SA’s constitution is one we must keep returning to. It is clear: every person has the right to social security (section 27), adequate housing (section 26), and education, and support for youth (sections 28 and 29).
These rights must be delivered in a way that is equal (section 9), transparent and accountable (section 195). To make this promise real, SA needs a payments system that reaches everyone reliably, affordably, and with integrity.
Today, much of that infrastructure is controlled by private banks whose business models are optimised for profit, not inclusion. That’s where a state bank comes in – not to compete, but to complete the system.
Despite progress, millions remain excluded from meaningful participation in our financial system. Around 37.4-million adults have access to banking, but 7.3-million remain unbanked. The latter are mostly rural, low-income, or informal workers.
Even among the banked, nearly 19-million are underbanked: they may hold an account, but cannot access affordable, useful, or empowering financial services.
Every conversation with citizens highlights the same barriers: high transaction fees that eat into already small incomes; sparse branches and ATMs that force long, costly travel; unresponsive customer service; and digital systems that fail to accommodate differences in education or language. These are not minor irritants, they are structural exclusions that perpetuate inequality and strip customers of dignity.
Sassa’s recent decision to terminate its Master Services Agreement (MSA) with the Postbank underscores the risk of disrupting inclusion. Three-million vulnerable South Africans rely on Postbank for their grants, often their only source of income.
While payments will continue, requiring beneficiaries to pay banking fees – which they did not pay for under the MSA – the cancellation imposes real economic costs: travel to distant branches, time off work, and access to internet or devices for notifications.
These administrative burdens hit the most vulnerable hardest, deepening exclusion. A functioning state bank ensures that access is universal, predictable, and fair. A state bank is not a duplication of existing systems; it is the backbone of public financial infrastructure, just as Eskom powers electricity and Transnet moves goods.
Around the world, state-owned banks demonstrate what is possible: Germany’s KfW provided tens of billions in Covid-19 relief almost overnight; Chile’s Banco Estado serves over 80% of adults, including those in rural communities, with low-cost accounts; India Post Payments Bank opened tens of millions of accounts and disbursed billions in benefits with minimal leakage.
These examples show how public banking can reach populations that private banks leave behind. Again, underscoring efficiently, reliably, and inclusively.
Postbank’s recent transformation is a powerful story of resilience and readiness. Emerging from a three-year auditor disclaimer, it has delivered a unqualified audit, returned to solvency, restored governance, and reduced fraud by 80% year-on-year. Last year, the Post Bank delivered R760m to the fiscus as dividends.
Since the September 2023 system glitch, it has delivered every single monthly payment on time. For the first time in years, it has issued compliant EMV and PCI-DSS cards. Postbank is stable, trustworthy, and capable of extending financial inclusion across SA, especially to historically underserved communities.
A government-owned Postbank could transform how we deliver social and developmental programmes. The national student financial aid scheme (NSFAS) allowances could be faster, predictable, and affordable, even in remote colleges.
The First Home Finance Subsidy Programme Flisp) housing subsidies could be tied to verified construction milestones, reducing delays and creating auditable trails. The expanded public works programme (EPWP) wages could be paid rapidly and cheaply, bringing workers into formal financial inclusion with portable accounts for long-term financial health.
Much scepticism about state banks is based on myths. Private banks meet everyone’s needs? No, they serve only where profits exist. State banks are inefficient. Postbank’s turnaround shows the opposite. State banks duplicate infrastructure. They unify fragmented systems, reducing complexity and creating a single, inclusive rail for service delivery.
Postbank should receive a full banking licence and transition NSFAS, Flisp, and EPWP payments onto its platform through phased rural pilots. Service-level agreements should be published quarterly, tracking performance, fraud response, and reconciliation. Affordable, beneficiary-linked accounts should roll out across programmes, turning one-off payments into lasting financial inclusion.
We are at a pivotal moment where institutional readiness meets national need.
SA deserves a state bank rooted in public interest – one that delivers on our constitutional and developmental promises. Postbank is ready. Let us complete the architecture, reclaim our financial sovereignty, and extend inclusion to all South Africans – with dignity, speed, and accountability.
- Diko is a member of the ANC NEC and chairperson of portfolio committee on communications and digital technologies
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