Tolashe assures MPs that terminating master service agreement with Postbank won't impact grant payments

CAPE TOWN - Social Development Minister Sisisi Tolashe has moved to assure Parliament that terminating its master service agreement with the Postbank won’t impact the payment of grants.

The master service agreement with the Postbank entered into in 2018 will conclude at the end of September.

Tolashe on Wednesday told Parliament’s social development committee that the termination was amicable and that the decision was prompted by the many challenges.

The South African Social Security Agency (SASSA) said once it terminated its service agreement with the Postbank, it would not enter into another arrangement with any other institution.

The Postbank has already stopped providing SASSA with over-the-counter and cash services.

Minister Tolashe reminded the committee that it was not by choice that SASSA entered into the arrangement with the Postbank and that this was necessitated following legal action related to its former contract with Cash Paymaster Services.

"The termination of the master service agreement is a contractual matter to terminate an agreement that no longer serves the purpose for which it was intended."

SASSA said that while beneficiaries were free to move to another bank if they so wished, the three million clients who received their grants through the Postbank would not be affected by the termination of the service agreement.

"Beneficiaries will continue to receive their grants in their Postbank accounts, just like they have before."

But not all MPs were convinced there won’t be hiccups on 1 October, saying they wanted the reserve bank to clarify the Postbank's licensing status.

The reserve bank was not present at Wednesday’s meeting over confusion about their invitation to appear in person before the committee.