BANKS are political entities! There is an unspoken yet seemingly invincible alliance between banks and politics that rarely comes to light. This alliance, often invisible yet profound, wields an extraordinary influence over society, impacting everything from economic prosperity to policy direction and, alarmingly, the erosion of individual and press freedoms.
The troubling experiences of Neil Farage, the former UK political leader, and Julius Malema, the Economic Freedom Fighters (EFF) leader, offer striking illustrations of this unsettling reality. Accused of harbouring contentious political views, both Farage and Malema found their bank accounts closed. More shockingly, in Malema’s case, the banks targeted his innocent 17-year-old son, refusing him the right to open a bank account.
Similarly, Independent Media, one of South Africa’s big-four media houses, recently received notice from Standard Bank about the impending closure of its bank accounts – casting a chilling shadow over press freedom.
These closures reveal the hidden tango between banks and politics. Critics might argue that banks would not shut down accounts without valid reasons. Still, in these cases, the individuals and the media house in question committed no wrongdoing, nor do they have formal charges or criminal convictions.
The banks’ justification of “reputational risk” rings hollow, especially when the banking sector continues to provide services to entities mired in accusations of widespread corruption.
The alarming interplay between banks and politics deserves detailed scrutiny. These incidents, occurring in supposedly democratic societies, expose the fragility of personal and corporate financial independence in the face of a mighty banking sector armed with political backing.
Claims of bank independence and autonomy in South Africa are, at best, an illusion. Banks are run by individuals and thus subject to their influences and biases.
A significant event in 2017 highlights the political influence and bias of the banks. High-ranking banking executives publicly supported and attended the Save South Africa (SaveSA) campaign, an initiative by ANC member Sipho Pityana. The line-up included then Absa chief executive Maria Ramos, Stephen Koseff, then chief executive of Investec, and Sim Tshabalala, chief executive of Standard Bank. This event marked a turning point, laying bare the political allegiances of major banks and corporations.
While publicly touted as a noble defence of South Africa’s democracy, SaveSA was arguably a façade for ANC’s internal power battles. It sought former President Zuma’s resignation. The campaign’s narrative against the Guptas and state capture conveniently provided public relations cover.
After Zuma’s resignation in 2018, SaveSA aligned itself with the Thuma Mina initiative, a social mobilisation project launched by President Cyril Ramaphosa – and then faded into oblivion. Pityana, the SaveSA organiser, secured himself a position as a non-executive director at Absa, one of the banks whose executives backed his initiative, marking a swift reward for his efforts.
In another occurrence, high-ranking banking executives such as Koseff, Goldman Sachs’ Collin Coleman, and FirstRand’s Johan Burger attended Ramaphosa’s “CR17 campaign” launch of the “New Deal” in Soweto. Their presence openly revealed their political preferences in the ANC’s internal battles.
The 2019 leak of CR17’s bank statements brought to light the depth of banking executives’ involvement in politics. Significant donations came from leading figures in the banking sector, including Ramos, Coleman, and Absa. These revelations should have raised alarm bells about the banking industry’s impartiality and claimed independence. This chain of events put the banks squarely in the partisan politics of the ruling ANC and South Africa.
Having invested millions into a political campaign to secure their preferred candidate’s victory, it is only natural that these bank executives would guard their investment zealously. The selection of individuals and companies targeted for arbitrary bank account closures display a political bias.
The cases of Malema, Independent Media’s Survé, and Farage in the UK highlight the entangled relationship between banks and politics. For South Africa, the tipping point came in 2017. The closure of Independent Media accounts is a clear attempt to silence dissenting voices that fail to subscribe to the establishment’s narrative. The establishment funded by the banks.
The banking industry’s claims of independence are misleading. The influence between politics and banks runs deeper than we care to admit. The situation reveals the inherent danger of such an alliance and its potential threat to the democratic principles we value, especially the United Nation’s “right to financial inclusion” and the right to economic participation, both of which hinge largely on possessing a functional bank account.