PRETORIA, The South African Reserve Bank (SARB), stressing that it continues to function in the public interest, has stressed that proposals to change its ownership structure at this time may raise the level of risk and uncertainty for the country in both a financial and economic policy sense.
This heightened exposure to risk is unwarranted given the country's fragile economic situation. The SARB functions in the public interest. Private shareholders have no influence whatsoever on monetary policy, financial stability, or banking regulation, the central bank said in a statement here Wednesday.
The reserve bank said policy-making and execution remained the preserve of the central bank's Governor and Deputy Governor, who are appointed by the President.
It said the rights of the private shareholders are highly circumscribed. A shareholder, and his or her associates, cannot hold more than 10,000 shares out of the total of two million shares in issue.
According to the SARB Act, shareholders receive a fixed annual dividend of 10 cents per share, making the total dividend pay-out each year 200,000 Rand (about16,300 US dollars).
The SARB said nationalisation would be an expensive exercise. Nationalising the SARB would also be expensive as its shares currently trade for much less than the price at which some existing shareholders are willing to sell their shares. The 'buying-out' of existing shareholders will therefore result in paying large sums of money to effect cosmetic changes that will have no bearing on the manner in which the SARB carries out its mandate or executes its policy responsibilities, it said.
Source: NAM NEWS NETWORK