VBS: A missed opportunity to transform a lily-white sector

So much has been said about the decision of the Reserve Bank to place VBS under curatorship. To most South Africans VBS remains the bank that gave the object of our scorn, then president JG Zuma, a get-out-of-jail card when he needed it most. Before then, Nkandla was the albatross around his neck and VBS came to his rescue, much to our annoyance. It is understandable that the country would then look at VBS with a suspicious eye, as all citizens should have. JZ, was after all, no paragon of virtue.

But taking a closer look at the financial sector one has to agree with the chairperson of VBS, Tshifhiwa Matodzi, that the Reserve Bank has missed a golden opportunity to help nurture an important entrant into the banking sector of this country. Let’s face it, South Africa is struggling through the pains of transformation. There is no blueprint anywhere for what the country is trying to achieve. Without saying so, we have rejected what “the rest of Africa” has done: forcefully take away from those who owned assets before independence and appropriate it to those who did not. Africa has seen all sorts of upheavals and economic instability because new governments have tried to correct past injustices through means that existing markets do not react to positively.

VBS has been accused of taking “illegal” deposits from municipalities, which the Reserve bank says they were not supposed to do. But VBS has indicated that when this was raised with them they did not resist the Reserve Bank’s decrees to set things right. They even put a process in motion to transform from a mutual bank to a commercial bank. Yes, they had taken deposits from municipalities, but someone please point out to the rest of us uninitiated how you get funding to the tune of several billions to start a bank in South Africa?

To transform South Africa, normal rules will have to be put aside in certain instances. It is not normal to pass a motion in parliament to enable government to take away land without compensating the owner of the land – but we saw the motion passed a few weeks ago. Those wishing to stir up fear among citizens who own land and property have sent out electioneering messages that say government wants to take away private land and property. But rational citizens know that’s not true. The idea is to ensure that land transformation happens without hindrances.

Must we wait a couple more years for the EFF to pass a motion to expropriate banks without compensation and create panic in the financial markets? What is the material damage that would have been done had VBS been allowed to transform into a commercial bank? Surely the markets were not averse to the existence of VBS because we would have heard of the rand taking a dip because VBS granted Jacob Zuma a loan. The truth of the matter is that in making that loan to a man we loved to hate we have all fallen into the trap of classifying everything as either pro-Zuma or anti-Zuma.

Zuma’s nemesis, the EFF, has come out in defence of VBS. They have correctly said we cannot stand by and watch an institution fail when it represented a real chance of allowing a black-owned bank from becoming a part of the banking sector. The argument that they acted illegally is neither here nor there – the Reserve Bank could have helped them transform into an entity that could have persuaded black people in this country that they too are allowed to play in the sectors that matter in this country. We can choose to act like purists by sticking to the letter of the law on everything that requires transformation in this country or we can wait for the anger that will surely build up over the years over sectors that remain the sole treasures of one race.

VBS will always remain a missed opportunity to truly transform a tricky sector. Having a Sim Tshabalala running the Standard Bank group will never convince black people that they are playing a meaningful role in the financial sector. Tshifhiwa Matodzi and his board are somewhat justified in feeling that the fruits of this democracy remain a benefit for the chosen few.

Sydney Majoko.