Experts slam ANCYL’s ‘unwise’ plan to move its bank accounts to ‘dying’ Postbank

The ANC Youth League’s (ANCYL) plan to move its bank accounts from commercial banks to the dying Postbank has been criticised for being unwise and making no financial sense.

Research director at Mapungubwe Institute Strategic Reflection, Prof Susan Booysen, said the league’s move would have wide ramifications, not just for the banking sector but for the country in general. She noted that Postbank had a bad reputation and the recent chaos with social grants was a good example.

ANCYL decisions ‘influenced’ by conference

But Prof Dirk Kotzé, political scientist at the Unisa’s department of political sciences, said the ANCYL’s decision was influenced by the ANC’s national elective conference resolutions to establish a state bank.

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He said the league’s position emanated from its leftist viewpoint that the state must be responsible for as many public service institutions as possible.

This made it seek to support state rather than private institutions, although this was not a consistent position as some of the youth attended private schools and private hospitals.

The ANCYL president, CollenMalatji, announced its intention to move the league’s bank accounts from FNB to Postbank as a way to build confidence in state entities. The decision will also affect all structures of the league.

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But this raised fears that – as a structure of the ruling party – the league’s position may cause panic among investors and commercial banks. Malatji said they would lobby the youth to move their accounts from commercial banks because they did not benefit the black population but only whites and the black elite.

‘Big political statement’

But Booysen described this as a “big political statement that could have serious financial implications.

“The Postbank is really an unproved entity, the experience with it around the grants payments has exposed chaos and drivel there,” she said.

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“Even if they have a problem with commercial banks, it does not make financial sense to transfer money to Postbank. Yes, it’s politically correct to switch your funds by ANC and ANCYL standards, but there is no guarantee the youth are going to benefit at all.”

– ericn@citizen.co.za