Mail- sacp1@wn.apc.org
Website www.sacp.org.za