Stability in South African Banking Sector: Prudential Authority’s Key Role
The Prudential Authority (PA), responsible for regulating banks and other financial institutions in South Africa, is working closely with stakeholders to ensure the country’s banking sector remains stable. In a recent media engagement, PA CEO Fundi Tshazibana highlighted the authority’s focus on “birth to death” supervision of banks, from issuing licenses to overseeing their operations until they are resolved or wind down.
Key Departments within Prudential Authority
The PA has five departments, each led by a senior official:
- Department for Financial Conglomerate Supervision: Led by Denzel Bostander
- Department for Policy, Statistics and Industry Support: Led by Olaotse Matshane
- Department for Banking and Insurance Supervision: Led by Kerwin Martin
- Department for Risk Support: Led by Faizel Jeena
PA’s Primary Focus: Ensuring Bank Stability
The PA’s primary focus is on ensuring that banks have sufficient capital and manage their risks effectively. This includes reviewing:
- Credit risk
- Liquidity risk
- Market risk
Additionally, the authority ensures that banks are managing their relationships with third-party providers, particularly in the digital age where many banks rely on external service providers to manage data.
Strengthening Anti-Money Laundering and Combating the Financing of Terrorism Framework
In recent years, the PA has taken steps to strengthen South Africa’s AML/CFT framework. In 2023, the country was removed from the Financial Action Task Force (FATF) grey list after addressing several action items, including enhancing its fines for money laundering offenses.
Collaboration with Other Regulatory Bodies
The PA works closely with other regulatory bodies in South Africa, including:
- Financial Services Conduct Authority (FSCA)
- National Credit Regulator
- Hawks
Leadership Team at Prudential Authority
The leadership team at the PA includes Fundi Tshazibana as CEO, who has a background in economics and public policy analysis. She previously worked at the International Monetary Fund (IMF) and the National Treasury before joining the South African Reserve Bank (SARB).
Other key officials at the PA include:
- Denzel Bostander, Head of Department for Financial Conglomerate Supervision
- Olaotse Matshane, Head of Department for Policy, Statistics and Industry Support
- Kerwin Martin, Head of Department for Banking and Insurance Supervision
- Faizel Jeena, Head of Department for Risk Support
Initiatives to Strengthen Financial System Resilience
In an interview with The Citizen, Tshabang said that the authority has a number of initiatives aimed at strengthening the resilience of the financial system, including introducing new regulations on banks’ liquidity management. “This will ensure that banks have sufficient liquidity to meet their short-term obligations,” she explained.
Commitment to Effective Regulatory Framework
The PA is also working closely with the Financial Services Board (FSB) and other regulatory bodies in the country to ensure that South Africa’s AML/CFT framework remains effective. The authority has implemented a number of measures aimed at strengthening compliance with these regulations, including increasing fines for non-compliance and enhancing monitoring and enforcement.
Tshabang emphasized that the PA is committed to working closely with banks and other stakeholders to strengthen the resilience of the financial system in South Africa. “We are committed to ensuring that our regulatory framework remains effective and up-to-date,” she said.