The 5 people stopping banks in South Africa from collapsing

South Africa’s banking system is internationally recognised, with the Prudential Authority (PA) and its five leaders acting as regulators.

The PA regulates banks, insurers, cooperative financial institutions, financial conglomerates and other specific market infrastructures.

Speaking at a media engagement, PA CEO and South African Reserve Bank Deputy Governor Fundi Tshazibana said that the authority works with banks “from birth to death”.

Established in April 2018 as part of the South African Reserve Bank (SARB), the authority issues licences to banks at the start of their life. It recently gave Old Mutual a licence to conduct a bank’s business.

After a change in regulations in June 2023, the PA now sends a bank to a resolution board housed within the SARB when it is in danger or about to die. Before the change, it used to simply manage the resolution of banks in distress.

Tshazibana stated that the PA often looks at the credit risks faced by banks.

As regulators, the PA’s interests are different from those of shareholders who primarily focus on profits.

The PA primarily focuses on capital and risk exposure. This is important because if a bank starts making a loss, how it handles its depositors’ money could become dangerous.

The PA also ensures that banks are efficiently managing risks with third parties, especially with digital modernisation, as many banks will need to use third parties to manage their data.

An example of the risk with third parties was seen a couple of weeks ago when a global IT outage caused by a Crowdstrike update hit several international financial institutions, including Capitec.

The PA also regularly engages with the management and boards of South Africa’s biggest banks to ensure that they are operating effectively and are diverse enough to ensure optimal performance.

The regulator will also greenlight the appointment of executives at South Africa’s major banks. The PA greenlit the appointment of Jason Quinn as Nedbank’s new CEO earlier this year.

The PA also contributed to the nation’s plan to get off the Financial Action Task Force’s (FATF) greylist.

South Africa was added to the greylist over shortcomings in tackling money laundering and the

It received one of the 22 action areas that must be addressed before the country exits the greylist. It was also told that its fines weren’t strong enough for the severity of the offences seen.

As seen with the nation’s efforts to get off the greylist, the PA also works closely with the Hawks, Financial Services Conduct Authority (FSCA), the National Credit Regulator, and other parts of the SARB to govern the nation’s banking system.

The Prudential Committee has general oversight over the PA’s management and administration. It is made up of Tshazibana, her fellow SARB Deputy Governors Mampho Modise and Rashad Cassim, and Governor Lesetja Kganyago.

However, the PA Management Committee, with five senior figures, led by Tshazibana as CEO, run the day-to-day operations and ensure that South Africa’s banking sector is stable.

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Fundi Tshazibana – Chief Executive Officer

As CEO of the PA, Tshazibana leads the SARB’s Prudential Cluster, which includes its Financial Surveillance Department and other departments.

She previously oversaw the Financial Markets and International Cluster before the rotation of deputy governors in April 2022.

She joined the SARB in 2018 as Adviser to the Governor and was appointed Deputy Governor a year later by President Cyril Ramaphosa.

She is also an economist with extensive experience in public policy formation and analysis, having previously worked at the International Monetary Fund (IMF), the National Treasury and the National Energy Regulator of South Africa (NERSA).

She was an alternate executive director on the IMF’s Executive Board, which runs the day-to-day operations.

She has a Bachelor of Economics (Honours) degree and a Master of Commerce degree in Economics from the University of KwaZulu-Natal.

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Denzel Bostander – Head of the Department for Financial Conglomerate Supervision

Botstander’s Department supervises both the largest and systemically significant banks and insurers in South Africa.

He is also in charge of the PA’s anti-money laundering and countering of terrorism financing response.

Prior to this position, he was a Deputy Registrar of Banks and played a key role in establishing the PA through a merger of banking and insurance supervisory bodies.

He is also a member of SARB’s Financial Stability Committee and has played a key role in resolving failing financial institutions.

He holds a Bachelor of Accounting Science degree and a Master of Business Leadership degree from the University of South Africa. He also completed Harvard Business School’s Advanced Management Program. He previously worked at PwC.

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Olaotse Matshane – Head of the Department for Policy, Statistics and Industry Support

Matshane’s department oversees policy formulation and the implementation of regulatory and supervisory frameworks.

The department also provides operational support, industry analysis, and technical support for capital and accounting requirements.

It also provides support on legal and enforcement issues.

She joined the National Treasury in 1998 and worked in multiple roles before joining the Co-operative Banks Development Agency (CBDA) as co-managing director.

She became the Chief Director of the Financial Sector Policy Division of the National Treasury in 2018 and assumed her current role in 2021.

She holds an MSc in Economics from the University of Essex and a BCom Honours Degree from Rhodes University.

She has also completed courses in Public Finance, Taxation, Microfinance, and Project Management, as well as a Post Graduate Diploma in Banking with Milpark Education (cum laude) in 2017.

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Kerwin Martin – Head of Department for Banking and Insurance Supervision

Martin’s department is responsible for the prudential supervision of small- to medium-sized banks, insurance companies, cooperative financial institutions, securities and derivative MIs.

He started his regulatory career in the Insurance Prudential Department at the Financial Services Board in 2001.

As part of the establishment of the Twin Peak regulatory model (establishment of PA and FSCA), Martin moved to the PA in 2018.

“Kerwin has served as a member of the Governance Working Group of the International Association of Insurance Supervisors (IAIS) since 2014 and participated in the formulation of Insurance Core Principles on Corporate Governance as well as governance issue papers and application papers,” said the SARB.

“He currently leads the exploratory work on remuneration and compensation for the IAIS Governance Working Group.”

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Faizel Jeena – Head of Department for Risk Support

The Risk Support Department provides regulatory and supervisory support.

It also provides technical expertise on all prudential risk types for banks, insurers and market infrastructures.

Additionally, it provides quantitative and actuarial analysis, as well as financial institution statistics to the PA.

Jeena has 25 years of experience in banking and finance. He has exposure to supervision, regulation, data management, investment banking, commercial and retail asset finance,

He is also a registered chartered accountant.