Public Banking

Public Banking Concepts

Entity	Type	Description	Key Features
Public Banking Institute	Advocacy nonprofit	Promotes public banks in US	Research, legislation support, education on public banking models
Ellen Brown	Author/advocate	Leading public banking proponent	Wrote "Web of Debt," chairs Public Banking Institute
Bank of North Dakota	State-owned bank	Only US state-owned bank (1919)	Profits return to state, supports local banks, student loans, infrastructure

Aspect	Details	Results
Structure	State deposits held, partners with local banks	No Wall Street speculation
Services	Infrastructure loans, student loans, agricultural credit	Lower rates than commercial banks
Performance	Profitable every year since inception	Returns $300M+ to state budget over decade
Crisis resilience	Weathered 2008 crisis well	Fewer foreclosures, bank failures than other states

Institution	Type	Market Share/Size	Public Banking Potential
PostBank/Postbank	SOE bank	6M grant recipients	Already handles social grants; expand to full banking
Land Bank	Development finance	R49B loan book	Agricultural focus; could expand rural banking
DBSA	Development bank	R95B assets	Infrastructure expertise; could do municipal banking
Ithala Bank	Provincial bank (KZN)	Limited ~R5B assets	Model for provincial public banks
Industrial Development Corporation	Development finance	R145B assets	Industrial lending expertise

Bank Type	Market Share	Assets	Public Banking Gap
Big 5 Commercial	90% of assets	R6.5 trillion combined	Profit extraction, limited township/rural presence
Capitec	15% retail	R200B+	Serves lower income but still profit-driven
Cooperative banks	<1%	~R2B total	Undercapitalized, limited reach
State/development banks	~5% of total lending	~R300B combined	Not retail focused

Phase	Action	Timeline	Expected Impact
Phase 1: Foundation	Convert PostBank to full state bank	Year 1-2	Basic accounts for 15M unbanked
	Capitalize with SARB reserves/pension funds		R50B initial capital
Phase 2: Expansion	Provincial banks in 3 major provinces	Year 2-3	Local government banking, SME loans
	Partner with spaza shops/cooperatives		Township financial access
Phase 3: Integration	Link to national payment system	Year 3-4	Reduced transaction costs
	Municipal banking services		Infrastructure finance at lower rates
Phase 4: Full Service	Mortgage/business lending	Year 4-5	Competition to commercial banks
	Green energy financing		Just transition support

Area	Current Problem	Public Banking Solution
Financial inclusion	11M adults unbanked	No-fee basic accounts
Municipal finance	High commercial bank rates	Direct infrastructure lending
SME funding	90% rejected by banks	Development-focused lending
Currency stability	R450B+ profits leave SA yearly	Profits reinvested locally
Rural development	No bank branches	Mobile/postal banking network
BEE/transformation	Limited black bank ownership	State ownership = public ownership

Factor	Requirement	SA Status
Political will	Government commitment	Mixed; some support but bank lobby strong
Regulatory framework	SARB cooperation needed	SARB independence could be obstacle
Initial capital	R50-100B needed	Available from pension funds, reserves
Technology	Digital infrastructure	Good mobile penetration (95%+)
Anti-corruption measures	Strong governance	Critical given SOE track record