Belinda Beresford
Guardian of the rand and watchdog of inflation, the Reserve Bank probably has as much impact on every South African’s finances as anything the government does. But, unlike Nelson Mandela, the bank is not national property. Unlike most of its counterparts across the globe, South Africa’s central bank is a private company which is listed on the stock exchange.
Although not quite as safe as the Bank of England, shares in the Reserve Bank rank as some of the most exclusive and secure in the country. The central bank has been privately owned since it was established in 1921 and presently has around 700 shareholders.
Officials were unable to say why the Reserve Bank is in this unusual position. The Bank of England was initially privately owned, but was nationalised earlier this century.
Although the South African government does not have a stake in the bank, anyone can own Reserve Bank shares. A Reserve Bank representative said the company has 160 shareholders in countries as far apart as Australia and Zambia. Many are individuals.
Ownership of the shares — which were trading at 100c each at the beginning of this week — is restricted by law with no shareholder allowed to hold more than 10 000 of the two million shares. Dividends are restricted to 10% of paid up capital, and any extra profits after allowing for provisions and transfers to reserves are paid to the government. A stake of 200 shares permits one vote at the Reserve Bank’s annual general meeting.
Although returns on the Reserve Bank shares are rather low in comparison with some of the small, zippy companies on the Johannesburg Stock Exchange, shareholders have the satisfaction of owning a piece of the most important company in the country. The Reserve Bank’s duties include maintaining stores of foreign currency, monitoring the country’s banking system and controlling the bank rate. A stake in the Reserve Bank also gives an interest in the South African Banknote Company and the South African Mint.