Cape Town - As the regulator of banks charged with issuing, suspending and revoking bank licences, the South African Reserve Bank (Sarb) and Prudential Authority (PA) have a legal interest in how the institutions conduct themselves with their customers.
This is according to the Sekunjalo Group, its chairman Dr Iqbal Survé, and among 100 other respondents, who yesterday presented its case over why the Sarb and PA should be part of the legal process involving the group’s challenge of alleged discrimination by banks.
The matter before the high court yesterday ran parallel to an interlocutory application heard on Monday in the Equality Court, also sitting in the high court, in which the Sarb and PA sought interim relief for the dismissal of a complaint brought against them by Sekunjalo relating to allegations of discrimination.
In the Western Cape High Court on Tuesday, legal counsel for Sekunjalo noted that the Sarb and PA’s basis for its complaint of misjoinder, or to be removed from the matter, was that they claimed that “no relief is being sought against them”, and that the orders “do not apply to or affect the rights or obligations of the Sarb and the PA”.
Advocate Vuyani Ngalwana SC said the Sarb and PA were the “police” of banking compliance, and while the Sekunjalo Group did not seek remedial relief against it, Ngalwana argued that it should have an interest in the matter.
This, as the Reserve Bank and PA are organs of state and have an obligation under section 165(4) of the Constitution to assist the court in the matter, he argued.
“The Sarb has a direct and substantial interest, because it has a statutory obligation to monitor compliance with the prescripts that are the subject of the constitutional challenge,” said Ngalwana.
In its main case, Sekunjalo has set out to challenge the banks’ decision to de-bank the entire group, arguing, among other things, that it is irrational, unlawful and unconstitutional.
This follows efforts by the banks, including Standard Bank, Absa Bank, FNB and Nedbank, to close the bank accounts of the Sekunjalo Group and related companies, citing reputational risk, affecting about 8 500 employees.
Ngalwana said an organ of state wouldn’t be called on “willy-nilly” to assist the court.
“Where the information sought is not in the public domain, only that specific organ of state can be of assistance in order to render the effectiveness of the court.”