18 August 2017
The ruling by the High Court in Pretoria that the Minister of Finance is not legally obliged to interfere in a decision by banks to close the accounts of the Oakbay Group provides clarity on the nature of private bank-client relationships. The Banking Association South Africa was not cited in the original application by the then Minister of Finance because this is a client-bank matter. Our response now will thus be of a generic nature and not related to the particular company.
It is especially important to note the decision of the court to pronounce this as an “undisputed legal question” in handing down its judgement. Critically, the judgement removes the apparent misconception that any member of the national executive (including the Minister of Finance) are obliged to intervene in commercial disputes.
The Banking Association South Africa remains concerned regarding the apparent motives of the Minister of Labour and Minister of Mineral Resources to establish an alleged (and, according to the judgement “contrary to law”) inter-ministerial committee to interfere in this matter. Both ministers should be held to account in providing reasonable explanations of their apparent actions.
The judgement, in our view, confirms the sanctity of client-bank relationships and confirms there should be no interference in that, political or otherwise. We are also of the view we have a proactive and efficient bank regulator and a Financial Intelligence Centre Office that is diligent in overseeing efforts to combat financial crime. These bodies, together with appropriate legislation and regulations, are very capable in overseeing the conduct of banks in relation to their clients, without interference.