Postbank board was axed over unlawful contracts

Communications minister Mondli Gungubele. Image: GCIS

Postbank’s board of directors has been axed after a forensic investigation found that Postbank maintained contracts with suppliers unlawfully. This comes days after the nationwide system failure which affected payments to 600 000 grant beneficiaries last week.

Communications minister Mondli Gungubele on Thursday held a media briefing to update the public on the social grants payment debacle. He was joined by social development minister Lindiwe Zulu, who apologised to grant beneficiaries.

“Postbank is very important. They must communicate to us every time there is a problem because we must always have a plan B so that people do not suffer the way they have suffered, going back and forth,” said Zulu.

Meanwhile, in a statement on Thursday morning, Gungubele said that an administrator has been appointed, pending the appointment of a new board, Gungubele said.

Three of the board members, including the chairman, resigned on Tuesday. They claimed in a letter that the minister had been “hostile and oppressive” towards them.

Gungubele rejected this accusation. He said that governance issues at Postbank had been standing in the way of government’s goal to build a functional state bank that would benefit poor people.

On Thursday, GroundUp reported that Postbank’s payment system has been riddled with issues. This included a court case related to a contract for the payment switch technology which enables the company to pay social grants through the Postbank/Sassa cards.

In August, Postbank had migrated to a new payment system which disrupted payments to 600 000 social grant recipients since Monday.

Postbank transition

During Thursday’s media briefing, Postbank CEO Ntomboxolo Mbengashe said that the vast majority of the 600 000 affected beneficiaries have received their grant money. “Things like this do happen,” Mbengashe said. “I cannot stand here, with an understanding of technology, and say that 100% something like this will never happen again.”

Sassa grants mess – Gungubele says ‘sorry’

She said that although relevant tests had been conducted on the new system prior to launching, the transition still “didn’t happen as planned”. The failed transactions were manually reversed, she said. Mbengashe apologised for the inconvenience and said that she was raised by a grant beneficiary. “I know how it feels not to get your money in time,” she said.  — Daniel Steyn, Qaqamba Falithenjwa and Ella Morrison, GroundUp

Get the latest tech news in your inbox at 5am daily