SARB felt hot after Gupta's accounts closed



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Governor of the Reserve Bank of South Africa (SARB), Lesetja Kganyago, detailed the extent of the pressure that was brought to the central bank after the country's banks closed the bank accounts of the Guptas three years ago. Stock Photo: IOL
Johannesburg – Governor of the Reserve Bank of South Africa (SARB), Lesetja Kganyago, detailed the extent of the pressure that was brought to the central bank after the country's banks closed the Guptas bank accounts three years ago.

Kganyago told global leaders at the Stavros Niarchos Foundation conference that the attacks were for reasons other than price stability.

He said the bank was pressured to force banks to reconsider the closures as it made it almost impossible for the family to run its operations.

"We began to feel pressure to force the banks to take care of these accounts, violating the law. In addition, we were under pressure to allow this family to obtain a bank license by buying a small bank. We even face the threat of bank licensing being taken out of SARB altogether, "Kganyago said.

"We were using our independence to keep a law against dirty money flows, and that made us enemies."

Moody's Investor Services said yesterday that it continues to see SARB's independence in conducting its policy, despite negotiations within the ANC to nationalize the bank.

The guarantee of SARB independence is Article 224 of the constitution, which explicitly protects the bank from government interference.

In August 2016, the Financial Intelligence Center signaled 72 suspicious transactions linked to Gupta's bank accounts with a total value of R $ 6.8 billion.

The infamous Guptas, who were accused of having unrestricted access to state resources under former President Jacob Zuma's government, had their bank accounts closed by Standard Bank, Nedbank, FNB and Absa in 2016.

Standard Bank compliance chief Ian Sinton in September told the inquiry into state capture that former Mineral Resources Minister Mosebenzi Zwane and Labor Minister Mildred Oliphant pressured Standard Bank to keep the Guptas accounts open .

FNB and Absa refused to meet with government officials on the matter, while Nedbank testified that Zwane threatened to withdraw the company's banking license if it refused to reverse its decision.

Kganyago also criticized the central bank after putting VBS Mutual Bank under trusteeship last year after bank fraud of roughly $ 2 billion was exposed.

"We have been accused of undermining black excellence and protecting the interests of white capitalists. Do you know the saying that "patriotism is the last refuge of the scoundrels"? Well, in South Africa, if you really need a place to hide, it is not in patriotism but in racial politics. "

S & P Global Ratings said last week that it had no qualms about ANC's plans to nationalize SARB.

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