Telkom, the partially state-owned telecommunications company, has initiated legal proceedings against Postbank for failing to comply with an arbitration ruling that mandates a R70 million payment. The dispute stems from a breached settlement agreement concerning an Oracle software deal.
According to a report by City Press, the arbitration process concluded on 29 January 2025, with Judge Frans Fabricius presiding over the case. Despite both parties reaching a settlement, Postbank did not fulfil its financial obligations, prompting Telkom to escalate the matter to the Johannesburg High Court on 4 February.
Brittany Leroni, Telkom’s legal representative, explained that the agreement included pre-conditions finalized in January 2022. As part of the settlement, Postbank had committed to paying the R70 million in three instalments: R25 million on 10 February, another R25 million on 10 March, and the remaining R20 million on 10 April.
This is not the first time Telkom has encountered financial issues with state-owned entities. Before Postbank officially separated from the South African Post Office in September 2023, the postal service had ongoing financial disputes with Telkom over unpaid bills.
In March 2023, Telkom threatened to disconnect services to the Post Office due to outstanding debts amounting to R269 million. The intervention of then-Minister of Communications and Digital Technologies, Khumbudzo Ntshavheni, prevented the disconnection, ensuring that essential services, including social grant payments and vehicle license renewals, could continue.
At the time, a Post Office spokesperson stated that while they had settled their most recent Telkom bills, historical debt remained an issue. Discussions between the two entities were ongoing to reach a resolution.
Postbank’s financial struggles come at a crucial time as it transitions into South Africa’s first state-owned commercial bank. Historically operating under the Post Office, Postbank was limited to savings services, unable to offer credit or transactional accounts.
President Cyril Ramaphosa signed the Postbank Amendment Bill into law in September 2023, officially separating Postbank from the Post Office and transferring its shareholding to the government. This legislative move allowed Postbank to apply for a new banking license from the Reserve Bank’s Prudential Authority.
The primary goal of Postbank is to provide accessible financial services to underserved communities, SMEs, and the public sector. However, financial experts, including former FNB CEO and Bank Zero chairman Michael Jordaan, have raised concerns about the challenges ahead. Jordaan emphasized the complexities of commercial banking, warning that Postbank lacks the necessary expertise among its executives.
“These skills are not readily available—not just in South Africa, but globally,” Jordaan stated. “Technology decisions have a significant impact on a bank’s operational costs, which ultimately determine customer pricing. Poor technology choices can be disastrous and costly to correct.”
Despite these hurdles, Postbank has the potential to carve a niche in the financial sector by focusing on underserved areas rather than competing directly with major banks. If executed correctly, its strategy could bridge the financial gap for millions of South Africans.
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