Respected economist Azar Jammine says there is no need to review the structures that monitor the banking sector‚ following a decision by the bank to cut ties with the influential Gupta family.
Speaking to the ENCA on Friday‚ Jammine said government was using its power to interfere in spaces that were properly regulated.
This week‚ asset manager Futuregrowth pulled the plug on R1.8-billion of loans to state-owned companies and was later followed by Denmark’s Jyske Bank.
The move was driven by tension between the National Treasury‚ Hawks‚ the executive and state-owned companies such as Eskom.
On Friday‚ BDLive reported that the Cabinet has resolved to ask President Jacob Zuma to establish a judicial inquiry into the banks and their actions against the Guptas‚ as well as to review the legislation that governs the banking system‚ in a statement by Mineral Resources Minister Mosebenzi Zwane .
The announcement comes as investor confidence in SA is in a free-fall‚ as a slew of decisions emerging from the Zuma administration creates growing uncertainty in the rules regulating the economy.
Zwane issued the statement on Thursday evening‚ following a marathon Cabinet meeting held on Wednesday.
Zwane‚ who headed an inter-ministerial committee established by the Cabinet after the big four banks withdrew banking services to the Gupta family‚ drew up the Cabinet memo on the banks‚ which he says in his statement has now been adopted by the Cabinet.
It proposes that a judicial commission of inquiry will consider‚ among other things‚ the current mandates of the Banking Tribunal and the Banking Ombudsman as they had failed to protect the rights of the Guptas.
“Many would argue that there is no need for that because the Reserve Bank already has significant oversight over the banking sector. [National] Treasury also has a role in managing the governance of the financial sector more generally‚” said Jammine.
Jammine added that the move for the judicial inquiry was government using its power for the wrong reasons.
“Many will argue that it is an attempt by certain connected individuals to try and even circumvent the judicial system as a means of getting their own ends to be able to do the deals that they want that will enable them to benefit financially‚” Jammine.