Business

Marcus slams SARB 'profit-seekers'

17 March 2010

Profit-making should never be a motive for holding shares in the South African Reserve Bank (SARB), governor Gill Marcus said on Tuesday.

"The bank is neither designed nor expected to maximise profits," she said in a letter to shareholders, published on the SARB's website.

Marcus said the country's central bank currently faced a challenge "ostensibly lacking in principle and evidently driven by the self-interested profit motive of a very small minority of shareholders".

She reiterated to shareholders that the independence of the Reserve Bank was entrenched in South Africa's Constitution.

The role of private shareholders in the SARB was not to determine the Bank's purpose of conduct, "and they have a limited and indirect role in the governance of the bank".

Marcus said shareholders were governed by the SARB Act and were not authorised to appoint or remove the CEO of the bank.

In the SARB's case, the governor was appointed by the President, she said.

According to Marcus, a single shareholder could not hold more than 10 000 shares in the SARB, preventing individuals from exercising undue influence over the control of the Bank.

Sapa