COFI Bill: South Africa’s Push to Reform a Biased Financial System

South Africa is on the verge of a major shake-up in its financial services sector. The Conduct of Financial Institutions (COFI) Bill—currently awaiting Parliamentary review—promises to bring long-overdue change to a system often criticised for its deep-rooted inequality and lack of transparency.

For too long, the financial landscape has reinforced racial and economic divides, sidelining black South Africans from meaningful participation in banking, lending, and investment. Now, there’s a cautious sense of optimism that COFI could be the beginning of a more inclusive chapter.

More Than Just a Policy on Paper

COFI isn’t South Africa’s first attempt at reform, but it might be the most promising. By aligning more closely with transformation laws like the Broad-Based Black Economic Empowerment (BB-BEE) Act and the Financial Sector Code, the Bill aims to turn ideals into action.

Importantly, the legislation would enhance the powers of the Financial Sector Conduct Authority (FSCA), allowing it to overturn discriminatory decisions and seek legal recourse. That’s a big step towards fairness, especially in a country where financial decisions have historically favoured a privileged few.

Discrimination Still Runs Deep

Even in today’s democratic South Africa, financial access is not equal. Black South Africans are still less likely to be approved for home loans, business funding, or investment opportunities. The legacy of apartheid, combined with the absence of intergenerational wealth, keeps many locked out of financial mobility.

Disparities in interest rates, credit approvals, and access to capital continue to define the system. In many cases, race still determines who gets support—and who gets left behind.

The Dangerous Trend of ‘De-Banking’

One of the more troubling practices COFI could address is “de-banking”—where banks shut down accounts without transparency or accountability. This has disproportionately affected politically outspoken figures and black-owned businesses, often under the vague label of “reputational risk.”

High-profile cases like the Sekunjalo Group contrast sharply with how white-owned firms implicated in corporate scandals, like Steinhoff, are handled. Critics argue that banks are not just financial intermediaries—they’re becoming political gatekeepers.

As advocate Dali Mpofu SC put it, “If banks can close your account without evidence, based on perception, then they are not just financial intermediaries—they are political actors.”

In the UK, banks are now required to provide three months’ notice and a written explanation before closing an account. South Africans deserve the same level of transparency and accountability.

The Real Test: Implementation

While the COFI Bill sounds promising on paper, its success depends entirely on enforcement. Previous laws failed because regulators lacked the authority or will to act decisively. This time, the FSCA must have real teeth, and civil society must play a key role in holding institutions accountable.

Watchdog organisations and financial activists will need to monitor how banks behave, and whether the promises of inclusion and fairness are being upheld.

A Chance to Rewrite the Rules

At its heart, COFI offers a rare opportunity to reset the rules of engagement in South Africa’s financial sector. But it must move beyond box-ticking compliance. Real transformation means empowering the people who have been excluded for generations—and it means calling out injustice wherever it appears.

If implemented effectively, COFI could serve as more than a policy—it could be a catalyst for justice, trust, and shared prosperity in a deeply unequal country.

{Source: IOL}

Follow Joburg ETC on Facebook, Twitter , TikTok and Instagram

For more News in Johannesburg, visit joburgetc.com