Mutual banks do not offer the full suite of banking products that commercial banks such as Standard Bank and Absa do.
Backed by former FNB CEO Michael Jordaan, Bank Zero looks set to become SA’s newest mutual bank and will be 45% black owned.
Co-founded by Jordaan and former FNB executive, Yatin Narsai, Bank Zero had been granted a provisional licence after a “rigorous evaluation” by the Reserve Bank, the bank said in a statement on its website on Tuesday.
Mutual banks are subject to the Mutual Banks Act and do not offer a full suite of banking products, as with commercial banks such as Standard Bank and Absa.
“The mutual banking concept mirrors current social media trends and benefits customers by allowing for the support and creation of financial communities,” Bank Zero said. “It also provides for a capital efficient framework, and Bank Zero will be sharing the subsequent cost benefits with its customers.”
Bank Zero is planning to launch in the fourth quarter of 2018, making use of a mutual bank licence and serving both individuals and businesses. It had a team with “extensive experience and knowledge of banking through their previous specialist roles in financial services”.
The bank will be app-driven, and if it is granted a licence, it will become SA’s fourth mutual bank, alongside Finbond, GBS and VBS, according to the Reserve Bank’s website.
If Bank Zero manages to launch in 2018, it will join Discovery Bank, TYME and Post Bank as SA’s first new banks in more than a decade. “Bank Zero is the newest citizen in SA’s banking world, pivotal to the new banking revolution,” it said on its website.
Originally published by Business Day