Public Protector's call to change the Constitution is unlawful: SARB

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The requirements for a constitutional change that would shift the Reserve Bank's mandate from protecting the value of the rand in favour of the socio-economic wellbeing of citizens was unlikely‚ Nomura's emerging-markets investment economist Peter Attard Montalto said.

Mkhwebane's suggestions were part of recommendations following an investigation into a Reserve Bank bailout for Bankorp, a unit of Barclays Africa, nearly three decades ago.

Meanwhile, media reports on Monday stated that advocate Paul Hoffman, who lodged the original complaint against Absa and the SARB with Mkhwebane, said the Public Protector was not authorised by the Constitution to order a democratically elected government to amend the Constitution.

In a statement on Tuesday, the bank said that it has consulted with its legal team and has been advised that the action prescribed by the Public Protector falls outside her powers and is unlawful.

The amount of 1.125 billion rand represents the interest accrued from the central bank's loans, Mkhwebane said.

As part of her ruling, in an apparent bid to "prevent the same thing from happening again", Mkhwebane recommended that Parliament move to change the Reserve Bank's mandate as written in the Constitution.

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The proposal comes at a "sensitive time and is highly risky", Peter Attard Montalto, an economist at Nomura International, said by email. The Ciex report alleged that R24 billion was unlawfully given out to Bankorp from 1985 to 1992 by the Reserve Bank (as a "lifeboat"/gift).

The Democratic Alliance (DA) has requested that Public Protector, Busisiwe Mkhwebane, release various reports pertaining to longstanding Gupta investigations following an 8-month dry spell on the subject matter.

Absa denied any wrongdoing.

She found that by sending the money to Bankorp, the SARB failed to comply with the SA Reserve Bank Act, among other findings.

"Once we have read it we will consider our legal options including seeking a High Court review".

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