South Africa getting a ‘new’ 151-year-old state-owned bank

Postbank has successfully registered as a licensed financial services provider (FSP) with the Financial Sector Conduct Authority (FSCA).

With this license, Postbank is now empowered to provide financial advice and intermediary services relating to financial products within a regulated framework.

Prior to this development, Postbank could only accept deposits, operating as a “savings bank” that could not provide transactional accounts, credit, or other banking services.

In a statement released on Tuesday, 17 March, the Deputy Minister of the Department of Communications and Digital Technologies (DCDT), Mondli Gungubele, welcomed this development.

He said the milestone reflects important progress in rebuilding Postbank into a sustainable, well-governed state-owned retail bank, set to serve the needs of the unbanked and partner with government financial services to citizens.

“The granting of this license is an important regulatory milestone for Postbank and a strong signal of the progress being made to stabilise and strengthen the institution,” he said. 

“It demonstrates that Postbank is meeting the regulatory standards required to operate responsibly within South Africa’s financial sector.”

To maintain its license, Postbank will need to meet stringent regulatory requirements covering governance, compliance, risk management, operational capability and consumer protection.

Obtaining its FSP license forms part of the bank’s five-year transformation strategy aimed at stabilising, building and differentiating Postbank.

The FSP license is specifically part of the “Build” pillar of Postbank’s transformation strategy, as it enables the bank to expand its financial services while operating in South Africa’s regulated financial services framework.

“For customers and social grant beneficiaries who rely on Postbank, the license provides additional assurance that services are delivered under a regulatory regime designed to protect consumers and ensure transparency and accountability,” the DCDT said.

Gungubele added that the milestone also supports Postbank’s longer-term vision of obtaining a full commercial banking license from the South African Reserve Bank through the Prudential Authority.

“This achievement represents another important step in Postbank’s long-term journey towards becoming a fully-fledged commercial bank that serves the needs of South Africans while contributing to the strength and stability of the country’s financial system,” he said.

Postbank’s history

Postbank was founded in 1875 as a standalone entity, closely tied to the South African Post Office (SAPO), known as the Savings Bank.

Its first branch opened in Cape Town in 1884, after which it expanded rapidly, opening branches across the country. It used the Post Office’s existing footprint, though it remained a standalone entity.

However, this changed in 1974, when the Post Office took full responsibility for what was then called the ‘Post Office Savings Bank’ and the National Savings Certificates, following the bank’s computerisation.

The idea of it becoming a fully-fledged commercial bank, operated and owned by the state, emerged in the early 2000s, coinciding with the expansion of South Africa’s social grant system.

In 2003, the SAPO launched its ‘Paymaster to the Nation’ project, which allowed social grant recipients to open a Postbank account and receive their grants, a service offered through the Post Office.

The Postbank Amendment Act came into effect in March 2024, allowing the bank to apply for a new banking licence from the Reserve Bank’s Prudential Authority.

This is the licence that will allow Postbank to become a fully-fledged commercial bank and compete against the likes of Capitec, FNB, Absa, and Standard Bank.

“The mission of Postbank is to be the trusted partner of the government in financial inclusion, and it aims to offer inclusive, accessible, simple and secure channels,” it said.

Its mission is to become the bank of choice for the government, business, and individual customers in the underserved communities.